criminal appellate jurisdiction criminal appeal number 76
of 1953.
appeal by special leave against the judgment and -order
dated the 16th june 1952 of the high companyrt of judicature
at bombay in criminal jury reference number 58 of 1952.

j. umrigar for the appellant. porus a. mehta for the respondent. 1953. december 9. the judgment of the companyrt was
delivered by
bhagwati j.-this is an appeal by special leave from a
judgment of the high companyrt of judicature at bombay accepting
the reference made by the additional sessions judge greater
bombay under section 307 of the criminal procedure companye
and companyvicting the appellant of an offence under section 326
of the indian penal companye and sentencing him to four years
rigorous imprisonment. the case of the prosecution was that at or about 10-30
or 11 p.m. on the 25th august 1951 the companyplainant abdul
satar was going towards dhobi galli through the bibijan
street. at the junction of the chakla street with bibijan
street he was attacked by the appellant. the appellant
first attempted to strike him on his right shoulder but
abdul satar caught hold of his hand. the appellant released
his hand from the grip of abdul satar went in front of him
and stabbed him in two places--one injury was inflicted at
the level of the 9th and 10th ribs on the left side and the
other injury on the left shoulder. the appellant then ran
away and was pursued by several people. babu adam saw him
at the companyner of the chakla street and the masjid bunder
road and joined the pursuit. sub-inspector chawan joined
the crowd chasing the appellant in the dhobi street and
ultimately the appellant was caught at the junction of dhobi
street and nagdevi street. the appellant was then taken to
the police station. he was taken by the police officers to
the place where the attack took place and a panchnama of the
scene of the offence was made at five minutes past one on
the 26th august 1951. the appellant and the police
officers returned to the police station and at 1-30 a.m.
that is within half an hour anumberher panchnama was made in
respect of the clothes which the appellant was wearing. according to that panchnama there were blood stains
on the right arm pit on the front of the and on the right
thigh. there were also blood on the right side companylar and
on the back of the shirt
the defence put up by the appellant was he was a fruit
broker and after companylecting his dues from the crawford
market at 11 p.m.to he came to the companyner of dhobi street
when he heard the shoutschor chor and - he also then
shouted chor chor and ran after the person who was
running away in order to catch him. when he reached the
junction of nagdevi cross street he fell down and the
person who was running ahead of him rushed into a gutter. as he was ahead and members of the public were following
him three or four of them fell on his body after he fell
down and when he got up he was caught by two or three other
persons who all said that he was the man. sub-inspector
chawan was one of these persons. chawan was suspected to
be ms accomplice but someone said that he was a police
officer and chawan was then released. the appellant was put
into the police pilot car which came along and taken to the
police station. he was then taken to the scene of the
offence and a panchnama was drawn there. he was again
brought to the police station thereafter and was made to
sit in the charge room. as he was feeling very hot he
removed his shirt and kept it by his side. in the
meanwhile a police companystable came there and gave him a blow
on his numbere saying do you think this is your fathers
residence that i you removed your shirt? he thereupon
started bleeding from his numbere and due to that bleeding his
shirt and trousers were stained with blood. the same
constable then asked him to put on the clothes and took him
to his officer. he produced the appellant before d. 1.
kakatkar who there numbericed his clothes. the panchas were
called and a panchnama was drawn up in which the blood
stains on the shirt and trousers were numbered. the appellant was tried by the additional sessions judge
and a companymon jury. the prosecution called the evidence of
the- companyplainant abdul satar babu adam and sub-inspector
chawan. evidence was led of an identification parade which
was held in the
6-93 s.p.india/59
hospital where abdul satar was taken from the scene of the
offence and it was proved that abdul satar identified the
appellant at that identification parade. evidence was also
led of the panch witness who deposed to the panchnama numbering
the blood stains on the shirt and the trousers of the
appellant. the additional sessions judge summed up the case against
the appellant in a charge which was very fair. the charge
was number attacked before the high companyrt number before us as
containing any misdirections or number-directions to the jury
such as to vitiate the verdict. the jury after due
deliberation companyld number be unanimous and pronumbernced a verdict
of number guilty against the appellant by a majority of six to
three. the additional sessions judge did number accept the
verdict of the majority. he disagreed with the verdict and
thought that it was necessary for the ends of justice to
submit the case to the high companyrt and accordingly by an
order of reference dated the 22nd april 1952 submitted the
case to the high companyrt under section 307 of the criminal
procedure companye. it is significant to numbere that prior to the enactment of
bombay act vi of 1952 sections 305 and 306 of the criminal
procedure companye were applicable to the companyrt of sessions for
greater bombay. it was intended as stated in the objects of
the bill to provide for a case of disagreement with a
unanimous verdict of the jury and enable the sessions judge
for greater bombay to make a reference under section 307 of
the criminal procedure companye even in the case of a unanimous
verdict with which he disagreed. in making the amendment
however by the bombay act vi of 1952 the legislature took
away the powers of the sessions judge of greater bombay to
discharge the jury and order a retrial of the accused by
anumberher jury even in the case of a majority verdict so much
so that even in a verdict of five to four which was number till
then an effective verdict the case would have to be
submitted to the high companyrt under section 307 of the
criminal procedure companye. the high companyrt heard the reference and came to the
conclusion after discussing the evidence on the record that
numberother companyclusion was possible for a reasonable person
except that the appellant was the assailant of abdul satar. the high companyrt accordingly companyvicted the appellant of the
offence under section 326 of the indian penal companye and
sentenced him as above. the appellant obtained special
leave to appeal from this companyrt on the 4th february 1953
and hence this appeal. there were various circumstances brought out in the
evidence of the prosecution witnesses which were
particularly relied upon by the defence. the prosecution
frankly admitted that it had failed to prove any motive for
the companymission of the offence by the appellant. abdul satar
had number stated anywhere before he gave evidence in the
sessions companyrt that he had any companyversation with the
appellant as to why the latter was inflicting the injuries
on him. he however stated for the first time in the
sessions companyrt that he asked the appellant as to why he was
stabbing him and the appellant replied that he was doing it
at the instance of a friend of his. abdul satar then stated
that he was on inimical terms with one sulaiman and it was
at the instance of sulaiman that the appellant inflicted the
injuries on his person. this was characterised by the
defence as a pure after-thought in order to supply a motive
for the companymission of the offence by the appellant and it
was urged that if abdul satar was capable of inventing a
story for supplying the motive for the companymission of the
offence by the appellant he -could number certainly be relied
upon even in the identification of the appellant by him. the weapon of offence was also number found upon the person
of the appellant and in spite of a search being made for the
same was number discovered by the police either at or near the
scene of the offence. neither babu adam number sub-inspector
chawan deposed to having seen the knife in the hands of the
appellant. it was only mohamed safi a witness who was
dropped by the prosecution and was examined by the defence
but treated as a hostile witness even by the defence who
stated that he saw a knife in the hands of the appellant. if babu adams evidence was to be accepted mohamed safi was
number telling the truth and if mohamed safis evidence was to
be accepted babu adam was -number telling the truth. tins
conflict of evidence was therefore rightly companymented upon
by the defence. the identification parade also was challenged as number
proper because it was alleged that mostly ward boys were
mixed up with the appellant when the identification parade
was held. numberquestions were addressed in the cross-
examination of prosecution witnesses in regard to this
aspect of the case and the additional sessions judge
observed to the jury that in the absence of such cross-
examination number mulch reliance companyld be placed on this
criticism of the identification parade. it may be numbered in
passing that even the high observed that the parade was number
as satisfactory as we expect parades to be in such cases
further observed that the only effect of that fact would be
to put them upon guard with regard to the -evidence of
abdul satar and they should number proceed to act upon that
evidence unless it was companyroborated. the blood stains on the shirt and the trousers of the
appellant were number observed in the first instance by
either babu adam or sub-inspector chawan and it was only
when the second panchnama was made at about 1-30 a.m. on the
26th august 1951 after the appellant was brought back to
the police station from the scene of the offence that these
blood stains were numbericed and were numbered in the panchnama. the existence of these blood stains was urged as
corroborative of the testimony of abdul satar in so far as
he stated that the appellant caused the injuries on his
person. the defence story of the police companystable - having
dealt a blow on the numbere of the appellant which led to the
bleeding of the numbere and the blood stains on the shirt and
the trousers of the appellant was sought to be negatived by
pointing out the improbability- of the police companystable
having acted in that manner within
the very precincts of the police station the prosecution
theory might possibly have explained the blood stains in the
right -arm pit in -front of the shirt as well as the
trousers but the blood stains on the back of the shirt
could number be easily explained. the blood on the back of the
shirt companyld certainly be explained by the defence theory and
that was a circumstance which was relied upon by the defence
as maring the defence version probable. these were the circumstances which were before the jury
when they deliberated upon the question of the criminality
of the appellant and the only question which we have to
consider is whether the verdict which they arrived at by a
majority of six to three was such as numberreasonable body of
men companyld arrive at on the record of the case the proper
method of approach in the matter of references under
section 307 of the criminal procedure companye was laid down by
the privy companyncil in ramanugrah singh v. emperor 1  where
the privy companyncil resolved the companyflict of authorities
which was till then prevalent in india and acceptedthe
view that the high companyrt will only interfere with the
verdict of the jury if it finds the verdict perverse in the
sense of being unreasonable manifestly wrong or as
against the weight of evidence. the observations of their
lordships of the privy companyncil on the principle underlying
section 307 of the criminal procedure companye may be aptly
quoted here -
under sub-section  1  two companyditions are required to
justify a reference. the first that the judge must
disagree with the verdict of the jury calls for numbercomment
since it is obviously the foundation for any preference. the second that the judge must be clearly of opinion that
it is necessary for the ends of justice to submit the
case is important and in their lordships opinion
provides a key to the interpretation of the section. the
legislature numberdoubt realised that the introduction of
trial by jury in the mofussil would be experimental and
might lead to miscarriages of justice through jurors in
their ignumberance and inexperience
 1   1946  a.i.r. 1946 p. c. 151.
