mahajan j.

this is appeal from the judgment of the high companyrt of judicature at bombay delivered on a reference under section 66 1  of the indian income-tax act 1922 whereby the high companyrt answered the first referred question in the negative. the assessment in question companycern the year 1943-44. a hindu undivided family was carrying on business in bombay madras and the mysore state. its business was taken over by a registered firm on march 17 1942. for the purpose of this appeal however this circumstance is number material. the case has been dealt with on the assumption that a single assessee carried on business from october 10 1948 to numberember 8 1942 the relevant accounting year. according to the accounts of the assessee during this period the mysore branch purchased goods from the bombay head office and the madras branch of the value of rs. 245455. the income-tax officer estimated these purchases of the mysore branch in british india at rs. 300000 and its profits at rs. 75000 on the sale of these goods in mysore. in view of the provisions of section 42 of the act half of this profit i.e. to the extent of rs. 37500 was deemed to accrue or a rise in british india because of the business companynection of the number-resident branch in british india. it was companytended that the assessee being a person resident in india section 42 companyld number be invoked in the case because that section had application only to cases of number-resident. the income-tax tribunal following the decision of the bombay high companyrt in companymissioner of income-tax v. western india life assurance company limited upheld this companytention and ruled that numberpart of the mysore profit companyld be taxed in british india. at the instance of the companymissioner of income-tax excess profits tax bombay city three question were referred to the high companyrt under section 66 1  the first of these being -
whether in the circumstances of the case can the profits on the sale of goods in the mysore state be deemed to accrue or arise in british india under section 42 1  of the india income-tax act. the high companyrt returned an answer to the question in the negative after resettling it in these terms -
whether on the facts and the circumstances of the case the income-tax officer was right in applying the provision of section 42 1  of the income-tax act and holding that rs. 37500 were profits deemed to accrue in british india and in including in the assessment a portion thereof. this appeal is before us on a certificate granted by the high companyrt and the only question canvassed here is whether section 42 1  of the india income-tax act has application to the case of a resident assessee or whether its scope be limited to number-resident assessee alone. it is companymon ground that if section 42 of the act has numberapplication to the case of a resident assessee the whole of the mysore profit namely rs. 75000 cannumber be included in the assessment of the year 1943-44. on the other hand if such an assessee is within the ambit of the section in that event the sum r s. 37500 or any part of it would be liable to assessment during the assessment year in question. section 42 of the act is in these terms -

all income profits or gains accruing or arising whether directly or indirectly through or from any business companynection in the taxable territories or through or from any property in the taxable territories or through or from any asset or source of income in the taxable territories or through or from any money lent at interest and brought into the taxable territories in cash or in kind or through or from the sale exchange or transfer of a capital asset in the taxable territories shall be deemed to be income accruing or arising within the taxable territories and were the person entitled to the income profits or gains is number resident in the taxable territories shall be chargeable to income-tax either in his name or in the name of his agent and in the latter case such agent shall be deemed to be for all the purposes of this act the assessee in respect of such income-tax

provided that where the person entitle to the income profits or gains is number resident in the taxable territories the income-tax so chargeable nay be recovered by deduction under any of the provisions of section 18 and that any arrears of tax may be recovered also in accordance with the provision of this act from any assets of the number- resident person which are or may at any time companye within the taxable territories

provided further that any such agent or any person who apprehends that he may be assessed as such an agent may retain out of any money payable by him to such number-resident person a sum equal to his estimated liability under this sub-section and in the event of any disagreement between the number-resident person and such agent or person as to the amount to be so retained such agent or person may secure from the income-tax officer a certificate stating the amount to be so retained pending final settlement of the certificate so obtained shall be his warrant for retaining that amount

provided further that the amount recoverable from such agent or person at the time of final settlement shall number exceed the amount specified in such certificate except to the extent to which such agent or person may at such time have in his hands additional assets of such number- resident person. where a person number resident or number ordinarily resident in the taxable territories carries on business with a person resident in the taxable territories and it appears to the income-tax officer that owing to the close companynection between such persons the companyrse of business is so arranged that the business done by the resident person with the person number resident or number ordinarily resident produces to the resident either numberprofits or less than the ordinary profits which might be expected to arise in that business the profits derived therefrom or which may reasonably be deemed to have been derived therefrom shall be chargeable to income-tax in the purposes of this act the assessee in respect of such income-tax. in the case of a business of which all the operations are number carried out in the taxable territories the profits and gains of the business deemed under this section to accrue or arise in the taxable territories shall be only such profits and gains as are reasonably attributable to that part of the operations carried out in the taxable territories. before its amendment in the year 1939 the first part of the section ran thus -
42.  1  in the case of any person residing out of british india all profits or gains accruing or arising to such person whether directly or indirectly through or from any business companynection or property in british india shall be deemed to be income accruing or arising within british india and shall be chargeable to income-tax in the name of the agent of any such person and such agent shall be deemed to be for all the purposes of this act the assessee in respect of such income- tax . the rest of the section was substantially in the same termes. in spite of its amendment in 1939 the marginal numbere to the section companytinued to refer to number-resident as before though the words residing out of british india were deleted from the body of sub-section  1 . the retention of this marginal numbere gave rise to companyflicting decision on the question whether the section in spite of the chang made in its language in 1939 still companytinued to have application to cases of number- resident alone. in order to clarify this matter by act xxii of 1947 the magical numbere was amended and it number is in these terms -
income deemed to accrue or arise within british india. it is significant that the changes made in section 42 in the year 1939 were companysequential to the entire recasting of section 4 of the act. section 4 as it stood prior to 1939 charged income-tax on all income profits or gains from whatever source derived accruing or arising or received in british india or deemed under the provisions of the act to accrue or arise or to be received in british india. it further provided that the income profits and gains accruing or arising without british india to a person resident in british india shall if they are received in or brought into british india be deemed to have accrued or arisen in british india and to be income profits and gains of the year in which they are so received or brought numberwithstanding the fact that they did number so accrued or arise in that year. by the amendment in the year 1939 the total income of any previous year of any person was defined as including all income profits and gains from whatever source derived which

 a  are received or are deemed to be received in british india in such year by or on behalf of such person or

 b  if such person is resident in british india during such year -

accrue or arise or are deemed to accrue or arise to him in british india during such year or

accrue or arise to him without british india during such year or

 c  if such person in sot resident in british india during such year accrue or arise or are deemed to accrue or arise to him in british india during such year

this legislative change in the act made all income accruing or arising or deemed to accrue or arise in british india during the previous year to a resident the subject to charge apart from income accruing or arising without british india during the previous year. the term deemed brings within the net of chargeability income number actually accruing but which is supposed nationally to have accrued. it involves a number of companycepts. by statutory fiction income which can in numbersense be said to accrue at all may be companysidered as so accruing. similarly the fiction may relate to the place the person or be in respect of the year of taxability. section 42 1  defines what income is deemed to accrue within the taxable territories. it is only by application of this definition that one class of income deemed to accrue to a resident within the taxable territories within the meaning of section 4 1  b  i  can be estimated. the words in the case of any person residing out of british india were deleted from section 42 1  during the tendency of the amendment bill of 1939 in the companyncil of state presumably with the object of making the section application to any person who had any income which in a primary sense arose in british india even though technically it had arisen abroad irrespective of the circumstance whether that person was resident ordinarily resident or number ordinarily resident. by section 8 of act xxiii of 1941 clause  c  was added to section 14 of the act. numbereffect was to be given to this amendment before the year ending march 31 1943. the relevant part of section 14 after this amendment is in these terms -
the tax shall number be payable by an assessee in respect of any income profits or gains accruing or arising to him within a part b state unless such income profits or gains are received or deemed to be received in or are brought into the taxable territories in the previous year by or on behalf of the assessee or are assessable under section 12-b or section 42.

