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Panna Lal Vs. Union of India (Uoi) and ors. - Court Judgment

LegalCrystal Citation
SubjectCustoms
CourtRajasthan High Court
Decided On
Case NumberS.B. Civil Writ No. 1899 of 1980
Judge
Reported in1986(23)ELT103(Raj); 1982()WLN28
ActsConstitution of India - Article 226; Gold (Control) Act, 1968 - Sections 8, 8(1), 11, 16(5), 55, 55(3), 66, 71, 72, 73, 74, 79 and 82(3); Customs Act, 1962 - Sections 110
AppellantPanna Lal
RespondentUnion of India (Uoi) and ors.
Advocates: D.L. Maheshwari, Adv.
DispositionPetition dismissed
Cases Referred and Gem Palace v. Union of India
Excerpt:
.....silver released--held, provisions of customs act applied to silver, and gold was confiscated under gold control act;(b) gold control act, 1968 - section 8 and customs act, 1962--section 110--petitioner in possession of gold in contravention of see. 8--explanation that he got ornaments of his wife melted not believed by authorities--dalal not produced--refiners denying melting of ornaments--held, he contravened provisions of section 8;the explanation given by the petitioner was that he has brought the gold ornaments of his wife and the same were got melted by the refiners at ajmer and after such milting he was taking the gold which was seized from his possession. ah the three authorities, namely, the dsputy collector, the collector and the central government have conccurrently disbelieved..........hiranand mm jpr 9950 4 (two big and two small)2. m.c. jain ajmer fine gold 13. fine gold ajmer 9950 14. 9950 25. b.d. shankerlal k.l. ajmer 9950 1-----------------------------------------------------------------------total 9-----------------------------------------------------------------------the brief-case of the petitioner was also searched and 6.800 kg. of silver in small ingots bearing markings 'ajmer' saraf sangh kanta chhap asli chandi and refuse (keeti) of silver weighing 259.9 grams and 2 pieces of silver samples weighing 20 grams were also found besides the above-mentioned gold and silver. following documents were also recovered from the possession of the petitioner :-(1) two tickets of delux bus from ajmer to jodhpur no. 8 20875 and 820876. (2) one receipt no......
Judgment:

N.M. Kasliwal, J.

1. The facts leading to this writ petition under Article 226 of the Constitution of India in the matter of the Gold (Control) Act, 1968 are that on 30th May, 1974, in pursuance of an information, the Central Excise and Customs Preventive party checked Delux Bus No. RRL 294 going from Ajmer to Jodhpur at the octroi post, Ajmer-Beawar Road, Ajmer. The petitioner was travelling in the said bus and was spotted out. He was alighted from the bus and was searched in the presence of two independent withnesses which resulted into recovery of 9 pieces of primary gold weighing 463.430 Grams from the left pocket of pant of the petitioner. The details of the 9 pieces recovered from the petitioner are given as below :-

-----------------------------------------------------------------------S.No. Marking on the pieces Number of pieces-----------------------------------------------------------------------1. Hiranand MM JPR 9950 4 (two big and two small)2. M.C. Jain Ajmer fine gold 13. Fine Gold Ajmer 9950 14. 9950 25. B.D. Shankerlal K.L. Ajmer 9950 1-----------------------------------------------------------------------Total 9-----------------------------------------------------------------------

The brief-case of the petitioner was also searched and 6.800 kg. of silver in small ingots bearing markings 'Ajmer' Saraf Sangh Kanta Chhap Asli Chandi and Refuse (Keeti) of silver weighing 259.9 grams and 2 pieces of silver samples weighing 20 grams were also found besides the above-mentioned gold and silver. Following documents were also recovered from the possession of the petitioner :-

(1) Two tickets of Delux Bus from Ajmer to Jodhpur No. 8 20875 and 820876.

(2) One receipt No. 11195 dated 30th May. 1974 of Dharam Kanta Ajmer.

(3) One receipt No. 11215 dated 30th May, 1974 of Dharam Kanta Ajmer.

(4) One Bill No. 5777 of Hotel Ratan dated 30th May, 1974.

The raiding party seized the gold under Section 66 of the Gold (Control) Act and the silver under Section 110 of the Customs Act, 1962 on a reasonable belief that the gold in question was being carried, possessed/controlled by the petitioner Pannalal in contravention of Section 8 of the Gold (Control) Act and the silver was in the process of export out of India. The raiding party also seized the brief-case and the pant used as containers for the silver and gold. The documents mentioned above were also seized being relevant with the inquiry proceedings. A separate show cause notice for the silver was issued under the Customs Act, 1962 with which I am not concerned in the present writ petition. In the statement dated 30th May, 1974 recorded on the spot, the petitioner deposed that he brought his gold ornaments and got them melted through some agent at Ajmer from unknown Refiners. He was taking the melted gold packet to his village via Jodhpur. On this material, the Assistant Collector, Central Excise, Ajmer issued a notice to show cause to the petitioner on October 26, 1974 to explain to the Deputy Collector, Customs and Central Excise, Jaipur within 10 days of the receipt of the memorandum as to why the seized gold should not be confiscated under Section 71 of the Gold (Control) Act and why further penal action should not be taken against him under Section 74 of the Gold (Control) Act. Shri Hiranand, B.D. Shankerlal and M.C. Jain were also called upon to show cause as to why penal action should not be taken against them as they had refined the gold in contravention of Section 11 of the Gold (Control) Act)'?