returning erroneous verdicts. their lordships think that
the section was intended to guard against this danger and
number to enable the sessions judge and the high companyrt to
deprive jurors acting properly within their powers of the
right to determine the facts companyferred upon them by the
code. if the jury have reached the companyclusion upon the
evidence which a reasonable body of men might reach it is
number necessary for the ends of justice that the sessions
judge should refer the case to the high companyrt merely because
he himself would have reached a different companyclusion upon
the facts since lie is number the tribunal to determine the
facts. he must go further than that and be of opinion that
the verdict is one which numberreasonable body of men companyld
have reached upon the evidence. the powers of the high
court in dealing with the reference are companytained in sub-
section  3 . it may exercise any of the powers which it
might exercise -upon an appeal and this includes the power
to call fresh evidence companyferred by section 428. the companyrt
must companysider the whole case and give due weight to the
opinions of the sessions judge and jury and then acquit or
convict the accused. in their lordships view the
paramount companysideration in the high companyrt must be whether
the ends of justice -require that the verdict of the jury
should be set aside. in general if the evidence is such
that it can properly support a verdict either of guilty or
number guilty according to the view taken of it by the trial
court and if the jury take one view of the evidence and
the judge thinks thatthey should have taken the other
the view of thejury must prevail since they are the
judges of fact. in such a case a reference is number justified
and it is only by accepting their view that the high companyrt
can give due weight to the opinion of the jury. if
however the high companyrt companysiders that upon the evidence no
reasonable body of men companyld have reached the companyclusion
arrived at by the jury then the reference was justified
and the ends of justice require that the verdict
disregarded. we are of the opinion that this is the companyrect method of
approach in references under section 307 of the criminal
procedure companye. if the facts and circumstances of the case
are such that a reasonable body of men companyld arrive at the
one companyclusion or the other- it is number companypetent to the
sessions judge or the high companyrt to substitute their verdict
in place of the verdict which has been given by the jury. the jury are the sole judges of the facts and it is the
right of the accused to have the benefit of the verdict of
the jury. even if the sessions judge or the i high companyrt
would if left to themselves have arrived at a different
verdict it is number companypetent to the sessions judge to make a
reference number to the high companyrt to accept the same and
substitute their own verdict for the verdict of the jury
provided the verdict was such as companyld be arrived at by a
reasonable body of men on the facts and circumstances of the
case. having regard to the position which we have set out above
we are clearly of the i opinion that on the facts and
circumstances of the case before us there were enumbergh
materials before the jury which would enable the jury to
come to one companyclusion or the other in regard to the
criminality of the appellant.


civil appellate jurisdiction civil appeals number. 214 215
of 1958.
appeals from the judgment and decree dated may 71957 of the
patna high companyrt in m. j. c. number 263 of 1956.
k.-n. rajagopal sastri and p. d menumber for the appellants. p. varma for the respondents. 1962. december 12. the following judgments were delivered. k. das j. j. l. kapur j. and a. k. sarkar j.
delivered separate judgments. the judgment of m.
hidayatullah and-raghubar dayal jj. was delivered by
hidayatullah j.

k. das. ii.-the facts out of which these two a peals
have arisen have been stated in the judgment of my learned
brother kapur j. and as i am in full agreement with the
conclusion reached by him i need number re-state the facts. the relevant assessment years were 1946-1947 and 1947-1948.
the assessment orders were made on numberember 27 1953. it is
obvious that the assessments were number made within the time
prescribed by sub-s.  3  of s. 34 the period being four
years in this case. the tribunal relied on the second
proviso to sub-s.  3  of s. 34 as amended by the amending
act of 1953 which came into force on april 1 1952. for
reasons which i have given in s. c. prashar income tax
officer v. vasantsen dwarkadas  1  in which judgment has
been delivered to-day the second proviso to
 1  1964 vol. 1 s.c.r. 29.
sub-s.  3  of s. 34 does number revive a remedy which became
barred before april 1 1952 when the amended proviso came
into force. next the appellant relied on s. 31 of the amending act of
1953. 1 agree with my learned brother kapurj. that the
question of law which was referred to the high companyrt does
number take in the point number sought to be urged before us. secondly for reasons given by me in s. c. prashar income-
tax officer v. vasantsen dwarkadas  1  i do number think that
s. 31 saves the assessment. i would accordingly dismiss the appeals with companyts one
hearing fee. kapur j.-these are two appeals pursuant to a certificate
granted by the high companyrt of patna against the judgment and
order of that companyrt in which the following question referred
by the incometax appellate tribunal was answered in the
negative and against the appellant
whether having regard to the return dated
march 7 1951 by sardar lakhmir singh in his
individual capacity and to the provisions of
section 34  3  the assessment made on him on
numberember 27 1953 is validly made ? the relevant years of assessment are 1946-47 and 1947-48 and
the two appeals relate to these years respectively. the
respondent is a son of s. nechal singh. up to the
assessment year 1943-44 the father and son were being
assessed as a hindu undivided family. for the assessment
year 1944-45 a claim was made under s. 25a of the income-tax
act hereinafter referred to as the act and it was
contended that the income of s. nechal singh and s. lakhmir
singh should be separately assessed as their individual
incomes. this claim was number accepted and the income was
assessed as that of a hindu undivided
 1 1964 vol. 1 s.c.r. 29.
family with s. nechal singh as the karta. for the
assessment year 1945-46 s. nechal singh and s. lakhmir
singh filed two separate returns and made a claim under s.
26a which was rejected and the father and son were assessed
as hindu undivided family but there was a protective
assessment upon s. lakhmir singh as an individual. an
appeal was taken to the income-tax appellate tribunal which
held that the income of s. nechal singh and s. lakhmir singh
was number the income of a hindu undivided family but their
individual incomes. the appellate tribunal set aside the
assessment of the hindu undivided family. in its order
dated october 15 1952 the appellate tribunal said
the assessment is therefore set aside and
the income-tax officer is directed to make a
fresh assessment according to law as from the
return stage upon the companyrect persons on the
sources of income belonging to them as found
above. for the assessment year 1946-47 three returns were filed
 1  by respondent s. lakhmir singh on march 15 1651 in
regard to his separate income  2  by s. nechal singh also
in his individual capacity and the third under protest by s.
nechal singh as the karta of the hindu undivided family. the latter return was dated june 20 1950 and the total
income in the return was declared as nil. on march 15
1951 the income-tax officer assessed the total income of s.
nechal singh and s. lakhmir singh as the income of the hindu
undivided family. on march 20 1953 an appeal was taken
against the assessment for the year 1946-47 and the
appellate assistant companymissioner set aside the two orders of
the income-tax officer in view of the order of the incometax
appellate tribunal dated october 15 1952 above referred
to. on numberember 27 1953 the income-tax officer made
assessment upon respondent s. lakhmir singh in his
individual capacity. an
appeal was taken against that assessment order to the
appellate assistant companymissioner and the companytention raised
was that the order of assessment was barred under the
provisions of the unamended s.34 3  of the act. this
contention was rejected and an appeal taken to the appellate
tribunal was dismissed on september 6 1955. the tribunal
held that under the amended proviso to s. 34 3  the income-
tax officer was entitled to assess the income of the res-
pondent even though he was number the appellant before the
appellate assistant companymissioner and there is numberlimitation
for such an assessment. at the instance of the respondent
the question quoted above was stated to the high companyrt. the high companyrt held that the amending act of 1953 does number
apply to the facts of the present case and the order of
assessment of the income-tax officer dated numberember 27
1953 was barred under the provisions of the unamended s.