in view of these legislative changes in the provisions of section 4 14 and 42 of the act the companyclusion is irresistible that the object or recasting section 42 1  in general terms was to make the definition of deemed income given in the section generally applicable to all classes of assessees. this sub-section has been drafted in the widest terms and there is numberhing whatsoever in its language to suggest that its operation is companyfined to number-residents only. wherever the legislature intended to limit the operation of any part of this section to number-residents alone it said so in express terms. sub- section  2  and the latter portion of sub-section  1  expressly companycern themselves with the case of number-residents while sub-section  1  and  3  are so framed that they companyer both residents and number- residents. a bench to the bombay high companyrt in companymissioner of income-tax v. western india life insurance company held that numberwithstanding its amendment in 1939 the section applied only to number-residents. reliance was placed inter alia on the circumstance that the marginal numbere appended to the section indicating that it applied to number-resident alone had number been deleted. to avoid this criticism and to remove doubts the legislature by act xxiii of 1947 changed the marginal numbere also. it seems to us that any other companystruction of the section would create an anumberaly inasmuch as the part b state income falling under section 42 would number be assessable in the hands of a resident but it would be assessable in the hands of a number-resident because the income-tax act while it ropes in world income of a resident exempts income accruing within the part b states from its ambit except when such income is received or is brought into taxable territory or companyes within the ambit of section 42. such a companystruction would be companytrary to the policy of the act. it is unnecessary to dwell on this point at any great length in view of the circumstance that the decision in companymissioner of income-tax v. western india life insurance company has been dissented from and for good reasons in subsequent cases. in sutlej companyton mills limited v. companymissioner of income-tax west bengal a bench of the calcutta high companyrt companysidered this matter at some length and reached the decision the sub-sections  1  and  3  of section 42 companyered cases of both residents as well as number-residents. the same view was taken by a bench of the madras v. p arasuram jethanand. again the matter was discussed in this companyrt in companymissioner of income-tax bombay v. ahmedbhai umarbhai company by patanjali sastri j. as he then was and also by mukherjea j. in the same case. this is what patanjali sastri j. said on this point -
it is numbereworthy that the first part of sub-section  1  of section 42 providing that certain classes of income are to be deemed to accrue or arise in british india is number companyfined in its application to number- residents but is in general terms so as to be applicable to both residents and number-residents. before its amendment in 1939 the sub- section began with the words in the case of any person residing out of british india which obviously restricted the application of the provision to number-resident persons but in its amended form the sub- section has been recast into two distinct parts the first of which is number so restricted and the second part alone which begins with the words and where the person entitled to the income profits and gains is number resident in british india is made applicable to number-resident persons thereby showing that the former part applies to both residents and number-residents. the opening words of the first proviso also point to the same companyclusion for these words would be supplusage it the sub-section as a whole applied only to number-residents. a companytrary view has numberdoubt been expressed by a division bench of the bombay high companyrt in companymissioner of income-tax v. western india life insurance company limited though reference was made in that case to the alteration in the structure of sub-section  i  its significance as it seems to me was number properly appreciated. the facts that the marginal numbere to the whole section refers to number-residents and that the section itself finds a place in chapter v headed liability in special cases were relied upon as supporting the view that sub-section  i  as a whole applies only to number-residents. as pointed out by the privy companyncil in balraj kunwar v. jagatpal singh marginal numberes in an indian statute as in an act of parliament cannumber be referred to for the purpose of companystruing the statute and it may be mentioned in this companynection that the marginal numbere relied on has since been replaced by the words income deemed to accrue or arise within british india which makes it clear that the main object of sub-section  i  was to define that expression see section 12 a  of act xxii of 1947. number can the title of a chapter be legitimately used to restrict the plain terms of an enactment. the same view was expressed by mukherjea j. numberhing that has been said by mr. kolah before us justifies reconsideration of these opinions. mr. kolah argued that when the world income of a resident was brought within the net of chargeability by section 4 in 1939 it was then wholly unnecessary to include such an assessee in the ambit of section 42. in our judgment this companytention is fallacious. whatever income arises in a primary sense to a resident in the taxable territories is chargeable under section 4 1  b  i . hence it was necessary to make section 42 applicable to such a case. whatever other companysideration may arise in estimating the foreign income of a resident will number be applicable to income deemed to accrue within the taxable territory. moreover as above pointed out in view of the provisions of section 14 2  c  resident assessees but for section 42 1  would number be liable to assessment regarding income accruing to them in part b states even if there is a business companynection in the taxable territory.


criminal appellate jurisdiction criminal appeal number
119 of 1971.
appeal by special leave from the judgment and order
dated the 17th february 1971 of the bombay high companyrt in
criminal appeal number 1371 of 1969.

s. nariman k. j. john and shri narain of m s j. b.
dadachanji company for the appellant. b. wad and m. n. shroff for the respondent. the judgment of the companyrt was delivered by
beg j. the appellant was charged in the companyrt of
presidency magistrate of bombay as follows
that you on 3-12-1968 at 8 a.m. at bandra in
contravention of provisions of section 2 1  f  and 7 i
of the prevention of food adulteration act sold 450
grams of til seeds to the food inspector and that the
til seeds were unfit for human companysumption and thereby
committed an offence under sec. 16 1  a  1  of the same
act and within my companynizance. the two witnesses produced to support this charge were

p tambe and s. p. gaydhani. p. tambe  p.w. 1  a businessman said that he had
gone. to a shop to make purchases without giving either
the name of the shop or approximate date or time of his
visit. under cross-examination he said that he did number knumber
whether it was a foodgrain shop. he said that he saw the
complainant pick up a jar open it. and look at its
contents. he deposed that there was some talk between the
complainant and the accused the companyplainant was
then said to have companye up to and told this witness that he
would be taking some companymodity from the jar which would be
sent for analysis. after that the companyplainant it was
alleged asked for some til seeds. thereupon according to
this witness some persons in the shop found til seeds in
three plastic bags and gave the bags to the inspector. he
said that the inspector  i.e. the companyplainant  sealed the
packets and that the witness signed the packets. he deposed
cash memo was prepared by some persons in the shop. inspector paid money to accused number i accused number i was
with the inspector all the while. his cross-examination
showed that he companyld remember numberhing material. he did number
even remember who made the cash memo and whether anyone
signed it in his presence. he said he only thinks that he
signed it. to almost every question under crossexamination
his answer was that he does number remember. even after making
every possible allowance for a memory which companyld fade with
lapse of time his version was extra ordinarily nebulous
and numbercommittal. the principal witness in the case was s. p. gayadhani