2. In reply to the show cause notice the petitioner submitted that his wife had given him old gold ornaments which were got melted by him at Ajmer for the manufacture of new ornaments. The seized 9 pieces of gold were the outcome of the old ornaments owned by his wife and were in the process of manufacture of new ornaments. That no notice had been given to his wife who was the owner of those ornaments. The seized gold pieces were not liable to confiscation as the omission had been committed by him without her knowledge. He pleaded ignorance of law and requested for a lenient view. He also requested for personal hearing. As a follow-up action S/Shri Shankarlal, Damlal and M/s. Manmal Manakchand and Hiranand, all Refiners were also contacted by the Seizing Officers and their statements were also recorded. The above-mentioned refiners took the stand that the markings found on the pieces of gold had no connection with them. The gold was not refined by them and they had no concern with the gold seized from the petitioner. The learned Dy. Collector, Central Excise and Customs, Jaipur, after taking into consideration the entire record and the submissions made by the parties at the time of investigation, and replies to the show cause notice and submissions made during the course of personal hearing, held that the stand taken by the petitioner that he got melted the gold ornaments of his wife through a Dalai was false. According to the learned Dy. Collector, the petitioner failed to produce the alleged Dalai for obvious reasons. No man parts with his valuable to an unknown person and the petitioner possibly failed to produce the Dalai because of the fact that he did not get gold ornaments of his wife melted, but on the other hand, acquired and possessed the primary gold in question through the alleged Dalai who had not come forward having abetted the petitioner in acquiring of impugned primary gold other than by lawful means. The learned Deputy Collector also observed that Mohanlal, the father of the petitioner was a certified goldsmith with certificate No. 192 and it was specifically stated by the petitioner in his voluntary statement dated 30th May, 1974 that he had also been working with his father on a shop for the last 2-3-years in manufacturing gold and silver ornaments. Sub-section (3) of Section 55 of the Gold (Control) Act laid down that the goldsmith shall either own or have in his possession, custody or control any gold which had not been included in the statutory accounts. It was, therefore, required of them to have entered alleged 9 gold ornaments of the wife of the petitioner in the statutory Register (GS 13) but the same was not done obviously because the alleged gold ornaments were not carried from Sadri to Ajmer for melting. The impugned primary gold was acquired illicitly. The learned Dy. Collector also found that the defence had failed to adduce the evidence of the wife of the petitioner besides having failed to produce the Dalai of Ajmer who got the alleged gold ornaments melted. In the absence of this vital link having been proved by the defence, it was extremely difficult to place any reliance on the defence. He further observed that on the other hand, the weight of the seized gold was 463.430 grams which was quite near to the weight of 4 biscuits of gold i.e. 40 Tolas. There is very nominal difference of 2.17 grams which can be termed as melting loss. It can be said that the petitioner purchased 4 biscuits of gold weighing 40 Tolas and got them melted to destroy material evidence. In view of the above finding, the Dy. Collector held that the petitioner had contravened the provisions of Section 8(1) of the Gold Control Act. The seized gold was thus liable to confiscation under Section 71 and the petitioner was liable to penal action under Section 74. The Dy. Collector thus vide his order dated 20th July, 1976, Annexure 1, ordered absolute confiscation of 9 pieces of primary gold weighing 463.430 Grams under Section 71 of the Gold (Control Act) and also imposed a penalty of Rs. 1,000/- on the petitioner under Section 74 of the said Act. Shri Hiranand Shankerlal and Nanakchand were let off since no case had been established against any one of them.

3. The petitioner aggrieved against the order of the Dy. Collector (Annexure 1) filed an appeal which came up for consideration before the Collector, Central Excise, Jaipur. Before the Collector, the petitioner also filed affidavits of Smt. Foncy Kumari (wife of the petitioner) the alleged owner of the gold ornaments, Shri Mohanlal, father of the petitioner and also of Shri Kriparam, the brother-in-law of the petitioner.