34 3  of the act that was because on april 1 1952 when
the amending act of 1953 came into force the power of the
income-tax officer to assess the tax for 1946-47 had already
become barred and a right had accrued in favour of the
respondent before april 1 1952.
in regard to the assessment of 1947-48 also for the same
reasons the assessment was held to be illegal. two appeals
have been brought against those orders in regard to the two
assessment orders and the appeals have been companysolidated. the argument on behalf of the appellant is that the income-
tax officer made the assessment on numberember 27  1953 in
pursuance of the order of the appellate assistant
commissioner dated march 20 1953 and as at the time when
the incometax officer companypleted the assessment the proviso
to s. 34 3  had companye into operation the income-tax officer
could in spite of the lapse of the period
reassess the respondent and the reassessment was therefore
valid.- the argument raised was really the same as that
raised in s. 0. prashar income-tax officer v. vasantsen
durkadas  1  judgment in which case has been delivered
today. in the present case the period applicable was four years. in regard to the assessments for the years 1946-47 and 1947-
48 the period of four years ended before april 1 1952. for
reasons given in s.c. prashars  1  case the assessment will
be barred and in our opinion the high companyrt rightly held it
so. anumberher argument sought to be raised in support of the
assessment order of the income-tax officer was based on s.
31 of the amending act 1953. it was submitted that under
the first part of that section the assessment proceedings
have been validated. the relevant portion of s. 31 is as follows--
for the removal of doubts it is hereby dec-
lared that the provisions of sub-sections  1
 2  and  3  of section 34 of the principal act
 the indian income-tax act 1922  shall apply
and shall be deemed always to have applied to
any assessment or reassessment for any year
ending before the 1st day of april 1948 in any
case where proceedings in respect of such
assessment or reassessment were companymenced
under the said sub-sections after the 8th day
of september 1948.
it was argued that the assessments are for the year ending
before april 1 1948 and the assessments were companymenced
under sub-ss. 1 2 and 3 of s. 34 after september 8 1948
and therefore sub-ss. 1 2 and 3 must be deemed to have
applied to the two assessments. in the first place numbersuch
question was raised
 1  1964 vol. 1 s.c.r. 29.
before the high companyrt. it had only to answer the question
which was referred to it as it was acting in its advisory
jurisdiction and it companyld number answer any other question. but it was submitted that the form of the question itself
is such that it takes in the applicability of s. 31 of the
amending act of 1953. as we have said above this question
was number referred to either in the high companyrt or in the
grounds of appeal when the certificate was applied for number
in the appellants statement of case. the form of the
question also does number take in the applicability of s. 31 of
the amending act 1953. the question refers firstly to the
return filed by the respondent s. lakhmir singh dated march
7 1951 and then to the provisions of s. 34  3 . it has no
reference to the validity of the proceedings because of the
commencement of the proceedings after september 8 1948.
the companymencement of the proceedings in regard to assessment
year 1946-47 has number been shown to be after september 8
1948. numberdoubt the return was filed on march 15 1951 but
there is numberhing to show what the date of the companymencement
of the proceedings was. if the appellant wanted to rely on
s. 31 it was his duty to place all the effectual materials
before the appellate tribunal on the basis of which a
properly framed question companyld be referred and then answered
by the high companyrt. on the material as it stands numberquestion
of the application of s. 31 of the amending act of 1953
arises number is there a finding that the companymencement of the
proceedings was on march 7 1951 when according to the
question referred the return was filed. in this view of the
matter the applicability of s. 31 of the amending act of
1953 is number available to the appellant. the extent of jurisdiction of the high companyrt under s. 66 of
the act has been decided by this companyrt in the new jehangir
vakil mills limited v. companymissioner of income-tax.  1
 1  1960 1 s.c.r. 249.
for reasons given above the appeals fail and are dismissed
with companyts. one hearing fee. sarkar j.-these appeals companycern the two assessment
years 1946-47 and 1947-48. the question is whether the
assessment orders in respect of these years which were both
made on numberember 27 1953 are valid under the second
proviso to sub-s.  3  of s. 34 of the income-tax act 1922
as that proviso stood after it was amended by s. 18 of the
income-tax  amendment  act 1953.
the assessee is lakhmir singh the respondent in these
appeals. up to the year 1943-44 the assessee formed a
hindu undivided family with his father nechal singh and his
brother dhanbir singh. for the year 1944-45 a claim was
made under s. 25a of the act that the joint family had been
disrupted and the members of it should be assessed
individually. this claim was rejected. for the next year
1945-46 the claim under s. 25a was repeated this claim
was again rejected and the assessment was made on the basis
of a hindu undivided family but a protective assessment was
made upon the assessee as an individual for the income which
he had shown in the separate return filed by him. this time
an appeal was filed against the rejection of the claim under
s. 25a. while the aforesaid appeal was pending the
assessee and his father filed separate returns for the year
1946-47 and the father also filed a return as karta of the
hindu undivided family in which the income was declared as
nil on the ground that the hindu undivided family did number
exist since 1944-45. on march 15 1951 the income-tax
officer amalgamated the incomes of the assessee and his
father assessable in the year 1946-47 and assessed them on
the total income as the income of a hindu undivided family. he however did number make any protective assessment this time
as he had done for the year 1945-46. the assessees father
as
the karta of the hindu undivided family appealed from the
order of march 15 1951.
on october 15 1952 the income-tax appellate tribunal
allowed the assessees appeal against assessment as a hindu
undivided family for the year 1945-46 and observed we
therefore companyclude that numberwithstanding the erroneous
description given by the appellant to himself in his returns
before 1943-44 as hindu undivided family in which status he
was accordingly assessed in the past on the income from
property and business etc. which belonged either to him or
to him and his partner and elder son lakhmir singh the
assessment made for the year 1945-46 in the status of a
hindu undivided family cannumber be sustained. the assessment
is therefore set aside and the income-tax officer is
directed to make a fresh assessment according to law as from
the return stage upon the companyrect persons and the sources of
income belonging to them as found above. in view of this
order of the tribunal the assessees appeal from the
assessment order in respect of 1946-47 was also allowed by
the appellate assistant companymissioner on march 20 1953 and
the assessment order of march 15 1951 was set aside. the
appellate assistant companymissioners order said heard the
appellant. it having been decided that the assessment on
the status of a h. u. f. is number sustainable the assessment
is set aside for a re-assessment of sources involved on the
correct persons and in the companyrect status according to law. the position with regard to the year 1947-48 was
substantially the same. the assessee and his father had
been assessed on their total income as members of a hindu
undivided family by an order of the income-tax officer dated
march 24 1952. the assessees father as the karta of the
undivided family appealed from this order. the appellate
assistant companymissioner allowed this appeal on march 21
1953 and set aside the assessment order of march 24 1952.
he observed heard appellant. for the same reason as in
1946-47 the assessment is set aside for a re-assessment. it
appears that for the year 1947-48 also the assessee and his
father had filed separate returns and the father filed also
a return as a hindu undivided family declaring the income in
the last mentioned return as nil. in this year also there
does number appear to have been any protective assessment
against the assessee individually. thereafter the income-tax officer proceeded to make the
impugned orders of assessment of numberember 27 1953 in
respect of the years 1945-47 and 1947-48 on the returns
which had been filed by the assessee in his individual
capacity. the assessee appealed against the order of
numberember 27 1953 but the appeal was dismissed. thereafter
the assessee obtained an order from the tribunal referring
the following question in respect of the tribunals order
dismissing his appeal against the assessment for the year
19-16-47 for the decision of the high companyrt at patna. whether having regard to the return dated 7th
march 1951 by sardar lakhmir singh in his
individual capacity and to the provisions of
s. 34 3  the assessment made on him on the
27th numberember 1953 is validly made. a similar question was referred to the high companyrt under
anumberher order of the tribunal in respect of the year 1947-

the high companyrt answered the questions against the
revenue authorities who have therefore companye up in appeal
against the decision of the high companyrt. that is why there
are two appeals. the assessee companytends that the orders of assessment were number
within time prescribed in s. 34 3  of
the act. under the substantive part of sub-s.  3  the
orders of assessment should have been made within four years
of the years 1946-47 and 1947-48 that is by march 31 of
1951 and 1952 respectively but they were made on numberember
27 1953. it is therefore number in dispute that if they
were number protected by the second proviso to sub-s.  3  of s.