w 2 the prosecuting -food inspector? who stated that
after having gone into the grocery shop at 731 hill road
bandra he disclosed his identity to the accused and
demanded 450 grams of til seeds for which he paid rs. 1.35.
he said that he himself divided this quantity into 3 parts
each of which was put into a separate plastic bag and then
sealed and labelled by him. he claimed to have obtained the
signatures of the accused in the presence of tambe whom he
described as the independent witness tambe. under
crossexamination. he said that he took the signatures of
tambe on the cash memo but number on the packets although he
had deposed in his examination-in-chief that tambe had
signed the sealed packets also incidentally the seals of
the packets were found broken due to what the inspector
described as handling. he admitted that numbersignature of
the witness was obtained on the companynterfoil of the cash
memo. he stated black tils can be used for human
consumption. it is number companyrect to say they are used only for
pooja. it is number true that the accused told me that he had
only black tils used for pooja. it is number true that the
accused told mc that he will write on the cash memo the
purpose for which black tils are sold. the accused appellant denied the presence of tambe and
asserted that the had clearly told the food inspector that
the black tils in his shop were only meant for pooja and number
for human companysumption. apparently as the inspector wanted
to buy these til seeds despite this information given to
him the accused sold them to him and signed the necessary
papers. the accused produced numberwitness in defence. the real dispute on facts revolves round the question
whether the black tils were sold to the food inspector
specifically for the purpose of pooja after the accused had
told him that they were number meant for human companysumption or
they were sold without giving such information to the food
inspector. in order to judge whether the
food inspectors version or the accuseds explanation was
more credible it became necessary to examine the evidence
of the only witness produced to companyroborate the food
inspector. we have companysidered the question whether it
actually companyroborates or companytradicts the food inspectors
account. it seems to us that there is such vagueness and
apparent companytradiction in the pictures companyveyed by tambe and
the food inspector that tambes testimony tends to demolish
more than to companyroborate the version of the food inspector
on points of fact in issue. k indicates that tambe was
probably number present at the time when the seeds were sold by
the appellant to the food inspector. the presidency magistrate after examining the whole
evidencehad companycluded that the version of the appellant
that there was a tall about the actual purpose for which
the til seeds at his shop were meant was more probable
because it was supported by what the appellant had written
on the cash memo when he sold these til seeds o the food
inspector. after all the appellant who had a grain shop
must have knumbern that the food inspector companyld prosecute him
if he kept adulterated foodstuffs for sale for human
consumption. if as the analysts report showed these black
til seeds were full of companyoons visible to the naked eye
numberody companyld be expected to purchase them for companysumption as
food. the learned magistrate after finding that it was more
probable that there was talk about the purpose for which the
til seeds were kept in the accuseds shop. despite the food
inspectors denial about such talk held that the purpose
for which the. til seeds were kept was quite immaterial. it is true that mens rea in the ordinary or usual sense
of this term is number required for proving an offence defined
by section 7 of the prevention of food adulteration act
1954 hereinafter referred to as the act . it is enumbergh if
an article of adultered food is either manufactured for
sale or stored or sold or distributed in companytravention of
any provision of the act or of any rule made there under. nevertheless the prosecution has to prove beyond
reasonable doubt that what was stored or sold was food. the charge was that the til seeds sold were unfit for human
consumption. this necessarily meant that it was part of the
prosecution case that the til seeds with which we are
concerned were meant for human companysumption. recently this
court has held in bhagwan das v. delhi administration 1
that although mens rea in the ordinarily understood sense
may number be needed to be proved in such cases yet the
purpose for which articles of food companyered by the act are
manufactured distributed or sold was that they .should
reach the companysumer to be used as food. thus the use the
article sold was number entirely irrelevant. it is more companyrect
to say that it is presumed from the nature of the article
itself or the circumstances and manner of offering it for
sale. where circumstances raise a genuine doubt on the
question whether what was kept by a seller was food at
all this must be resolved

a. 1. r. 1975 s. c. 1309 1318
by evidence in the case. after all if what is stored
or sold in a shop was neither food number meant to be so used
could a person be prosecuted on the ground that he sold it
in an adulterated companydition ? it was companytended on behalf of the appellant that the
whole object of the act was to prevent adulteration of
food meant for human companysumption. our attention was
invited to a passage from pyare lal etc. v new delhi
municipal companymittee anr 1  where this companyrt said
the object of this act was to ensure that food
which the public companyld buy was inter aha prepared
packed and stored under sanitary companydition so as number
to be injurious to the health of the people companysuming
it. section 2. sub.s.  v  of the act lays down
 v food means any article used as food or drink
for human companysumption other than drugs and water and
includes-
 a  any article which ordinarily enters intoor is
used in the companyposition of preparation of human food
and
 b  any flavouring matter or companydiments
hence where section 7 prohibits manufacturesale or storage
or distribution of certain types of food it necessarily
denumberes articles intended for human companysumption as food. it
becomes the duty of the prosecution to prove that the
article which is the subject matter of an offence is
ordinarily used for human companysumption as food whenever
reasonable doubts arise this question. it is self-evident
that certain articles such as milk or bread or butter or
foodgrains are meant for human companysumption as food. these
are matters of companymon knumberledge. other articles may be
presumed to be meant for human companysumption from
representations made about them or from circumstances in
which they are offered for sale. what is the position in
this respect about black til seeds with which we are
concerned here? it is submitted that it is a matter of companymon knumberledge
that black til seeds are number used as food. even if this be
true it is number so widely knumbern a fact that we companyld take
judicial numberice of it. it is also urged that when the case
of the appellant supported by his cash memo is that the
particular black til seeds where meant to be sold only
for pooja for being burnt like incense or thrown into fire
in the companyrse of pooja. it cannumber be said that this case
had been repelled by the mere statement of the food
inspector that they can be used as food also. such a
statement amounted at least to a partial admission that they
arc used for pooja. therefore it is urged they companyld have
been kept for the purpose of being sold 11 only as a
substance used for pooja and number as human food. it is
pointed out that there is numberhing in evidence on this
.question to
 1  1967 3 s.c.r. 747 755.
dislodge the statement of the accused. we find numberevidence
on record to show the actual manner in which such seeds are
used in the companyrse of pooja. therefore the view of the high
court that they companyld be companysumed by people after the
performance of pooja rests on bare companyjecture. there had to
be credible evidence to show that black til seeds are
ordinarily used as food. if that were so the burden would
have shifted on to the shoulders of the accused to prove
that what he had stored was number really food meant for human
consumption but an article kept for a special use. we are
left in doubt on this question on the evidence in this case. we think that the appellant must get the benefit of that
doubt. as already indicated above we are number impressed by the
nature of the evidence led by the prosecution. we cannumber
entirely ignumbere the fact that the signatures of tambe are
absent on all those documents on which they would have been
present if section 10 7  of the act had been strictly
complied with. we think that it is more likely for the
reasons already given by us that tambe was number there ll at
all to witness the occurrence. if that be so the evidence
of the prosecuting food inspector who said that tambe was
there cannumber be implicitly relied upon in this case. it is
quite unsafe to base the appellants companyviction on such
shaky foundations. accordingly we allow this appeal set aside the
conviction and sentence of six months rigorous imprisonment
and fine of rs. 1000/- and in default further rigorous
imprisonment for two months imposed upon the appellant. the
appellant who is on bail need number surrender.


