Supreme Court Allows Prosecution Under Customs Act for Antiquities Export: Department of Customs vs. Sharad Gandhi (27 February 2019)

Date of the Judgment: 27 February 2019
Citation: (2019) INSC 174
Judges: K.M. Joseph, J., Ashok Bhushan, J.

Can a person be prosecuted under the Customs Act, 1962 for illegally exporting antiquities, or is the prosecution limited to the Antiquities and Art Treasures Act, 1972? The Supreme Court of India recently addressed this question in a case concerning the export of a sandstone Buddha head. The core issue was whether the Customs Act could be invoked for offenses related to the illegal export of antiquities, or if the Antiquities Act provided the exclusive legal framework for such cases. The Supreme Court, in a judgment authored by Justice K.M. Joseph, overturned the High Court’s decision, allowing prosecution under the Customs Act.

Case Background

The case originated from the interception of a wooden box on 18th February 1995, which was declared to contain “Stone Figure Handicrafts” in the courier manifest. Suspecting the contents to be an antiquity, officials from the Archaeological Survey of India (ASI) were called in. They identified the item as a sandstone head of Buddha, which is considered an antiquity. The respondent, Sharad Gandhi, was identified as the commission agent who booked the parcel.

During the investigation, Sharad Gandhi stated that he acted as a commission agent and had prepared the declaration based on information from his client, Mr. Robert Jaeger. However, he failed to provide any identification details or evidence to prove that Mr. Jaeger had handed over the antiquity to him. Further, he did not obtain any written authorization from Mr. Jaeger to export the parcel.

The investigation revealed that Sharad Gandhi had prepared a false proforma invoice and signed the declaration, knowing that the item was an antiquity. He also issued a false certificate stating that the sandstone head of Buddha was new and not an antiquity.

Timeline:

Course of Proceedings

The Additional Chief Metropolitan Magistrate initially allowed the discharge application filed by Sharad Gandhi. The Magistrate accepted the argument that prosecution under the Customs Act was barred, and that the Collector of Customs only had the power to confiscate the goods and impose a penalty under the Antiquities Act. The Magistrate relied on a previous judgment of the High Court of Delhi in Dr. V.J.A. Flynn vs. S.S. Chauhan & Another.

The High Court of Delhi upheld the Magistrate’s decision, endorsing the view that prosecution under Sections 132 and 135 of the Customs Act was not maintainable. The Department of Customs then appealed to the Supreme Court.

Legal Framework

The Supreme Court examined the following key legal provisions:

• ✓ Section 3 of the Antiquities and Art Treasures Act, 1972: This section prohibits the export of antiquities and art treasures by any person other than the Central Government or authorized agencies.
  “3. Regulation of export trade in antiquities and art treasures. – (1) On and from the commencement of this Act, it shall not be lawful for any person, other than the Central Government or any authority or agency authorized by the Central Government in this behalf, to export any antiquity or art treasure.”
• ✓ Section 4 of the Antiquities and Art Treasures Act, 1972: This section states that the Customs Act, 1962, applies to all antiquities and art treasures, except where it is inconsistent with the provisions of the Antiquities Act. It also specifies that any confiscation under the Customs Act shall be made unless the Central Government directs otherwise.
  “4. Application of Act 52 of 1962. – The Customs Act, 1962, shall have effect in relation to all antiquities and art treasures, the export of which by any person (other than the Central Government or any authority or agency authorized by the Central Government) is prohibited under Section 3 save in so far as that Act is inconsistent with the provisions of this Act and except that (notwithstanding anything contained in section 125 of that Act) any confiscation authorized under that Act shall be made unless the Central Government on an application made to it in this behalf, otherwise directs.”
• ✓ Section 25 of the Antiquities and Art Treasures Act, 1972: This section provides penalties for the illegal export of antiquities and art treasures, including imprisonment and fine, without prejudice to any confiscation or penalty under the Customs Act.
  “25. Penalty. — (1) If any person, himself or by any other person on his behalf, exports or attempts to export any antiquity or art treasure in contravention of section 3, he shall, without prejudice to any confiscation or penalty to which he may be liable under the provisions of the Customs Act, 1962 (52 of 1962) as applied by section 4, be punishable with imprisonment for a term which shall not be less than six months but which may extend to three years and with fine.”
• ✓ Section 26 of the Antiquities and Art Treasures Act, 1972: This section outlines that prosecution for offenses under Section 25(1) can only be initiated with the sanction of a prescribed government officer.
  “26. Cognizance of offences. – (1) No prosecution for an offence under sub -Section (1) of Section 25 shall be instituted except by or with the sanction of such officer of Government as may be prescribed in this behalf.”
• ✓ Section 30 of the Antiquities and Art Treasures Act, 1972: This section states that the provisions of the Antiquities Act are in addition to, and not in derogation of, other laws in force.
  “30. Application of other laws not barred. – The provisions of this Act shall be in addition to, and not in derogation of, the provisions of the Ancient Monuments Preservation Act, 1904 (7 of 1904) or the Ancient Monuments and Archaeological Sites and Remains Act, 1958, (24 of 1958) or any other law for the time being in force.”
• ✓ Section 132 of the Customs Act, 1962: This section penalizes the use of false declarations or documents in customs transactions.
  “132. False declaration, false documents, etc. — Whoever makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document in the transaction of any business relating to the customs knowing or having reason to believe that such declaration, statement or document is false in any material particular, shall be punishable with imprisonment for a term which may extend to two years, or with fine, or with both.”
• ✓ Section 135 of the Customs Act, 1962: This section penalizes the evasion of duty or prohibitions, including the fraudulent evasion of any prohibition imposed under the Customs Act or any other law.
  “135. Evasion of duty or prohibitions. — (1) Without prejudice to any action that may be taken under this Act, if any person — (a) is in relation to any goods in any way knowingly concerned in misdeclaration of value or in any fraudulent evasion or attempt at evasion of any duty chargeable thereon or of any prohibition for the time being imposed under this Act or any other law for the time being in force with respect to such goods;”
• ✓ Section 3 of the Foreign Trade (Development and Regulation) Act, 1992: This section empowers the Central Government to make provisions for regulating foreign trade, including the prohibition or restriction of import or export of goods.
  “3. Powers to make provisions relating to imports and exports. -(1) The Central Government may, by Order published in the Official Gazette, make provision for the development and regulation of foreign trade by facilitating imports and increasing exports. (2) The Central Government may also, by Order published in the Official Gazette, make provision for prohibiting, restricting or otherwise regulating, in all cases or in specified classes of cases and subject to such exceptions, if any, as may be made by or under the Order, the import or export of goods or services or technology: (3) All goods to which any Order under sub -section (2) applies shall be deemed to be goods the import or export of which has been prohibited under section 11 of the Customs Act, 1962 (52 of 1962) and all the provisions of that Act shall have effect accordingly.”