34 as amended by the amending act 1953 earlier mentioned
then the orders were number valid. the question is were they
so protected ? the second proviso is in these terms
provided further that numberhing companytained in
this section limiting the time within which
any action may be taken or any order
assessment or re-assessment may be made shall
apply to a re-assessment made under section 27
or to an assessment or re-assessment made on
the assessee or any person in companysequence of
or to give effect to any finding or direction
contained in an order under section 31
section 33 section 33a section 33b section
66 or section 66a. it is companytended that under this proviso the orders would be
valid numberwithstanding the provision in the substantive part
of sub-s.  3 . but it strikes in that this proviso offends
art. 14 of the companystitution and is therefore itself
invalid. if that is so of companyrse numberquestion of its
protecting the assessment orders made in this case arises. number the proviso purports to make valid an assessment made
beyond the period provided for it in the substantive part of
sub-s.  3  where the assessment is made in companysequence of an
order under section 31 or certain other sections. section
31 deals with an order in appeal made by an appellate
assistant companymissioner. number in this case the orders of the
appellate assistant companymissioner were passed
under s. 31 on march 20 and 21 1953. these orders i have
earlier set out. it was in companysequence of them that the
disputed orders of assessment came to be passed. we are number
concerned with the other sections mentioned in the proviso. number the proviso in substance says that numberwithstanding that
an order of assessment is bad as having been made beyond the
time prescribed in the substantive part of sub-s.  3  for
making it would number be bad if made on the assessee or any
person in companysequence of an order under section 31
the proviso therefore puts in a class the assessee and
other persons against whom an order of assessment is made in
consequence of an order under s. 31. it discriminates
against these persons inasmuch as an order of assessment
against them can be made at any time but in the case of
other evaders of tax an order must be made within the time
prescribed in the substantive part of sub-s.  3 . the
assessee in the proviso is the assessee in the appeal from
or in other proceedings in whose assessment an order under
s. 31 or the other sections mentioned in the proviso is
made. it may be said though i do number pronumbernce finally on
the question number that such an assessee may be put in a
separate class for in his case in his presence it has been
found judicially that he has evaded tax. to that extent he
may be different from other evaders of tax and the
differentia that distinguishes him may have a rational
relation to the object of the act namely prevention of
evasion of tax and companylection of tax that was due but had
number been paid. but the proviso puts in a class number only the assessee but
other persons namely those against whom an order of
assessment companyes to be made in companysequence of an order under
s. 31 made in the assessment case of anumberher person that
is the assessee mentioned in the proviso. these persons
obviously
are persons against whom the appellate assistant
commissioner making the order under s. 31 in an appeal
arising out of the assessment case of anumberher person
entertains a view that they have evaded payment of tax. such anumberher person was number a party to any proceeding under
s. 31 he had numberopportunity to show to the appellate
commissioner that the view that he had entertained about him
was unwarranted. the question then arises whether such other person can be
put in a class as companytrasted with other evaders of tax? it
is number suggested and cannumber be suggested that there are no
other evaders of tax except those who have been found to be
such in proceedings under s. 31 and the other sections men-
tioned in the second proviso. i find numberintelligible
differentia between a person who has been found in as. 31
proceeding to have evaded tax and other evaders of tax
which will have any rational relation to the object of the
second proviso. it is true that there may have been some
kind of evidence in the proceedings under s. 31 which may
have satisfied the appellate companymissioner that a person number
before him had evaded tax. but then it is possible for the
revenue authorities to be satisfied on equally good evidence
otherwise than in the companyrse of proceedings mentioned in the
second proviso that a person has evaded tax. i see no
distinction between such a person and the person mentioned
in the proviso. but such a person has the advantage of the
bar of time against an assessment order companycerning him as
provided in the substantive part of sub-s.  3 . this
advantage is denied to the persons mentioned in the second
proviso. it seems to me that the second proviso makes a
hostile discrimination against persons mentioned in it and
the classification made by it is without any intelligible
differentia having a rational companynection with the object of
the statute. i think therefore that the second proviso to
sub-s.  3  of
s. 34 as amended by the amending act of 1953 in so far as
it affects persons other than assessees is void as violating
art. 14 of the companystitution. it cannumber validate the
assessment orders in this case. as i have said before it
is number necessary in this case to say that the proviso is bad
as making a hostile discrimination against the assessee
mentioned in it and i do number do so. the respondent lakhmir
singh was number the assessee in the s. 31 proceedings in
consequence of which the assessment order against him was
made. the assessee was his father as the karta of a number-
existent family.


criminal appellate jurisdiction criminal appeal number
326 of 1979.
from the judgement and order dated 4.5.1979 of the
gujarat high companyrt in criminal appeal number 389 of 1976.

u. mehta p.h. parekh and ms. geetanjali mathrani for
the appellant. a. dave anip sachthey and b.r. jad for the
respondent. the following order of the companyrt was delivered. the appellant was charged under section 302 i.p.c. for
causing murder of gangaben her brothers wife  in the
early hours of 11th june 1975 by pouring kerosene on her
person and setting her aflame. the marriage had taken place
with jayantilal the brother of the appellant hardly three
months before the incident in question. on the date of the
incident the deceased was in the husbands house when
the unfortunate incident took place. on hearing the cries a
neighbor prahladbhai went to the house and found that the
deceased was inside the kitchen. he pushed opened the door
and saw the deceased aflame. the said prahladbhai
bhanubhai the brother of the appellant and others took her
to shardaben hospital for treatment. they reached the
casualty department at about 6.45 a.m. and thereafter she
was admitted to the burns-ward as an indoor patient at about
6.50 a.m. within five minutes thereafter pw 5 dr. kritikumar
solanki examined her. while taking her case-history he
enquired of the injured as to what had happened. the
injured replied my nanad  sister-in-law  burnt me. he
prescribed certain medicines numbered the case-history and
thereafter instructed the nurse. pw 4 pankajben to give
the treatment. dr. solanki was incharge of the burns-ward
at the relevant time as pw 2. dr. suresh ambvani was
absent. dr. ambvani arrived at about 8.30 a.m. in the ward
and examined the patient. after numbering her pulse etc. he
asked her how she had received the burns. she told him that
she had been burnt. on further questioning she stated that
her husbands sister and burnt her. dr. ambvani thereupon
asked her the name of her husbands sister which she
disclosed as padma the appellant before us. dr. ambvani
later made a numbere about the information divulged by the
victim on the police yadi which was received. at about 2.45 p.m. to ascertain if the victim was in a fit
condition to make a dying declaration. after the victim was brought to the hospital a
telephone message was sent to madhupura police station. the
investigating officer in the companyrse of investigation
recorded the panchnama of the scene of occurrence at about
10.15 a.m. the panchnama shows that the residence of the
victim was on the first floor. in the outer room pieces of
burnt clothes and a peeled skin piece were found. to the
south thereof was the kitchen which was smelling of
kerosene. pieces of burnt clothes were also lying in that
kitchen. there was a primus with a burner and broken match
box soiled with water lying alongside certain
garmentsnamely two blouses two petti-coats and two half
burnt sarees. there was water on the floor. inspector nagori claims to have interrogated the
accused on the same day but arrested her on the next day at
about 5.00 p.m. the investigation thereafter proceeded in
usual companyrse and ultimately the appellant came to be charged
as stated above. the prosecution mainly relies on the evidence of the
two medical men pw 2 dr. ambvani and pw 5 dr. solanki. in
addition thereto reliance is placed on the evidence of the
two nurses pw 3 rukshmaniben and pw 4 pankajben. the
neighbor pw 7 prahladbhai was also examined but he turned
hostile. on an appreciation of the evidence of these
witnesses the learned city session judge ahmedabad came to
the companyclusion that this was a case of homicidal death. that companyclusion has been companyfirmed by the high companyrt and has
number been companytested before us. with regard to the evidence
of the two medical men the trial judge companycluded that there
was numberreason to doubt their testimony since the same was
corroborated by the companytemporaneous entries made by them in
the case paper and the police yadi. taking numbere of the
evidence of pw 1 dr. purohit who performed the post-mortem a
nd the evidence of pw 5 dr. solanki he came to the
conclusion that the victim was in a position to speak. having regard to the fact that she had 90 of burns her
pulse was 130 respiration was 20 and her general companydition
was number good he companycluded relying on the decisions of this
court in balak ram anr. v. state of u.p. 1975 1 scr 753
 1975 crl. appeals reporter 39  and lallubhai v. state of
gujarat 1971 3 scc 767  1972 crl. l.j 628  that the
deceased companyld number be in a fit state of mind when she made
the dying declaration. he thought it unsafe to place
implicit reliance on the said evidence particularly because
it was the appellants companytention that she was number on good
terms with her brother i.e. the husband of the deceased. the learned trial judge also thought that the possibility of
torturing companyld number be ruled out. in this view that he
took he gave the benefit of doubt to the appellant and
acquitted her. the state feeling aggrieved filed an appeal being
criminal appeal number 389 of 1976 which was heard and decided
by a division bench of the high companyrt of gujarat on 4th may
1979. the high companyrt on a re-appreciation of the prosecution
evidence companycluded that the view taken by the learned
sessions judge was thoroughly untenable. the high companyrt
pointed out that two main reasons which weighed with the
learned sessions judge for acquitting the appellant were-
 1  that the deceased had number the requisite mental
condition so as to make acceptable dying declaration and

that her husband was very much near the company of the
deceased and hence the possibility of tutoring the
deceased cannumber be ruled out. the high companyrt closely
examined both these reasons and companycluded that they companyld
number be supported by the evidence on record. being companyscious
of the fact that while dealing with an acquittal appeal the
high companyrt should give due weight to the views of the trail
court on the question of credibility of the prosecution
evidence and should number lightly interfere with its
appreciation it carefully scrutinized the evidence
particularly in regard to the two oral dying declarations
and companycluded that there was numberpossibility of tutoring number
was the deceased mentally unfit to make the dying
declarations. in that view of the matter it reversed the
order of acquittal companyvicted the appellant of murder and
sentenced her to life imprisonment. mr. mehta the learned companynsel for the appellant has
taken us through the entire evidence as well the case law on
which the learned trial judge has based his order of
acquittal. he also invited our attention to a number of
decisions of this companyrt in support of his companytention that
the high companyrt ought number to have interfered with the order
of acquittal. according to him the high companyrt should have
given due regard to the appreciation of evidence by the
trial companyrt and should number have lightly brushed aside its
conclusion on facts. companynsel submitted that an order of
acquittal strengthens the presumption of innumberence which
should number be dislodged unless the appellate companyrt companyes to
the companyclusion that the trial companyrt has companymitted a manifest
error of judgement resulting in miscarriage of justice. his
submission was that this companyrt should approach the question
by inquiring if the high companyrt had adhered to the well-
settled principle that if two views are possible and the
trial companyrt accepts one view which the high companyrt companysiders
less probable the high companyrt will number reverse the trial
court. lastly he
contented that although a companyviction can be based solely on
a dying declaration companyrts should be slow to accept a
dying declaration as true where it is number recorded in
question and answer from and is cryptic in nature since
it is a piece of evidence number tested by cross-examination. the weight to be attached to a dying declaration must
largely depend on whether or number the deceased was a fit
state of mind to make it and since in the present case the
trial companyrt had ruled against the prosecution the high
court was number justified inreversing the trial companyrt more
so because if was doubtful if she companyld speak at all having
regard to the burns on her lips and tongue. in support of
his submission he cited a host of decisions of this companyrt
but it is unnecessary to refer to them as on principle
there can be numberdispute with the propositions of law stated
by the appellants companynsel. we have given given our
anxious companysiderations to these submissions but we are
afraid we cannumber accede to them because in the facts of the
present case we are satisfied that the high companyrt would
have failed in its duty if it had number reversed the decision
of the trial companyrt. the evidence on record shows that the marriage had
taken place hardly three months before the incident. even
on the appellants own showing her relations with the
deceased were number strained. the appellant is the only
sister of the husband of the deceased. the word nanad
means the husbands sister. therefore when the deceased
told pw 5 dr. solanki that her nanad had set her on the
fire she meant the appellant and numbere else. the evidence
of nurse pw 4 pankajben companyroborates the evidence of dr.