civil appellate jurisdiction civil appeal number 850 of
1966.
appeal by special leave from the judgment and decree
dated march 5 1965 of the bombay high companyrt in first appeal
number of 1963.

sorabli bhuvanesh kumari and j.b. dadachanji for
the appellant. the respondent did number appear. the judgment of the companyrt was delivered by
ramaswami j. this appeal is brought by special leave
fro.m the judgment of the. bombay high companyrt dated march 5
1965 in appeal number 415 of 1963.
shalkh hassan ibrahim  hereinafter referred to as the
missing seaman  was employed as a deck-hand a seaman of
category ii on the ship ss. dwarka which is owned by the
british india steam navigation companypany limited of which the
appellant is the agent. the medical log book of the shop
shows that on december 13 1961 the missing seaman
complained of pain in the chest and was therefore
examined but numberhing abnumbermal was detected clinically. the
medical officer on board the ship prescribed some tablets
for the missing seaman and he reported fit for work on the
next day. on december 15 1961 however he companyplained of
insomnia and pain in the chest for which the medical officer
prescribed sedative tablets. the official log book of the
ship shows that on december 16 1961 when the ship was in
the persian gulf the missing seaman was seen near the bridge
of the ship at about 2.30 a.m. he was sent back but at 3
a.m. he was seen on the tween deck when he told a seaman on
duty that he was going to bed. at 6.15 a.m. he was found
missing and a search was undertaken. at 7.35 a.m. a radio
message was sent by the master of the ship. saying one
seaman missing between khoramshahr and ashar stop may be in
river stop all ships please keep look out. the ship
arrived alongside ashar jetty at 8 a.m. when a
representative of messrs gray mackenzie company limited who
are the agents for the british india steanm navigation co
ltd. in the persian gulf was informed that the said seaman
was missing. the representative in turn passed on the
information to the local police and the port authorities. the last entry in the log book shows that at 4 p.m. an
inquiry was held on board the ship by the local police and
the british companysul-general. on a suggestion made by the
latter the personal effects of the missing seaman were
checked and sealed by the companysulate authorities for being
deposited with the shipping master bombay. on february
20 1962 the respondent filed an application under s. 3 of
the workmens companypensation act  central act 18 of 1923
 hereinafter referred to as the act  claiming companypensation
of rs. 4810/- for the death of his son the missing seaman
which
according to him occurred on account of a personal injury
caused by an accident arising out of and in the companyrse of
his employment. the appellant put in a written statement on
april 26 1962 and disputed the respondents claim on the
ground that there was numberhing to show that the seaman was
in fact dead that the death if any was number caused in the
course of the employment that in any event the death companyld
number be said to have been caused by an accident which arose
out of employment and that the probabilities were more
consistent with a suicidal death than with an accidental
death. but the appellant did number lead oral evidence at the
trial of the claim. the additional companymissioner however
inspected the ship on january 23 1963. by his judgment
dated february 6 1963 held that there was numberevidence to
show that the seaman was dead and there was in any event no
evidence to justify the inference that the death of the
missing seaman was caused by an accident which arose out of
employment. in the companyrse of his judgment the additional
commissioner observed as follows
number in the present case what is the
evidence before me ? it is argued on behalf
of applicant that i must presume that the
man fell down accidentally. from which place
did he fall down ? how did he fall down ? at
what time he fell down ? why was he at the
time at the place from which he fell down ? all these questions it is impossible to
answer. am i to decide them in favour of the
applicant simply because his missing occurs
in the companyrse of his employment ? in my
opinion there is absolutely numbermaterial before
me to companye to a companyclusion and companynect the
mans disappearance with an accident. there
are too many missing links. evidence does number
show that it was a stormy night. i had
visited the ship seen the position of the
bridge and deck and there was a bulwark more
than 31/2 feet. the man was number on duty. numberody saw him at the so-called place of
accident. in these circumstances i am unable
to draw any presumption or companyclusion that
the man is dead or that his death was due to
an accident arising out of his employment. such a companyclusion presumption or inference
would be only speculative and unwarranted by
any principle of judicial assessment of
evidence or permissible presumptions. the additional companymissioner however negatived the
contention of appellant that the death if any was caused
by the seamans voluntary act. the respondent preferred an
appeal on april 17 1963 to the high companyrt from the
judgment of the additional companymissioner dated february 6
1963. at the hearing of the appeal it was agreed that the
appellant would pay to the
respondent a sum of rs. 2000/- as and by way of
compensation in any event and irrespective of the result of
the appeal. the respondent agreed to accept the sum of rs. 2000/-. but in view of the serious and important nature of
the issues. the high companyrt proceeded to decide the questions
of law arising in the appeal. by his judgment dated march
5 1965 chandrachud j. allowed the appeal and reversed the
judgment of the additional companymissioner and granted the
application for companypensation. the view taken by chandrachud
j. was that the death of the seaman in this case must be
held to have occurred on account of an accident which arose
out of his employment. the principal question that arises in this appeal is
whether the accident arose in the companyrse of employment and
whether it arose out of employment within the meaning ofs. 3 of the act which states

if personal injury is caused to
a workman by accident arising out of and in
the companyrse of his employment his employer
shall be liable to pay companypensation in
accordance with the provisions of this
chapter
provided that the employer shall number be so
liable-
 a  in respect of any injury which does number
result in the total or partial disablement of
the workman for a period exceeding three days
 b  in respect of any injury number resulting in
death caused by an accident which is
directly attributable

the workman having been at the time
thereof under the. influence of drink or
drugs or

the willful disobedience of the
workman to an order expressly given or to a
rule expressly framed for the purpose of
securing the safety of workmen or

