1. The petitioner is a licensed dealer in Gold. He deals in Gold Jewellery with his shop situated and licensed at Nellore. The petitioner does business in Gold Jewellery not only from his licensed premises at Nellore, but also from outside.
2. On 2-8-1982, he made out voucher No. 27 in respect of 495 pieces of Gold Jewellery weighing 1891.300 grams for sale outside his licensed premises of Nellore. An entry to that effect was made as required in form No. G.S. 12 accounts on 2-8-1982 itself. Two days thereafter, on 4-8-1982, he took out 66 pieces of Gold Jewellery weighing 412.300 grams under voucher form No. 28. Out of the above 561 pieces of gold jewellery weighing 2303.400 grams the petitioner sold 6 pieces of gold jewellery on 6-8-1982 at Kakinada under voucher No. 7 dated 6-8-1982 to a licensed dealer. When the petitioner with the remaining 555 pieces of gold jewellery weighing 2283.400 grams was found at Godavari Railway Station, the Superintendent, Central Excise, Preventive Division, Rajahmundry, the third respondent herein, seized those articles. The petitioner received a letter dated 9-8-1982 from the third respondent to the effect that the above gold jewellery was seized for the contravention of Section 55 of the Gold (Control) Act, 1968.
3. The present Writ Petition has been filed by the petitioner for the issue of a Writ of Mandamus declaring that the seizure of gold jewellery by the third respondent on 7-8-1982 was illegal and for the return of the same.
4. The third respondent in his counter while substantially admitting the facts stated by the petitioner in his Writ Petition justified the act of the seizure on two grounds. In paragraph No. 3 of the counter affidavit filed by the third respondent he contended that the petitioner was not authorised to carry on business as a gold dealer in any premises other than his licensed premises as it was shown to me that the petitioner was authorised to do business outside his licensed premises by an order passed by this Court, nothing more need be said about this ground. In addition to the above, he also stated that the petitioner who received on 2-8-1982 failed to strike daily balance. The petitioner was carrying along with him his G.S. 12 Account maintained in accordance with Rule 11(I) of the Gold Control Rules and that account showed the receipt of the above-mentioned 495 pieces of gold weighing 1891.300 grams under voucher No. 27 dated 2-8-1982, was shown in G.S. 12 Account, the balance column in G.S. 12 account was kept blank and the failure to strike the balance in G.S. 12 account amounted to a contravention of the Gold Control Act and its provisions. This is the justification which the third respondent has given for seizing the above-mentioned 495 pieces of gold. In justification of the seizure of the 66 pieces of gold weighing 412.300 grams the third respondent stated that that gold was not accounted for at all in G.S. 12 account. It was stated by the third respondent that as the petitioner had not maintained the G.S. 12 Account in accordance with the Gold Control Act and its provisions and particularly as he had not shown the balance as on 2-8-1982 in G.S. 12 account and had not made any entries whatsoever regarding the receipt of 66 pieces of gold ornaments on 4-8-1982 in G.S. 12 Account, he had come to a prima facie conclusion that the petitioner had contravened the provisions of the Gold Control Act and hence he seized the gold pieces.
5. Section 66 of the Gold Control Act authorises any Gold Control Officer to seize gold if he has reason to believe that in respect of gold any provisions of the Act has been, or is being or is attempted to be contravened. The question therefore that arises for consideration in this case is whether the third respondent has reasonable cause to believe that in respect of Gold seized by him the petitioner has been or is being or is attempting to contravene the provisions of the Gold Control Act.
6. So far as the 495 pieces of gold are concerned those items were entered in G.S. 12 Account. Voucher No. 27 dated 2-8-1982 shows that these 495 pieces of gold were accounted for. The only defect pointed out by the third respondent as justification for seizure of these ornaments was that the petitioner did not strike a balance in G.S. 12 Account. I consider that in the circumstances of this case that default alone on the part of the petitioner cannot furnish a reason to the third respondent to believe that the petitioner was guilty of any contravention of the Gold Control Act or Rules. I therefore hold that the seizure of 495 pieces was without justification.
7. But, I cannot say the same thing about the seizure of 66 pieces of gold. These pieces of gold received by the petitioner on 4-8-1982 were never accounted for G.S. 12 Account. I consider that circumstance as furnishing a sufficient reason to the third respondent to believe that the petitioner has contravened the provisions of the Gold Control Act in relation to the 66 pieces of gold. But in the circumstances of this case, I hold that the Gold Control Officer, cannot make that reasonable belief relating to 66 pieces of gold into a justification for seizing the entire gold. It is for these reasons, I have set aside on 24-9-1982 the order of seizure passed by the third respondent in so far as it related to 495 pieces of gold and confirmed the order of seizure in so far as it related to 66 pieces of gold.