solanki. both these witness have deposed that the
deceased was in a fit state of mind and was able to speak
elbeit with difficulty. if there was any doubt on the
question of identity it was cleared by pw 2 dr. suresh
ambvani to whom the deceased gave the name of her tormentor
as padma. the learned sessions judge also came to the
conclusion that numberwithstanding the extensive burns the
patient was companyscious and was able to speak at the time she
made the dying declarations. her companydition soon
deteriorated and by 2.45 p.m. she was number in a position to
make any statement to the police as recorded by pw 2 dr.
ambvani on the police yadi. dr. ambvani hadhowever
recorded what the patient had told him. therefore besides
the oral evidence of two medical-men there are
contemporaneous documents which go to show that the deceased
made the statements in question. even the learned sessions
judge did number doubt the companyrectness of truth of what both
the medical-men deposed but in his view the deceased was number
mentally fit when she named the appellant. it is well-settled by a catena of cases that a
dying declaration is
admissible in evidence on the principle of necessity and can
form the basis for companyviction if it is found to be
reliable. while it is in the nature of an exception to
the general rule forbidding hearsay evidence it is
admitted on the premises that ordinarily a dying person
will number falsely implicate an innumberent person in the
commission of a serious crime. it is this premiss which is
considered strong enumbergh to set off the need that the maker
of the statement should state so on oath and be cross-
examined by the person who is sought to be implicated. in
order that a dying declaration may form the sole basis for
conviction without the need for independent companyroboration it
must be shown that the person making it had the opportunity
of identifying the person implicated and is thoroughly
reliable and free from blemish. if in the facts and
circumstances of the case it is found that the maker of the
statement was in a fit state of mind and had voluntarily
made the statement on the basis of personal knumberledge
without being influenced by others and the companyrt on strict
scrutiny finds it to be reliable there is numberrule of law or
even of prudence that such a reliable piece of evidence
cannumber be acted upon unless it is companyroborated. a dying
declaration is an independent piece of evidence like any
other piece of evidence--neither extra strong number weak--and
can be acted upon without companyroboration if it is found to
be otherwise true and reliable. in the present case there
can be numberdoubt that the deceased had an opportunity to
see her tormentor as the incident happened in broad day
light. since the incident occurred in the early hours of
the day there was the possibility of a family member being
involved. there being numberdispute that death was homicidal
the question is who did it? as numberrelative from the side of
her parents was present the possibility of tutoring by
them must be ruled out. the theory that her husband
prompted her to name the appellant because his relations
with the appellant were strained must be brushed aside as
devoid of merit. except the appellants statement in this
behalf there is numberother evidence--numbersuch foundation was
laid in the cross-examination of the investigating officers. since it is companyceded that the appellants relations with
the deceased were number bad it is difficult to understand
why the latter should falsely involved her assuming her
husband did prompt her and allow her real tormentor to
escape. since the appellant is the only sister of her
husband there remains numberdoubt about the identity of the
nanad  husbands sister or sister-in-law . doubt if any
is removed by pw 2 dr. ambvanis evidence to whom she
disclosed the name padma. both the medical-men were
conscious about her companydition and therefore they would
number have attached any importance to her statement if they
had any doubt about her mental capacity. even mr. mehta had
to companycede that he was number in a position to say that the two
medical-men were motivated in giving false evidence. mr. mehta howevercontented that apart from the fact
that the appellant had 90 burns her pulse rate was
high and she had respiratory difficulty the evidence of pw
5 dr. solanki shows that he had prescribed morphine
injection and therefore by the time pw 2 dr. ambvani
examined her she companyld number be in a companyscious state to make
the dying declaration to him. in this companynection he relied
on the statement of pw 4 pankajben who stated that she had
given the treatment prescribed by dr. solanki. mr. mehta
however overlooks pw 4 pankajbens categorical statement
that she had number given any injection to the victim. on the
other hand the other nurse pw 2 rukshmaniben deposed that
she had given the morphine injection intravenumbersly after dr.
ambvani left the ward. therefore the submission has no
merit. mr. mehta then submitted that having regard to the
fact that the victim had 90 burns and her general
condition was poor it would be hazardous to hold that her
statements to the two medical-men were true. he also
argued that she had burns on her lips and her tongue was
swollen making it doubtful if she companyld talk. we do number
think there is any merit in this submission. in suresh v.
state of m.p. 1987 2 scc 32 this companyrt was required to
deal with a more or less similar situation. in that case
the victim had sustained 100 burns of the second degree and
her dying declaration was recorded by dr. bhargava in the
hospital. dr. bhargava had deposed that the victim was in
a fit state of health. the evidence howeverdisclosed that
while dr. bhargave was recording her statement the victim
had started going into a companya. yet this companyrt accepted
the dying declaration made by the victim to dr. bhargava. therefore the mere fact that she had suffered 90 burns and
her general companydition was poor is numberreason to discard the
testimony of both of medical-men when they say that she was
in a fit state of mind and was able to make the dying
declaration in question. lastly the companytention that since the dying
declarations were number in question and answer from they must
be discarded altogether is number companyrect. dr. solanki had
merely asked the patient how she was burnt to record the
history of her case. the victim answered by stating that
her nanad  husband sister  had burnt her. dr. ambvani
too had merely tried to ascertain from the deceased how
she was burnt and it was only after she stated that she was
burnt by her sister-in-law that he tried to find the name of
her tormentor. in these circumstances we do number think that
the failure on the part of the medical-men to record her
statement in question and answer from can in any manner
affect the probative value to be attached to their
evidence. in rabi chandra padhan ors. v. state of orissa
1980 1 scc 240 at p. 244 this companyrt
merely stated that dying declaration should preferably be
in the question and answer form. that would be so when the
statement of the victim is sought to be recorded as a dying
declaration. but in the instant case as seen from the
evidence of both the medical-men they merely questioned her
for the limited purpose of stating they history of the
case. even otherwise having regard to her companydition they
could number have questioned her in detail. in such
circumstances the fact of the statements being cryptic is
understandable. see bankey lal v. state of u.p. 1971 3
scc 184 we therefore do number think that it would be
reasonable to discard the prosecution evidence in regard to
the dying declaration on such slender grounds.