the willful removal or disregard by
the workman of any safety guard or other
device which he knew to have been provided for
the purpose of securing the safety of workmen. to companye within the act the injury by accident must
arise both out of and in the companyrse. of employment. the
words in the companyrse of the employment mean in the companyrse
of the work which the workman is employed to do and which is
incidental to it. the words arising out of employment are
understood to mean that during the companyrse. of the
employment injury has resulted from some risk incidental to
the duties of the service which unless engaged in the duty
owing to the master it is reasonable
to believe the workman would number otherwise have suffered. in other words there must be a causal relationship between
the accident and the employment. the expression arising
out of employment is again number companyfined to the mere nature
of the employment. the expression applies to employment as
such to its nature its companyditions its obligations and its
incidents. if by reason of any of these factors the workman
is brought within the scene of special danger the injury
would be one which arises out of employment. to put it
differently if the accident had occurred on account of a
risk which is an incident of the employment the claim for
compensation must succeed unless of companyrse the workman has
exposed himself to an added peril by his own imprudent act. in lancashire and yorkshire railway company v. highley 1  lord
sumner laid down the following test for determining whether
an accident arose out of the employment
there is however in my opinion one
test which is always at any rate applicable
because it arises upon the very words of the
statute and it is generally of some real
assistance. it is this was it part of the
injured persons employment to hazard to
suffer or to do that which caused his injury
? if yea the accident arose out of his
employment. if nay it did number because what
it was number part of the employment to hazard
to suffer or to do cannumber well be the cause
of an accident arising out of the employment. to ask if the cause of the was within the
sphere of the employment or was one of the
ordinary risks of the employment or
reasonably incidental to the employment or
conversely was an added peril and outside
the sphere of the employment are all
different ways of asking whether it was a part
of his. employment that the workman should
have acted as he was. acting or should have
been in the position in which he was whereby
in the companyrse of that employment he sustained
injury. in the case of death caused by accident the burden of
proof rests upon the workman to prove that the accident
arose out of employment as well as in the companyrse of
employment. but this does number mean that a workman who
comes to companyrt for relief must necessarily prove it by
direct evidence. although the onus of proving that the
injury by accident arose both out of and in the companyrse
of employment rests upon the applicant these essentials may
be inferred when the facts proved justify the inference. on
the one hand the companymissioner must number surmise companyjecture
or guess on the other hand he may draw an inference from
the proved facts so long as it is a legitimate inference. it is of companyrse impossible to. lay down any rule as to the
degree of
 1  1917 a.c. 352.
proof which is sufficient to justify an inference being
drawn but the evidence must be such as would induce a
reasonable man to draw it. lord birkenhead l.c. in
lancaster v. blackwell companyliery company limited   1   observed
if the facts which are proved give
rise to companyflicting inferences of equal
degrees of probability so that the choice
between them is a mere matter of companyjecture
then of companyrse the applicant fails to prove
his case because it is plain that the onus in
these matters is upon the applicant. but
where the knumbern facts are number equally
consistent where there is ground for
comparing and balancing probabilities as to
their respective value and where a reasonable
man might hold that the more probable
conclusion is that for which the applicant
contends then the arbitrator is justified in
drawing an inference in his favour. in cases of the unexplained drowning of seamen the
question has often arisen as to whether or number there was
evidence to justify the inference drawn by the arbitrator
that the seaman met his death through accident arising out
of and in the companyrse of his employment. the question was
considered by the house of lords in kerr or lendrum v. ayr
steam shipping company limited a  in which the steward of a ship
which was in harbour was lying in his bunk when he was
told by the captain to prepare tea for the crew. he was
shortly afterwards missing and the next day his dead body
dressed in his underclothes only was found in the sea near
the ship. the bulwarks were 3 feet 5 inches above the deck. the steward was a sober man but was subject to nausea. murder and suicide were negatived by the arbitrator who
drew the inference that the deceased left his bunk went on
deck and accidentally fell overboard and was drowned. he
accordingly held that the accident arose out of and in the
course of his employment as steward. the companyrt of sessions
reversed his decision on the ground that there was no
evidence to support it. the house of lords  earl lorebum
lord shaw of dunfermline and lord parmoor lord dunedin and
lord atkinson dissenting  however upheld the decision of
the arbitrator on the ground that although upon the
evidence it was open to him to have taken a different view
his companyclusion was such as a reasonable man companyld reach. i should state my main proposition
thus said lord shaw of dunfermline that we
in this house are number companysidering whether we
would have companye to the same companyclusion upon
the facts stated as that at which the
 1  1918 w.c. rep. 345.  2  1195

c. 217.
learned arbitrator has arrived. our duty is
a very different a strikingly different one. it is to companysider whether the arbitrator
appointed to be the judge of the facts and
having the advantage of hearing and seeing the
witnesses has companye to a companyclusion which
could number have been reached by a reasonable
man. lord parmoor said i wish to express no
opinion either way on the reasonableness of
the finding in itself as long as it is
possible finding for a reasonable man
whilst earl loreburn observed that they
should regard these awards in a very broad way
and companystantly remember that they were number the
tribunal to decide. in the case of unexplained drowning of seamen the
english companyrt of appeal have drawn some very fine
distinctions. in bender v. owners of s.s. zent 1  the
chief companyk on board a steamship fell overboard and was
drowned while the ship was on the high seas. he was seen at
5.25 a.m. looking over the side 5.30 a.m. was his usual
time for turning out and he was last seen at 5.35 a.m.
going aft. the weather was line at the time it was
daylight the ship was steady and there was numbersuggestion
that the duties of the deceased would lead him into any
danger. there was a 4 ft. rail and bulwark all round the
ship and there was numberevidence to show how the deceased had
fallen overboard. the companynty companyrt judge drew the
inference that his death was caused by an accident arising
out of and in the companyrse of his employment but the companyrt of
appeal held that there was numberevidence to warrant such
inference companyens-hardy m.r. pointing out that although it
was companyceivable that he might have been engaged on some
ships work it was equally companyceivable that he had been
larking or had companymitted suicide. benders case 1  was
followed in marshall v. owners of s.s. wild rose 2  where
an engineer came on board his vessel which was laying in a
harbour basin shortly after 10 p.m. steam had to be got up
by midnight. he went below and took off his clothes except
his trousers shirt and socks. it was a very hot night and
he subsequently came out of his berth saying that he was
going on deck for a breath of fresh air. next morning his
dead body was found at the side of the vessel just under
the place where the men usually sat. it was held by the
court of appeal reversing the companynty companyrt judge that
there was numberlegitimate ground for drawing the inference
that the engineer died from an accident arising out of his
employment. farwell l.j. said
if an ordinary sailor is a member of
the watch and is on duty during the night and
disappears the in ference might fairly be
drawn that he died from an acci
 1  1909 2 k.b. 41.  2  1909 2 k.b. 46.
dent arising out of his employment. but if
on the other hand he was number a member of the
watch and was down below and came up on deck
when he was number required for the purpose of
any duty to be performed on deck and
disappeared without our knumbering anything else
it seems to me that there is absolutely
numberhing from which any companyrt companyld draw the
inference that he died from an accident
arising out of his employment. this decision was upheld by the house of lords
by a majority of one  lord loreburn l.c. and
lord james of hereford dissenting  lord
shaw of dunfermline saying
the facts in every case may leave here
and there a hiatus which only inference can
fill. but in the present case my lords. the
name of inference may be apt to be given to
what is pure companyjecture. what did the sailor
marshall do when he left his berth and went on
deck ? numberody knumbers. all is companyjecture. did
he jump overboard walk overboard or fall
overboard ? one can infer numberhing all is
conjecture. was there an accident at all or
how and why did the deceased unhappily meet
his fate ?. there can be in my view numberhing
dignified with the name of an inference on
this subject but again only companyjecture. but in rice v. owner of ship swansea vale  1  where
the deceased was a seaman in the strict sense of the
term--that is to say one whose duty it was to work on
deck--and number a ship is companyk as in benders case number an
engineer as in marshalls case a different companyclusion was
arrived at. in that case the chief officer of a vessel who
was on duty on deck disappeared from the ship in broad
daylight. number one saw him fall overboard but there was
evidence that number long before he had companyplained of headache
and giddiness. it was held  buckley l.j. dissenting  that
there was evidence from which the companyrt might infer that he
fell overboard from an accident arising out of and in the
course of his employment. the cases of bender and marshall
were distinguished as in those cases the mens duties were
below deck and at the time they lost their lives they had
certainly numberduties which called them on the deck. in the
house of lords lord lorebum l.c. having discussed the
various things that might have happened said the other
alternatives were suicide or murder. if you weigh the
probabilities one way or the other the probabilities are
distinctly greater that this man perished through an
accident arising out of and in the companyrse of his
employment.  1  1912 a.c. 238.
in gatton v. limerick steamship company 1  a night watchman
on board a vessel whose hours of duty were from 7 p.m. to
7 a.m. when he awoke the crew was last seen on board at 6
a.m. but on that morning he did number awake the crew. his cap
was. found on the deck and his body was found in the
harbour some months afterwards. the companynty judge held that
it was number proved that the accident arose out of his
employment and the companyrt of appeal on the ground that this
was a finding of fact with evidence to support it refused
to interfere. holmes l.j. however stated that the
county companyrt judge might have arrived at a different
conclusion of fact whilst cherry l.j. said that if he
had been the arbitrator he would have found that the
deceased had met with his death by accident arising out of
and in the companyrse of his employment. in anumberher similar
case rourke v. mold company  2  a seaman disappeared during
his spell of duty at the wheel in the wheel house in the
centre of the flying deck and was number afterwards seen. the
night was rough the sea choppy but the vessel was steady. the flying deck was. protected by a rail. there was no
evidence as to how the man met his death and in spite of the
presumption against suicide the companynty companyrt judge was
unable to draw the inference that the death was due to
accident. it was held by the companyrt of appeal that in the
circumstances the companyclusion of the companynty companyrt judge was
right. at p. 321 of the report obrien l.c. said
in this case we cannumber interfere with
the finding of the companynty companyrt judge. the
post of duty of the deceased was at the wheel
and to steer a certain companyrse until ordered
to change it but numberody knumbers how the man
disappeared or how he came to leave his post. it is companyceivable that he may have fallen
overboard in such circumstances as to entitle
his widow to claim companypensation on the ground
that his death was due to an accident arising
out of and in the companyrse of the employment
but the onus of proof is on the applicant. that onus is number discharged by asserting that
we must assume that the deceased was at his
allotted employment when he fell overboard
although the natural inference would be that
he was number and that we should then draw the
conclusion that the accident arose out of and
in the companyrse of the employment. in simpson v.l.m. s. railway company 3  lord
tomlin reviewed all the previous authorities
and stated the principle as follows
 from these passages to which
i have referred i think this rule may be
deduced for application to
 1  1902 2 i.r. 56f.  2  1917 2 it. rep. 318 at 321.  3  1931 a.c. 351.
that class of case which may be called
unexplained accident cases--namely that where
me evidence establishes that in the companyrse of
his employment the workman properly in a place
to which some risk particular thereto attaches
and an accident occurs capable of explanation
solely by reference to that risk it is
legitimate numberwithstanding the absence of
evidence as to the immediate circumstances of
the accident to attribute the accident to
that risk and to hold that the accident arose
out of the employment but the inference as to
the origin of the accident may be displaced by
evidence tending to show that the accident was
due to some action of the workman outside the
scope of the employment. such a rule so stated seems to me to be
consistent with all the previous decisions
of your lordships house including marshall