Arguments

Appellant (Department of Customs) Arguments:

• ✓ The prosecution was launched under Sections 132 and 135 of the Customs Act because the ingredients of these offenses were present. This was not a prosecution under Section 25(1) of the Antiquities Act.
• ✓ Section 4 of the Antiquities Act saves proceedings under the Customs Act. The only limitation is that if there is any inconsistency between the two Acts, the Antiquities Act will prevail. There is no inconsistency in maintaining a prosecution under Sections 132 and 135 of the Customs Act.
• ✓ Section 25 of the Antiquities Act relates to penalties, and the present case is not a prosecution under Section 25 read with Section 3 of the Antiquities Act. A single set of facts can result in multiple offenses.
• ✓ The term “penalty” in Section 25 should not be narrowly interpreted as monetary exaction, but should include penal consequences after a prosecution under Sections 132 and 135 of the Customs Act.
• ✓ The High Court erred in applying the principle of ejusdem generis to Section 30 of the Antiquities Act, which states that the Act is in addition to any other existing law.

Respondent (Sharad Gandhi) Arguments:

• ✓ The Antiquities Act, enacted in 1972, is later than the Customs Act and should prevail.
• ✓ The Antiquities Act is a special act and should prevail over the general law contained in the Customs Act.
• ✓ Under Section 25 of the Antiquities Act, as amended, the Customs Act only permits confiscation and penalty proceedings, where penalty is understood as a monetary component.

Submissions Categorized by Main Submissions

Issues Framed by the Supreme Court

The Supreme Court considered the following key issues:

1. Whether the Customs Act, 1962, is an existing law within the meaning of Section 30 of the Antiquities and Art Treasures Act, 1972.
2. Whether prosecution under Sections 132 and 135(1)(a) of the Customs Act, 1962, is permitted under Section 4 of the Antiquities and Art Treasures Act, 1972, and what is the impact of Sections 25 and 26 of the Antiquities Act.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• The Supreme Court relied on Bharat Heavy Electricals Limited v. Globe Hi-Fabs Limited [2015 (5) SCC 718] to clarify that the principle of ejusdem generis should not be used to place a narrow construction where a larger and purposive construction is called for.
• The Supreme Court relied on Shiv Dutt Rai Fateh Chand & Ors. Vs. Union of India & Anr. [1983 (3) SCC 529] to clarify that Article 20(1) of the Constitution relates to the constitutional protection given to persons who are charged with a crime before a criminal court.
• The Supreme Court relied on V.K. Agarwal, Assistant Collector of customs v. Vasantraj Bhagwanji Bhatia And Others [1988 (3) SCC 467] to clarify that a separate charge could have been framed in respect of the distinct offense. If the offenses are not the same but are distinct, the ban imposed by Article 20(2) of the Constitution is inapplicable.
• The Supreme Court relied on State of Jharkhand V. Lalu Prasad Yadav [2017 (8) SCC 1] to clarify that the same facts may give rise to different prosecutions and punishments, provided the ingredients of both offenses are totally different.
• The Supreme Court relied on State (NCT of Delhi ) V. Sanjay [2014 (9) SCC 772] to clarify that a subsequent trial or prosecution and punishment has no bar if the ingredients of the two offenses are distinct.
• The Supreme Court relied on Assistant Collector of Customs, Calcutta vs. Sitaram Agarwala and Another [AIR 1966 SC 955] to clarify that offenses under the Sea Customs Act, 1878, are of two kinds: customs offenses dealt with by customs officers and criminal offenses dealt with by magistrates.
• The Supreme Court relied on K. Karunanidhi vs. Union of India and Another [1979 (3) SCC 431] to clarify that repugnancy arises when there is a direct inconsistency between two acts, the inconsistency is irreconcilable, and it is impossible to obey one without disobeying the other.
• The Supreme Court relied on Innoventive Industries Limited v. ICICI Bank and Another [2018 (1) SCC 407] to clarify that repugnancy between two statutes may be ascertained based on whether there is a direct conflict, whether Parliament intended an exhaustive code, and whether the laws occupy the same field.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the need to ensure that the Customs Act and the Antiquities Act could operate harmoniously without undermining each other. The Court emphasized that a single transaction could result in multiple offenses under different statutes, provided the ingredients of each offense were distinct. The Court also took into account the legislative intent behind both the Customs Act and the Antiquities Act, aiming to give full effect to both statutes. The Court also emphasized that the Antiquities Act was not intended to be an exhaustive code.

Fact:Law Ratio

Logical Reasoning

The Court considered the argument that the term “penalty” in Section 25 of the Antiquities Act should be narrowly interpreted as monetary exaction. However, the Court rejected this view, stating that the term “penalty” should be interpreted broadly to include all penal consequences, including prosecution under the Customs Act.

The Court also analyzed the interplay between Section 4 and Section 30 of the Antiquities Act. While Section 4 makes the Customs Act applicable except where it is inconsistent with the Antiquities Act, Section 30 states that the Antiquities Act is in addition to any other law. The Court held that the words “any other law” in Section 30 should be interpreted using the principle of ejusdem generis and would not include the Customs Act.

The Supreme Court explicitly stated, “The view which we are declaring does not do violence to the provisions of Section 25 of the Act.” The Court also emphasized, “The principle that a transaction or the same set of facts can give rise to more than one distinct offence provided the legislative intention in this regard is clear from the provisions which creates such offences cannot be lost sight of.” Further, the Court noted, “The complaint filed may be proceeded with as per law. However, we make it very clear that pronouncement of this order shall not come in the way of the Court deciding the matter on its merits.”

The Court did not have any dissenting opinions.

Key Takeaways

• ✓ Prosecution under the Customs Act, 1962, is permissible for offenses related to the illegal export of antiquities and art treasures.
• ✓ The Antiquities and Art Treasures Act, 1972, does not provide an exclusive legal framework for such cases.
• ✓ A single set of facts can give rise to multiple offenses under different statutes, provided the ingredients of each offense are distinct.
• ✓ The term “penalty” in Section 25 of the Antiquities Act should be interpreted broadly to include all penal consequences, including prosecution under the Customs Act.
• ✓ The principle of ejusdem generis should be applied carefully and not used to place a narrow construction where a larger and purposive construction is called for.

Directions

The Supreme Court directed that the complaint filed by the Department of Customs be proceeded with as per law, emphasizing that the trial court should decide the matter on its merits without being influenced by any observations made in the judgment.

Development of Law

The ratio decidendi of this case is that prosecution under Sections 132 and 135(1)(a) of the Customs Act, 1962, is not barred in regard to the antiquities or art treasures. This decision clarifies that the Customs Act can be invoked for offenses related to the illegal export of antiquities, which was a departure from the High Court’s ruling that had limited the prosecution to the Antiquities Act.

Conclusion

In the case of Department of Customs vs. Sharad Gandhi, the Supreme Court held that prosecution under the Customs Act, 1962, is permissible for offenses related to the illegal export of antiquities. The Court overturned the High Court’s decision, which had held that the Antiquities and Art Treasures Act, 1972, provided the exclusive legal framework for such cases. The Supreme Court clarified that a single set of facts could give rise to multiple offenses under different statutes, provided the ingredients of each offense were distinct. This judgment ensures that those involved in the illegal export of antiquities can be prosecuted under both the Antiquities Act and the Customs Act, thereby strengthening the legal framework for protecting India’s cultural heritage.