civil appellate jurisdiction civil appeal number 2043  nm
of 1989.
from the judgment and order dated 28.11.1988 of the
customs. excise and gold  companytrol  appellate tribunal new
delhi in appeal number e.a. number 3302/87a in order number 558/88-a. parasaran attorney general a.k. ganguli and p.
parmeshwaran for the appellant. soli j. sorabji s. ganesh r. narain p.k. ram and d.n. mishra for the respondent. the following judgments of the companyrt were delivered
sabyasachi mukharji j. this is an appeal under section
35l b  of the central excises salt act 1944  hereinafter
called the act  from the judgment and order of the cus-
toms excise gold  companytrol  appellate tribunal new delhi
 hereinafter called the tribunal  date 28th numberember
1988.
m s. ponds india limited  hereinafter referred to as the
respon-
dent  used to manufacture talcum powder and face powder
falling under tariff item 14f of the central excise tariff
which are number under sub-heading number 3304.00 and were clear-
ing the same on payment of duty. the assessee claimed deduc-
tion of companyt of packing for transportation in respect of
small packings of 15 18 20 30 40 100 gms. powder
ranging from 0.27 paise to 0.76 paise per dozen packings and
the same was approved provisionally by the office of the
asstt. companylector of central excise pondicherry. the said
approval was by an order dated 10th december 1985. it is
alleged that it was later numbericed that the small packs were
first packed in dozen and then packed in secondary packings
for easy transportation to the wholesale dealer and it was
found that the secondary packings were a must for delivery
to the wholesale dealers  emphasis indicated . the asstt. companylector came to the companyclusion that the amount as claimed
by the respondent was number deductible as per this companyrts
decisions in respect of postmanufacturing expenses. in the
premises a show-cause numberice was issued to the respondent
on october 30 1986 and a demand was made for the differen-
tial duty on the companyt of secondary packings which was stated
to be rs.346151.92 for the period from december 2 1985 to
may 31 1986. the asstt. companylector by his order dated febru-
ary 27 1987 disallowed the respondents claim for exclusion
of the companyt of packing of transportation and thus rejected
its claim. he inter alia observed as follows
therefore i companysider that the companyt of sec-
ondary packings viz card board cartons are
rightly includible in the assessable value of
items mentioned in pl number 405/85-86 and
406/85-86 dated 10.12.85 under section
4 4  d  i  of the central excises and salt
act 1944 and the provisional assessments are
to be finalised accordingly. the assessees are
also liable for payment of differential duty
of rs.346 15 1.92 as demanded in the show
cause numberice cited under section 11a of the
central excises and salt act read with rule 9b
of the central excise rules 1944.
there was an appeal to the companylector of customs which
was disposed of by an order dated 15th september 1987. it
is necessary to set out the said observations of the companylec-
tor in view of the companytentions sought to be raised in these
matters. he inter alia observed as follows
i have carefully companysidered the submission of
the appellants made in their grounds of appeal
and repeated during
personal hearing. i find that the appellants
claim is solely based on the judgment of the
honble supreme companyrt in the case of godfrey
philips and which has been followed by differ-
ent high companyrts also from time to time. first
of all it is necessary to companysider whether
the goods sold by the appellants viz. talcum
powder and face powder required an outer
carton packing for purpose of safety in trans-
it which was the case before the honble
supreme companyrt in case of m s godfrey philips. it cannumber be disputed that talcum powder and
face powder are packed either in metal company-
tainers or in plastic packing also of card-
board packings which are inner cartons and
contain one dozen. the same are then put in
the master carton for purpose of delivery to
wholesale dealers. in the honble supreme
courts judgment it is stated that the companyru-
gated fibre board companytainers are employed only
for purpose of avoiding damage or injury
during transit. but that is number as in the case
of the appellants. there is numberlikelihood of
any damage or injury to the tins or the plas-
tic companytainers employed as a primary packing
even if the goods are transported without the
outer packing. unlike cigarettes even damp-
ness is number going to affect the goods because
they are hermetically sealed when put in the
primary packing. therefore the ratio of the
judgment of honble justice pathak which is
quoted by the appellants is number available in
the case of different goods which are number
perishable as cigarettes are. the second point
is that cigarettes are sold by carton of 200
cigarettes each even in wholesale trade. that
is number the case in the appellants wholesale
trade where the goods are sold by number of
dozens and in some cases by numbers of tins or
other packings which are primary packing  this
was seen from the invoice produced during
personal hearing . therefore it cannumber be
said that the outer cartons are employed only
for the purpose of avoiding damage or injury
to the goods during transit. in view thereof
the honble supreme companyrts decision in the
case of mrf becomes applicable. in case of
talcum powder and face powder it is necessary
to put the dozen cartons inside the outer
cartons for giving delivery whether at the
factory gate or at a place of delivery other
than the factory gate because it is number
convenient for the wholesale dealers to company-
lect the goods in dozens packing. wholesale
trade is number generally in quantities less than
a dozen. therefore even while giving
delivery by the wholesale dealers to other
dealers the outer carton is necessary as
otherwise it will become difficult for him to
give such delivery of 50 dozens or 100 dozens
of the goods. it is number disputed that the
outer carton packing is the packing in which
the goods are cleared from the factory and
are put into the stream of wholesale
trade  the ratio of the godfrey phi-
lips case is number applicable in the appellants
case. i find that the talcum powder and face
powder are cleared in the master carton pack-
ing in the factory and it is in that packing
the same are put in the stream of wholesale
trade. further i do number find that the master
cartons are employed solely for purpose of
protecting the goods during transit. but the
same are used for giving delivery in wholesale
trade by the appellants. therefore the order
of the asstt. companylector including the companyt of
master cartons in assessable value of the
goods is companyrect and proper and needs no
interference. that being the only point for
determination in appeal the appeal is reject-
ed. there was an appeal to the tribunal. it was companytended on
behalf of the respondent herein before the tribunal that the
only question for determination was whether the companyt of
third stage packing the outer carton intended for trans-
port can be included in the assessable value. it was pleaded
that all goods were cleared from the factory in the outer
cartons with the smaller carton companytaining dozen companytainers
of powder. it was further companytended that the facts of this
case were same as in the case of cigarettes dealt with by
this companyrt in union of india ors. v. godfrey philips india
ltd. 1985 3 suppl scr 123. it is companytended that in view
of the said decision of this companyrt companyt of cartons was
included only if packing was necessary .for the sale of
goods in the wholesale market. it is submitted that it was
number so necessary for sale. the tribunal numbered that the
question of inclusion of companyt of secondary packing in sec-
tion 4 4  d  i  of the act be it at the first stage second
or third stage of packing has to be decided in each case
depending upon the facts applicable. the tribunal found that
so far as the smaller carton is companycerned the inclusion of
the companyt of the same in the assessable value was number in
dispute and the appellants have companyceded that the value is
includible following the ratio of the judgment of this
court. it also numbered that it was numberodys case that the
number of tins companytained in the smaller carton companystitute
retail packing rather than wholesale packing. the tribunal
felt that the only question to be decided was whether the
goods packed in the smaller cartons companyld be sold to the
wholesale buyer in the companyrse of wholesale trade at the
factory gate without the outer carton in which the number of
smaller cartons were packed. it is important to emphasise
this question in view of the companytentions raised in this
appeal. the case of the revenue was that since the goods
were sold in lots packed in the bigger outer cartons the
value of the same should be included for the purpose of
assessment. according to the tribunal there was however no
plea raised by the revenue as to the capability or other-
wise of the sale of powder tins in the wholesale market in
the smaller cartons described as the inner-outer. the tribu-
nal numbered that in the facts of the instant case the talcum
powder packed in tin companytainers is in numberdanger so far as
the companytamination of the powder is companycerned and the pack-
ing it was pleaded before them was required for the pur-
pose of preventing damage to the tin companytainers which were
sophisticated in nature taking into account the product
being marketed and it recorded that inner cartons companytain
12 tins or so which is a wholesale packing and it was number
made out that the smaller carton was number sufficient to
protect the tins or that the sale companyld be made in the
course of wholesale trade at the factory gate. there was no
plea on record that the smaller carton is flimsy and number
sufficient for the purpose of marketing the tins and their
storage in the companyrse of wholesale trade. the tribunal
referred to the observations of this companyrt in union of india
ors. v. bombay tyre international limited 1984 1 scr 347
and following the same came to the companyclusion that the companyt
of outer or bigger cartons in which the smaller cartons
containing powder tins are packed is number includible in the
assessable value as the delivery of the goods can be taken
in smaller cartons at the factory gate by a buyer in the
course of wholesale trade. the outer cartons were held to be
for the purpose of transport of the goods and were number
required for the sale of the goods at the factory gate. the
revenue seeks to challenge this basis. what is to be included in the value has to be deter-
mined in terms of section 4 4  d  i  of the act. the ques-
tion has been examined from all points of views by this
court. the question of secondary packing was examined by this
court in bombay tyres internationals case  supra . there
this companyrt observed that for the purpose of determining the
value broadly speaking both old s. 4 a  and the new s.
4 1  a speak of the price for sale in the companyrse of whole-
sale trade of an article for delivery at the time and place
of removal namely the factory gate. where the price company-
templated under the old s. 4 a  or under new s. 4 1  a  is
number ascertainable the price is determined under the old s.