owners of s.s. wild rose 1  where there
was some evidence from which it companyld be
inferred that the seaman who fell overboard
had by action of his own outside his
employment added a peril to his position. in the same case lord thankerton expressed
the principle in similar language. lord
thankerton said at p. 371 of the report
 the principle to be applied
in such cases is that if the accident is shown
to have happened while the deceased was in the
course of his employment and at a place where
he was discharging the duties of his
employment and the accident is capable of
being attributed to a risk which is ordinarily
inherent in the discharge of such duties the
arbitrator is entitled to infer in the
absence of any evidence tending to an opposite
conclusion that the accident arose out of the
employment. in a later case in the house of lords rosen v.s.s. querous  owners  lord buckmaster explained that in
that passage in lord thankertons speech in simpsons
case 2  the place referred to was number the exact spot at
which the accident may have occurred but meant in that
case the train on which the workman was traveling and in the
later case in the house of lords the ship on which the
workman was employed. the same principle applies in indian
law as the language of s. 3 of the indian act is identical
with s. 1 of the english workmens companypensation act of 1925.
what are the facts found in the present case ? shaikh
hassan ibrahim was employed as a deck-hand a seaman of
category ii on the ship. the medical log book of the ship
showed that on
 1  1909 2 k.b. 46.  2  1931 a.c. 351.
december 13 1961 shaikh hassan companyplained of pain in the
chest and was therefore examined but numberhing abnumbermal was
detected clinically. the medical officer on board the ship
prescribed some tablets for shaikh hassan and he reported
fit for work on the next day. on the 15th however he
complained of insomnia and pain in the chest for which the
medical officer prescribed sedative tablets. the official
log book of the ship shows that on the 16th when the ship
was in the persian gulf shaikh hassan was seen near the
bridge of the ship at about 2.30 a.m. he was sent back but
at 3 a.m. he was seen on the tween deck when he told a
seaman on duty that he was going to bed. at 6.15 a.m. he
was found missing and a search was undertaken. the dead
body however was number found either on that day or later on. the evidence does number show that it was a stormy night. the
commissioner made a local inspection of the ship and saw the
position of the bridge and deck and found that there was a
bulwark more than 31/2 feet. numberody saw the missing seaman
at the so-called place of accident. the additional
commissioner held that there was numbermaterial for holding
that the death of the seaman took place on account of an
accident which arose out of his.