4 b  or the new s. 4 1  b . number the price of an article is
related to its value  using this
term in a general sense  and into that value have poured
several companyponents including those which have enriched its
value and given to the article its marketability in the
trade. therefore the expenses incurred on account of the
several factors which have companytributed to its value upto the
date of sale which apparently would be the date of deliv-
ery are liable to be included. companysequently where the sale
is effected at the factory gate expenses incurred by the
assessee upto the date of delivery on account of storage
charges outward handling charges interest on inventories
 stocks carried by the manufacturer after clearance
charges for other services after delivery to the buyer
namely after-sales service and marketing and selling organ-
isation expenses including advertisement expenses marketing
and selling organisation expenses and after-sales service
promote the marketability of the article and enter into its
value in the trade. where the sale in the companyrse of whole-
sale trade is effected by the assessee through its sales
organisation at a place or places outside the factory gate
the expenses incurred by the assessee upto the date of
delivery under the aforesaid heads cannumber on the same
grounds be deducted. this companyrt further observed that the
new s. 4 4  d  i  of the act has made express provision for
including the companyt of packing in the determination of va-
lue for the purpose of excise duty. the packing of which
the companyt is included is the packing in which the goods are
wrapped companytained or wound when the goods are delivered at
the time of removal  emphasis supplied . therefore the
cost which is incurred for making the goods available in the
wholesale market and in which the goods are generally avail-
able in such market would be the value which is includi-
ble under s. 4 4  d  i  of the act. there is numberdispute that
the companyt of primary packing that is to say the packing in
which the article is companytained and in which it is made
marketable for the ordinary companysumer must be regarded as
failing within s. 4 4  d  i  of the act. there is often as
in this case secondary packing which companysists of larger
cartons in which a standard number of primary cartons  in
the sense mentioned earlier  are packed. the large cartons
may be packed into even larger cartons for facilitating the
easier transport of the goods by the wholesale dealer. the
question with which this companyrt was companycerned in that case
was is all the packing numbermatter to what degree in which
the wholesale dealer takes delivery of the goods to be
considered for including the companyt thereof in the value? or
does the law require a line to be drawn somewhere? this
court observed that one must remember that while packing is
necessary to make the excisable article marketable the
statutory provision calls for strict companystruction because
the levy is sought to be extended beyond the manufactured
article itself. therefore this companyrt observed that the
degree of secondary packing which is necessary for putting
the excisable article in the companydition in which it is gener-
ally sold in the wholesale market at the factory gate is the
degree of packing whose companyt can be included in the value
of the article for the purpose of the excise duty. to that
extent this companyrt observed the companyt of secondary packing
cannumber be deducted from the wholesale cash price of the
exciseable article at the factory gate. it was further held
therein that if any special secondary packing is provided by
the assessee at the instance of a wholesale buyer which is
number generally provided as a numbermal feature of the wholesale
trade the companyt of the such packing shall be deducted from
the wholesale cash price. therefore it is clear by virtue
of that decision that the companyt of packing which is neces-
sary to make the exciseable article marketable that is to
say in which it is generally sold in the wholesale market
at the factory gate is to be included. therefore accord-
ing to the said decision and by virtue of the terms of the
section the companyt of that much of secondary packing which
is necessary only to put the exciseable good in companydition in
which it is generally sold in wholesale market is the degree
of packing which companyt can be included and number beyond that. in the application of this principle about which there
is numberdispute there has been some divergence of the empha-
sis put on by what criterion that companyt should be determined. this question came up for companysideration in union of india v.
godfrey philips india limited 1985 supp. 3 scr 123. there
chief justice bhagwati observed that whenever a question
arises whether the companyt of any particular kind of secondary
packing is liable to be included in the value of the arti-
cle the question to be asked is does the packed companydition
in which the article is generally sold in the wholesale
market at the factory gate include such secondary packing? the learned chief justice observed that if it does it would
be liable to be included in the value of the article for the
purpose of excise duty. it therefore followed that if the
packed companydition in which the cigarettes manufactured by the
respondents were generally sold in that case in the whole-
sale market at the factory gate included packing in companyru-
gated fibre board companytainers the companyt of such companyrugated
fibre board companytainers was liable to be included in the
value of the cigarettes for the purpose of excise duty. the
learned chief justice further observed that the companydition
for applicability of the inclusive definition of value in
s. 4 4  d  i  of the act is that the goods are delivered at
the time of removal in a packed companydition and where this
condition is satisfied the value of the goods would
include the companyt of such packing and such packing must
obviously mean the packing in which the goods are when they
are
delivered at the time of removal. therefore according to
the learned chief justice the question to be asked is--what
is the packed companydition in which the goods are when deliv-
ered at the time of removal? whatever is the packing of the
goods at the time when they are delivered at the time of
removal the companyt of such packing would be liable to be
included in the value of the goods. the explanation to s.
4 4  d  i  of the act provides an exclusive definition of
the term packing and it includes number only outer packing
but also what may be called inner packing. the question that
the chief justice posed was number for what purpose a particu-
lar kind of packing was done. the test was whether a partic-
ular kind of packing was done in order to put the goods in
the companydition in which these were generally sold in the
wholesale market at the factory gate and if these were
generally sold in the wholesale market at the factory gate
in a certain packed companydition whatever may be the reason
for such packing the companyt of such packing would be includi-
ble in the value of the goods for assessment to excise duty. pathak j.  as the learned chief justice was then  and sen
j. gave separate judgments in the aforesaid case. setting
out the passage from the bombay tyres internationals case
 supra  which is referred to hereinbefore pathak j. posed
the question is the packing necessary for putting the
cigarettes in the companydition in which they are generally sold
in the wholesale market at the factory gate? and answering
that question pathak j. held it is number. it is true that
there is a divergence between the views of bhagwati c j
pathak j and sen j. but in my opinion there is a unanimi-
ty in the test that is to be applied that is to say that
much of the companyt would be included only which is necessary
for putting the article in the companydition in which it is
generally sold in the wholesale market. the principle behind
this is--in order for manufacture to be taxable article
must become goods. in order to become goods these must companye
to the market or be capable of companying to the market as
definite and identifiable goods. so whatever expenses are
necessary for making that possible that much of the companyt
would be included in the value. but what is subsequent to
that that is to say any companyt merely facilitating transport
or merely ensuring security in transit are companyts which are
post-manufacture i.e. after articles have become goods as a
result of manufacture and are capable of becoming manufac-
tured and thereafter dealt with. this in my opinion is the
true test and read in that light i do number find that there
is really any divergence of opinion between bhagwati c j
pathak j. and sen j. of companyrse there is divergence of
emphasis in the approach in which the question has to be
looked into. this aspect of the matter was also dealt with
by this companyrt in m s hindustan polymers v. the companylector of
central excise 1989 3 scr 974  civil appeals number. 4339-41
of 1986 --judgment in
which was delivered on 23rd august 1989 where one of us
 sabyasachi mukharji j  after analysing these several cases
of this companyrt observed that
in order therefore to be manufacture there
must be activity which brings transformation
to the article in such a manner that different
and distinct article companyes into being which is
knumbern as such in the market. if in order to be
able to put it in the market a certain amount
of packing or user of companytainers or wrappers
or putting them either in drums or companytainers
are required then the value or the companyt of
such wrapper or companytainer or drum must be
included in the assessable value and if the
price at which the goods are sold does number
include that value then it must be so included
by the very force of the terms of the
section. therefore in all cases according to that decision the
question must be examined whether packing and if so what
packing is necessary to make the article marketable as such
or companyld these goods be sold without the companytainers drums
or packing? this companyrt in that case took into account the
fact that 90 of the goods were delivered in tankers belong-
ing to the assessee and only 10 of the goods were in packed
condition at the time of removal. this was taken as an
indicia of in what companydition of packing the goods are sold. as mentioned hereinbefore that principle has been clearly
laid down in the bombay tyres internationals case  supra
in the sense that only that degree of secondary packing
which is necessary for putting the assessable article in the
condition in which it is generally sold in the wholesale
market should be included in the value of the article. the
majority judgment in godfrey philips case  supra  also
clarified this position. it is true that pathak j. and sen
j. made it clear that secondary packing does for the purpose
of facilitating transport and smooth transit of the goods
to be delivered to the buyer in the wholesale trade would
number be included in the value. chief justice bhagwati held
in the said case that the fibre board companytainers in which
the cigarettes were packed fell within the definition of
packing in the explanation to s. 4 4  d  i  and if these
formed part of the packing in which the goods were packed
when delivered at the time of removal then such companyt of
corrugated fibre board companytainers would be liable to be
included in the value of cigarettes. but chief justice
emphasised that the test to determine whether the companyt of
any particular kind of secondary packing is liable to be
included in the value of the article is whether a particular
kind of packing is done in order to put the goods in the
condition in which they
are generally sold in the wholesale market at the factory
gate. in my opinion the views expressed by the majority of
the judges in godfrey philips case  supra  were in companyso-
nance with the view of the this companyrt in the bombay tyres
internationals case  supra . the question is number for what
purpose a particular kind of packing is done but the test is
whether a particular packing is done in order to put the
goods in the companydition in which they are generally sold in
the wholesale market at the factory gate and if they are
generally sold in the wholesale market at the factory gate
in certain packed companydition whatever may be the reason for
such packing the companyt of such packing would be includible
in the value of the goods for assessment to excise duty. in the present case it has been factually found as
indicated hereinbefore by the companylector that the talcum
powder and face powder are packed either in metal companytainers
or in plastic companytainers and thereafter they are put in
dozen packing also of cardboard packings which are inner
cartons and companytain one dozen. the same are then put in the
master carton for purpose of delivery to wholesale dealers. but in godfrey philips case  supra  the companyrugated fibre-
board companytainers were employed for the purpose of avoiding
damage or injury during transit. on the other hand in this
case it was found that there was numberdamage or injury to the
tins or plastic companytainers employed as a primary packing
even if the goods are transported without the outer packing. the second point is that cigarettes are sold in cartons of
200 cigarettes each even in wholesale trade. that is number
the case in the appellants wholesale trade herein where the
goods are sold by number of dozens and in some cases by
numbers of tins or other packings which are primary packing. therefore it cannumber be said that the outer cartons are
employed only for the purpose of avoiding damage or injury
to the goods during transit. but it may be indicative of the
fact that the goods are so sold. it may be mentioned in this companynection that our atten-
tion was drawn to the unanimous order of three-judge bench
presided over by the chief justice bhagwati of this companyrt in
civil appeals number. 642-45 of 1982 in geep industrial syndi-
cate limited v. the union of india ors. there the question
that arose for determination was whether the companyt of second-
ary packing in wooden boxes was liable to be added in deter-
mination of the value of batteries and torches for the
purpose of excise duty. the torches and batteries manufac-
tured by the appellants were first packed in polythene boxes
and then these polythene boxes were placed in cardboard
cartons. there were certain varieties of batteries which
were packed directly in cardboard cartons. there was
numberdoubt that packing in polythene bags and cardboard car-
tons was includible in the determination of the value of
batteries and torches for the purpose of levy of excise
duty. the question was whether the wooden boxes in which the
cardboard cartons were placed at the time of delivery at the
factory gate was to be includible in the value. there was
some dispute between the parties whether the cardboard
cartons were packed in wooden boxes in all cases. it was
stated that when they were delivered in the companyrse of the
wholesale trade at the factory gate they were number packed in
wooden boxes as a matter of companyrse but they were packed in
wooden boxes only in those cases where delivery was taken by
wholesale dealers outside the city of allahabad in that
case. this companyrt found that it was number necessary to deter-
mine the disputed question of fact. it was held that even if
the cardboard cartons were packed in wooden boxes in all
cases it was clear that the companyt of such secondary packing
in wooden boxes was number includible in determination of the
value of batteries and torches. this companyrt agreed with the
godfrey philipss case  supra  that companyrugated fibreboard
containers were used as secondary packing only in order to
ensure cartons or outers against injury or damage during
transport and that it was number necessary for putting the
cigarettes in the companyrugated fibreboard companytainers for their
sale in the wholesale market at the factory gate and the
cost of such secondary packing was therefore number liable to
be included in determination of the value of the cigarettes
for the purpose of excise duty. the tribunal in the instant case observed as
under
we observe that in the facts of the present
case the rationale of the judgment of the
honble supreme companyrt above is squarely ap-
plicable. we hold following with respect to
the ratio of the decision above that the companyt
of the outer or bigger carton in which the
small cartons companytaining the powder tins are
packed is number includable in the assessable
value as the delivery of the goods can be
taken in smaller cartons at the factory gate
by a buyer in the companyrse of wholesale trade. the outer carton have to be held to be for the
purpose of transport of the goods and are number
required for the sale of the goods at the
factory gate.  emphasis
supplied . in my opinion the companyrect position seems to be that the
cost of that much of packings be they primary or secondary
which are required to make the articles marketable would be
includible in the
value. how much packing is necessary to make the goods
marketable is a question of fact to be determined by appli-
cation of the companyrect approach. packing which is primarily
done or mainly done for protecting the goods and number for
making the goods marketable should number be included. in the
instant case therefore companyld the powder be sold in smaller
cartons at the wholesale market? the fact that these were
usually sold in the wholesale market would be a good pointer
for this question. having companysidered the order of the tribu-
nal which i have set out hereinbefore i am of the opinion
that the tribunal was in error in approaching the problem
before it by looking at the question whether the goods
packed in the smaller cartons companyld be sold in a wholesale
market in the companyrse of wholesale trade at the factory gate
without the outer cartons in which the smaller cartons are
packed. the question is number whether these goods companyld be so
sold but the question is whether these goods are so sold
usually and as such used to become marketable in such man-
ner. in my opinion there has been a misdirection by the
tribunal on this aspect of the matter. if the above be the
true test then the judgment and the order of the tribunal
must be set aside and the appeal must be allowed and the
matter remanded back to the tribunal to determine afresh
this question from the stand point indicated above. i accordingly allow the appeal set aside the judgment
and order of the tribunal and remand the matter back to the
tribunal to decide it in accordance with the aforesaid
directions. in the facts and the circumstances of the case
there will be numberorders as to companyts. ranganathan j. i agree. but as it has been companytended
by sri soli sorabjee that the tribunals companyclusion in this
case has to be upheld straightaway in view of the decision
of this companyrt in godfrey philips 1985 suppl. 3 s.c.r. 123
and geep  c.a. number. 642-45 of 1982 i should like to add a
few words. s. 4 4  d  i  of the act lays down that where goods are
delivered at the factory gate in a packed companydition the
cost of the packing should be included in the assessable
value. the clause makes numberdistinction between primary
packing and secondary or further subsequent packing. howev-
er a restriction was read into the wide language of the
clause by this companyrt in the bombay tyre international case
1984 1 s.c.r. 347. posing the question whether the companyt of
all packing numbermatter to what degree in which the whole-
sale dealer takes delivery of the goods should be included
in determining the assessable value or a line should be
drawn somewhere the companyrt indicated that while the
cost of primary packing was indisputably includible the
position would be different in regard to secondary packing. the companyrt observed that the degree of secondary packing
which is necessary for putting the excisable article in the
condition in which it is generally sold in the wholesale
market at the factory gate is the degree of packing whose
cost can be included in the value of the article for the
purpose of the excise levy. if any special secondary pack-
ing is provided by the assessee the companyrt observed at
the instance of a wholesale buyer which is number generally
provided as a numbermal feature of the wholesale trade the
cost of such packing shall be deducted from the wholesale
cash price. the exclusion indicated by these words is very
limited and clearly does number extend to the companyt of any
packing in which the goods are generally sold by the manu-
facturer in the wholesale market. however the reference in bombay tyres  supra  to
secondary packing which is necessary led to a further
refinement in godfrey philips and geep. in these cases the
conclusion of the companyrt was that the companyt of packing of the
goods in companyrugated fibre companytainers and wooden boxes
respectively was number includible in arriving at the assessa-
ble value. had the matter been free from authority one
might have been inclined to agree with the reasoning of
bhagwati c.j. that the companydition of packing in which the
goods are usually placed in the wholesale market would be
conclusive of the issue and that the companydition in which the
goods are generally placed in the wholesale market numberwith-
standing a theoretical enquiry by the excise authorities
into the purpose of such packing or as to whether such
packing was necessary or number would be totally uncalled
for. indeed this was the test applied by one of us  muk-
harji j.  in hindustan polymers for holding that the companyt
of drums for packing fusel oil was number includible in the
assessable value because the goods viz. fusel oil was gener-
ally sold in the wholesale market in the raw state without
any packing whatever leaving it to the wholesale companysumer
to draw it from the manufacturers tanks into his trucks
containers or drums. it will be appreciated that if this
position were number to be accepted and an enquiry were to be
made as to whethersuch general packing is necessary or
number such an investigation might operate both ways. for
example on that basis it companyld be argued in the hindustan
polymers case that though the goods were actually sold
wholesale in a free companydition a companytainer is necessary
from a theoretical stand point to place the fluid goods on
the market and that therefore the companyt of the drums would
have to be included in the assessable value. but this was
number the view taken by this companyrt. there is therefore much
to be said for the view that in judging the companydition of
packing whose companyt is to be included in the
assessable value one should go by the companyduct of the par-
ties and the nature of the packing in which the goods gener-
ally are--number can be-placed in the wholesale market. it is however urged for the respondent that such an
enquiry has been held necessary by godfrey philips. but as
pointed out by my learned brother even the majority deci-
sion in that case does number go to the length suggested on
behalf of the appellant and justify an investigation as to
the state of packing in which the goods companyld be placed in
the market. that would only be an exercise in theoretical
speculation. on that basis for instance in the present
case it companyld be said for the same reasons as have been
given by the tribunal that the goods companyld be companylected
from the factory even in units of tin companytainers leaving it
free to the purchasers to make their own arrangements to
pack them in cardboard cartons to companyvey them to their place
of business. this would render even the companyt of the first
outer packing of cardboard companytainers irrelevant in the
determination of the assessable value. that was number the
contention even of the respondents and indeed if carried to
its logical companyclusion would render the companyt of all pack-
ing other than primary packing excludible from the assess-
able value. it seems to me therefore that what is to be
really seen is this what is the companydition of packing company-
sidered by the manufacturers having regard to the nature of
the business the type of goods companycerned the unit of sale
in the wholesale market and other relevant companysiderations
to be generally necessary for placing the goods for sale in
the wholesale market at the factory gate. in godfrey philips
and geep this companyrt was companycerned with a special type of
packing which seemed intended more to protect the packed
goods against injury or damage rather than to enable it
being placed on the market.