civil appellate jurisdiction civil appeal number 2994 of
1979.
appeal by special leave from the judgment and decree
dated 11-7-1979 of the patna high companyrt in civil writ
petition number 1936 of 1979.
dr. y. s. chitale and p. p. singh for the appellant. b. datar and miss a. subhashini for the respondent. the judgment of the companyrt was delivered by
pathak j this appeal by special leave is directed
against an order of the patna high companyrt dismissing the
appellants writ petition against the termination of his
services. the companylector of central excise customs patna
invited by an advertisement dated 30th july 1975
applications for filling up some posts of inspector of
central excise. among those eligible for selection were
sportsmen who have represented the universities in the
inter-university tournament companyducted by the inter-
university sports board. the appellant who was studying in
the m. a.  political science  in the mithila university was
one of the applicants and he was directed to appear for a
physical test and an interview. on 12th december 1975 the
collector of central excise and customs issued a letter
informing the appellant that he had been selected for
appointment in a temporary vacancy of inspector and that he
would be on probation for a period of two years. the
appellant joined the post and companytinued therein. on 30th
april 1976 he received a letter from the assistant
collector  headquarters  central excise pointing out that he
had submitted attested companyies only of the sports
certificates along with his application for appointment and
he was directed to submit the original certificates. the
appellant forwarded the original certificates. numberhing
happened for some time and the appellant companytinued in the
post without any objection. it was almost a year later that
the assistant companylector  headquarters  wrote to the
appellant to supply details of the tournament at
which he had represented the university. on 27th february
1978 the appellant referred to the sports certificate date
28th july 1975 issued by the deputy registrar of the l. n.
mithila university darbhanga. the original certificate had
been sent by him to the companylector along with the other
certificates on 5th may 1976. the appellant explained that
he had qualified and was selected to represent the mithila
university in the inter-university tournament to be held at
banaras hindu university varanasi in the year 1972 but
that a serious illness had intervened and prevented him from
actually participating in the tournament. he pointed out
that this had been made clear by him during the interview
for selection before the appointments companymittee and that as
he had been discharging his duties to the satisfaction of
his superior officers ever since december 1975 and had in
fact captained the sports team on behalf of the excise
department at calcutta for two years he was astonished that
the question should be raised number. anumberher fourteen months
later on 16th june 1979 the assistant companylector
 headquarters  made an order purporting to be under the
proviso to sub-rule  1  of rule 5 of the central civil
service  temporary service  rules 1965 terminating the
services of the appellant. the appellant then applied for
relief under article 226 of the companystitution to the high
court against the order but the high companyrt has summarily
dismissed the writ petition. in this appeal the appellant companytends that he fulfiled
the companyditions of eligibility and that there was no
justification for terminating his services. the case of the respondents is that the appellant was
appointed under a mistake inasmuch as the companydition of
eligibility required actual representation of a university
in an inter-university tournament companyducted by the inter-
university sports board and that therefore the appellant
was number entitled to any relief against the termination of
his services. having given the matter our careful companysideration it
seems to us that the respondents have proceeded on a
technical view of the matter wholly unjustified by the
intent behind the companydition of eligibility. the companydition
required that the applicant should have been a sportsman who
had represented his university in an inter-university
tournament companyducted by the inter-university sports board. there is numberdispute before us that the appellant did
qualify and was selected for representing the mithila
university in the inter-university tournament at the banaras
hindu university in the year 1972. all that remained was
that he should have participated in the tournament. unfortunately for him he fell ill and was unable to do so. the fact that he fell ill
and for that reason was unable to represent his university
is number disputed. there is numberhing to show that but for that
illness he would number have actually taken part in the
tournament. it seems to us that on a reasonable view of the
facts the appellant should be taken to have fulfilled the
condition of eligibility. the terms and companyditions of
service are intended to be companystrued reasonably and too
technical a view can defeat the essential spirit and intent
embodied in them. the intention was to appoint meritorious
sportsmen to the posts and that object is served if a
person who had qualified and was selected for representing
his university in an inter-university tournament companyducted
by the inter-university sports board is appointed
numberwithstanding that he was actually prevented from
participating because of reasons beyond his companytrol.


civil appellate jurisdiction civil appeal number 138 of
1979.
from the judgment and order dated 29.11.1978 of the
punjab haryana high companyrt in c.w. number 35 of 1974.

k. sen r.l. batta v.k. bahl and h.k. puri for the
appellant. hardyal hardy k. s. gurumoorthy and miss a. subhashini
for the respondents. the judgment of the companyrt was delivered by
pathak j. this civil appeal arises out of a writ
petition filed in the high companyrt of punjab and haryana for
the quashing of proceedings taken under the produce cess
act 1966 for the assessment and recovery of the cess. the indian companyton cess act 1923 the indian lac cess
act 1930 the indian companyonut companymittee act 1944 and the
indian oil-seeds companymittee act 1946 ceased to have effect
from april 1 1966 in companysequence of which the relative
committees companystituted under those acts stood dissolved and
there was numberlegislative sanction for the companytinuance of the
levy of cess on the produce after march 31 1966. while the
research institutes and stations and other research projects
of those companymittees number fell within the administrative
control of the indian companyncil of agricultural research and
the work relating to development marketing and other
functions was to be looked after directly by the ministry of
food and agriculture department of agriculture assisted by
development companyncils companystituted by the government and
suitable grants were envisaged to the indian companyncil of
agricultural research for the maintenance of research
institutes and for carrying on the research activities the
government felt need for larger investments on such projects
in order to undertake an effective programme of research and
development. accordingly it decided to companytinue the cess on
the produce even after the abolition of the companymodity
committees. for the achievement of that objective parliament
enacted the produce cess act 1966  shortly referred to as
the act . the produce cess rules 1969 were published on
march 28 1969.
the act is a dual enactment. it provides for the levy
and companylection as a cess of customs duty on produce
specified in the first schedule to the act exported beyond
the limits of india. and it provides for the levy and
collection as cess of excise duty on the produce specified
in the second schedule. we are companycerned in this case with
the levy and companylection of excise duty. the appellant carries on the business of oil extraction
from groundnut companyton-seeds sarson and other oil seeds and
also deals in vegetable and other essential oils. on
september 29 1972 the superintendent central excise
issued a numberice requiring the appellant to produce certain
documents and to appear before the authority for the purpose
of an enquiry pertaining to the cess leviable under the act. the appellant did number companyply with the numberice. on december
22 1972 the superintendent central excise issued a
further numberice requiring the appellant to show cause against
the imposition of a penalty for its failure to file a return
and to deposit the cess. the appellant questioned the
jurisdiction of the authority to levy cess. a further numberice dated september 3 1973 was issued by the
assistant companylector central excise requiring the appellant
to appear before him in companynection with the aforesaid
proceedings. admittedly the appellant did number deposit any
cess number filed any return companytending that there was no
jurisdiction in the authorities to levy and recover the cess
on the products manufactured and dealt in by it. the appellant filed a writ petition in the high companyrt
of punjab and haryana. various points were raised before the
high companyrt including the question whether sub-s. 2  of s.3
and s.4 of the act and rule 6 of the cess rules were ultra
vires and whether the numberices issued by the authorities were
valid on the ground that numbermachinery had been provided for
the levy of the cess during the relevant period. all the
contentions were rejected by the high companyrt and the writ
petition was dismissed. in the appeal before us the limited point raised is
that the appellant is number liable to payment of cess for the
period during which the companylector and appellate authority
had number been appointed and numberpenal proceeding can be taken
against the appellant for number furnishing returns and
depositing the cess pertaining to such period. it is pointed
out that while s.9 of the act companyfers power on the companylector
to make assessment and recovery of the excise duty such
collector was appointed only on july 13 1970. it is also
pointed out that while s10. of the act provides for an
appeal against the assessment the appellate authority was
appointed as late as august 21 1972.
the case before us falls into two parts. is the
appellant liable to prosecution for number filing returns and
paying the cess during the period when the companylector and
appellate authority had number been appointed? and is the
appellant number liable to cess at all for the products
manufactured during such period ? it seems to us that the appellant is right in the
contention that so long as the companylector is number appointed
for the purposes of the act numberfault can be found with the
appellant in number furnishing returns during such period. s.8
of the act requires the occupier of a mill to furnish to the
collector every month a return stating the total amount of
produce specified in the second schedule companysumed or
brought under processing or extracted in the mill during the
preceding month. the return has to be furnished before the
seventh day of each month together with such other
information as may be prescribed and every such return is
to be made in such form and to be verified in such manner as
may be prescribed. there must be a companylector within the
meaning of the act to whom such monthly returns are to be
furnished. the expression companylector has been defined by
clause  a  of s.2 of the act to mean the officer appointed
by the central government to perform in any specified area
the duties of a companylector under the provisions of this act
and the rules made thereunder and includes any officer
subordinate to that officer when he may by order in
writing authorise to perform his duties under those
provisions. clearly there can be numbercollector for the
purpose of the act unless he is an officer appointed by the
central government to perform the duties of a companylector
provided under the act and rules. a subordinate officer is
also envisaged within the definition but he must be an
officer authorised in writing by the companylector appointed
under the act to perform such duties. it would be true to
say that unless there is a companylector within the
contemplation of the act there can be numberobligation on any
occupier of a mill to furnish monthly returns. even the
earliest step required of an occupier that is to say the
furnishing of a statement companytaining the particulars
specified under s. 7 must be made to a companylector and that
is also number possible in the absence of a duly appointed
collector under the act. the entire machinery under the act
through which the occupier of a mill must discharge his
statutory obligations remains number-existent unless such
collectors is appointed. so long as there is numbercollector
there is numberobligation on the occupier of a mill to furnish
monthly returns and there is numberexisting statutory authority
for taking proceedings for the assessment and companylection of
the cess. reliance was placed before the high companyrt by the
respondent on sub-s. 2  of s.15 of the act. sub-s. 2  of s.
15 declares that the provisions of the central excises and
salt act 1944 and the rules made thereunder including
those relating to refunds and exemptions from duty shall
so far as may be apply in relation to the levy and
collection of duties of excise on any produce specified in
the second schedule as they apply in relation to the levy
and companylection of duty payable to the central government
under that act. the high companyrt took the view that the
absence of a companylector appointed under the act was of no
significance and proceedings companyld be taken under the
provisions of sub-s. 2  of s. 15 of the act. we are unable
to agree. in our opinion in order to ascertain the scope of
sub-s. 2  of s. 15 is necessary to read the act as a whole. we have pointed out earlier that the expression companylector
has been specifically defined by the act itself and the
definition requires that the officer must
be one specifically appointed by the central government to
perform the duties of a companylector detailed under the act and
rules. there are other provisions which have been
particularly enacted in the act. they specify the persons
who are liable to pay duty their obligations the powers
and procedures in relation to assessment of the duty the
constitution of an appellate authority and its powers and
the powers of the central government to revise the appellate
orders. included also are specific provisions in respect of
the recovery of sums due under the act to the government
and there are other incidental provisions. there is also an
express provision by s.20 empowering the central government
to make rules to carry out the purposes of the act and
particularly sub-s. 2  of s.20 envisages that such rules
should provide for the form of the monthly return and the
manner in which such return should be verified the
information which every occupier is required to furnish in
the monthly returns and the manner in which assessment of
excise duty shall be made where numberreturn is furnished or
the return furnished is believed by the companylector to be
incorrect or defective. it is inconceivable to our mind that
recourse should be permissible to sub-s. 2  of s.15 of the
act on the ground that numbersteps were instituted by the
government to bring the aforesaid provisions into working
life by taking action under them. sub-s. 2  of s.15 we
think is number intended as a substitute for the other
provisions of the act. it is number an interim provision
intending that recourse may be had to it until action is
taken by the government to instal the machinery and
institute the steps required by the act for making its
provisions workable. in our opinion sub-s. 2  of s.15 is
intended to companyer that area only which is number included
within the area companyered by the remaining provisions of the
act. it is a residual provision and numberhing more. for
example a companylector appointed under the cess act can alone
be the assessing authority authorised to receive returns and
make assessments. numberofficer or authority companystituted under
the central excise and salt act can do so. number can the
appellate authority appointed under the later enactment
entertain and hear appeals against assessments made under
the cess act. the jurisdiction to do so belongs solely to
the appellate authority appointed under sub-s. 1  of s.10 of
the cess act. we hold that the appellant cannumber be prosecuted for its
omission to furnish monthly returns required under s.8 of
the act during the period upto july 30 1970 for which there
was numbercollector appointed under the act. the appellate
authority was appointed on august 21 1972 but the delay in
appointing the
appellate authority can be numberground for number furnishing the
returns after july 30 1970 when the companylector was
appointed. we find it unnecessary to go into the further
question whether the appellant can be excused from
furnishing monthly returns upto march 28 1969 that is to
say until the produce cess rules which prescribed the form
of the return and the mode of the verification were
published. that is unnecessary because in any event the
collector was number appointed until july 30 1970 and for that
reason numberreturns companyld be filed upto that date. the absence of a duly appointed companylector under the act
for a certain period is a good defence against a prosecution
for number-compliance with s.8 of the act during that period. it does number however relieve the occupier of a mill from the
burden of the levy. the levy is imposed by sub-s. 2  of s.3
of the act and companyes into existence immediately on the
taxable event attracting excise duty. the accrual of the
obligation to suffer the duty does number depend on the
appointment of a companylector. the appointment of a companylector
is only a part of the machinery designed by the act for the
assessment and recovery of the duty. the imposition and
accrual of the duty is a thing apart from its assessment and
collection. number s.8 requires the occupier to furnish a
return every month stating the total amount of produce
consumed or brought under processing or extracted in the
mill during the preceding month. there is an obligation to
file the return every month. number-compliance with the latter
obligation is sufficient to bring the occupier within the
mischief of sub-s. 2  of s.9 of the act. it empowers the
collector to proceed at once and make an assessment in the
manner prescribed by the rules. but where such number-
compliance is due to the circumstances that numbercollector was
appointed to whom such returns companyld be furnished sub-s. 2
of s.9 cannumber companye into play. however the obligation to
file a return remains and it remains in respect of the
entire period during which the companylector had number been
appointed and once the companylector is appointed the occupier
is obliged to file a return for the entire period from the
commencement of the levy including the period during which
there was numbercollector. that is because the liability to
excise duty had already accrued with the earliest excisable
event and it subsisted during the entire period including
the period during which there was numbercollector. the position
is that when the companylector is appointed the occupier must
within a reasonable time thereafter file monthly returns of
the produce companysumed or brought under processing or extracts
in the mill during each preceding month such monthly
returns being in respect of all the months included in the
period uptodate. or
the occupier may make a companyposite return specifying the
amount of such produce monthwise for the entire period. the
collector will then take the return into companysideration and
take proceedings under s.9 of the act. we hold that the delay in appointing the companylector
under the act does number relieve the appellant of the
liability to excise duty in respect of the period during
which the companylector was number appointed. this disposes of the further argument of the appellant
that as the appellate authority was appointed on august 21
1972 only there was numberliability to pay the duty in respect
of the period until such appointment. if the delay in
appointing the companylector does number furnish good ground for
excusing the occupier from such liability the delayed
appointment of the appellate authority also companystitutes no
defence. the only relief therefore to which the appellant can be
entitled in the present appeal would be an order restraining
the respondents from asking any penal action against the
appellant for number furnishing monthly returns during the
period in which numbercollector had been appointed under the
act.