4. The grounds urged by the petitioner before the learned Collector were that at the time of seizure itself, the petitioner had explained that his father was a certified goldsmith and the petitioner was assisting him and the gold involved represented the melted and refined gold out of the ornaments of his wife who was in the capacity of a customer and the Adjudicating Officer ignored these facts and without issuing notice to the real owner of the gold erroneously ordered confiscation of the impugned gold. The impugned gold was got refined by certain well known Refiners of Ajmer who embossed their marks on the said gold but they were let off and the petitioner was punished erroneously. The Department had failed to prove the case against the petitioner and the inference drawn by the Adjudicating Officer that the impugned gold represented the gold of 4 biscuits of foreign gold remained absolutely unsubstantiated. That for technical offence of not entering the gold in the Register, it is absolutely confiscation besides penalty of Rs. 1000/- was too harsh. The appeal was fixed at Jodhpur for personal hearing on 21-7-1978. No appearance was made from the side of the petitioner. Instead a written brief dated 29-7-1978 was received from the petitioner with a request that the case may be decided on the basis of arguments made in the memo of appeal. The learned Collector having carefully gone through the memo of appeal and the written submissions filed before him and the connected case records uphold the order of the Deputy Collector and dismissed the appeal by his order dated 15th November, 1978 (Annexure 2). The learned Collector also observed that the plea of the petitioner that these 9 pieces of primary gold were melted and refined at Ajmer out of old ornaments belonging to his wife had not been proved by any evidence. Such plea taken by the petitioner was not corroborated by any entry in the statutory record required to be maintained under Section 55 of the Gold (Control) Act although such a record was actually maintained by the father of the petitioner. (The Dalai, who according to the petitioner) had procured the primary gold was neither named nor produced by the petitioner. The Refiners S/Shri Hiranand, Shankerlal and M.C. Jain had categorically denied having melted and refined any gold ornaments produced by the petitioner. All these facts were sufficient to prove that the petitioner had been in possession of primary gold in contravention of Section 8(1) of the Gold (Control) Act. The plea of the petitioner that since no notice was given to the wife of the petitioner, the goods could not be confiscated was rejected for the reason that it had never been established that the petitioner had actually brought his wife's ornaments for melting and refining. The ownership of the wife of the petitioner was not established and, there fore, the primary gold was rightly treated as owned and possessed by the petitioner in whose possession it was found. The learned Collector in these circumstances observed that it was not necessary to labour the point whether the 9 pieces of primary gold were smuggled or not. As there was no dispute about the fact that 9 pieces of gold were primary gold and found in the possession of the petitioner, he had contravened Section 8(1) of the Gold (Control) Act. It was also observed that it was a common knowledge that while remanufacturing the ornaments no hall marks are embossed on the primary gold obtained in the process but on the other hand the same are generally put on primary gold illicitly obtained.

5. The petitioner then filed a revision before the Central Government. The Additional Secretary to the Government of India, Ministry of Defence, Department of Revenue vide order dated 31st March, 1980 (Annexure 3) also found no reason to interfere with the order in appeal passed by the Collector. He found that the order of the Collector was correct in law and based on facts. The learned Additional Secretary in his order (Annexure 3) also observed that both the persons namely, S/Shri Pannalal (petitioner) and Kriparam Soni stated that they did not know the name and address of the Dalai but they can identify them if he is brought before them. Therefore, it was not possible for the Seizing Officer to know who was the Dalai and there was no clue to trace him out. They, however, searched the premises of the persons whose seals were embossed on the gold seized pieces but they could not get anything incriminating each of these Refiners of silver denied having refined any gold or having received any ornaments through Shri Pannalal. The learned Additional Secretary also took into consideration that the writings on the reverse of the weighment slip of gold was as under :

34.4.4.25 34.4.4.255.6.2.25 5.6.2.25594 0-0-3.54------- --------23760 39-11-4160-12 29212-6-0-------304-6-0

The writing on the duplicate copy of Dharam Kanta Receipt of Gold.

34.4.4.25 ) 5940 )5-6-2.5 ) 4 ) A 0-0-3.5 ) X )_______ ) _______ )39-11-4.25 ) 23760 )) 159-5 ) B37-2 ) )) _______ )4 )Y 23500-11 )C_______148-8 ) 10-13 )_______ )159-5- ) Z

The learned Additional Secretary then observed as under :-

'The statement of S/Shri Pannalal and Kriparam were recorded at the time of seizure.

Government observe that writing on the back of Dharamkanta receipt is calculation for the value of the gold seized. 'X' above denotes the total weight of seized gold. 'Y' represents the value to be deducted from the value of 4 gold biscuits for arriving at the value of the seized gold. Z' represents the melting charges for reduction in purity of biscuit to that of seized gold. 'A'represents the value of 4 biscuits. 'B' represents the deduction made from the value of four biscuits for arriving at the value of seized gold. 'C' represents the value of seized gold. This account is not connected with silver. Thus charge is clearly established. The failure to the Dalai through whom the melting was done and the presumption raised by a reading of the writings in the paper the purity of gold near to 999 would strongly indicate to the smuggled nature. Thus, the order passed by the Collector is correct in law and based on facts. Government, therefore, see ho reason to interfere with the order-in-appeal passed by the Collector and reject the revision application accordingly.'

6. The petitioner in the aforesaid circumstances has filed the present writ petition and has prayed to quash the order Annexures 2 and 3 and to give a direction to the non-petitioners to release the gold seized from the petitioner.

7. It was contended by Mr. Maheshwari, learned counsel for the petition that though a similar explanation was given by the petitioner for the silver seized from the possession of the petitioner, but the silver has been released and the golds recovered from the possession of the petitioner has been confiscated without any valid reason. I, therefore, see no force in this contention. The provisions of the Customs Act applied with respect to the silver seized from the possession of the petitioner, while the gold has been confiscated under the provisions of the Gold (Control) Act. The petitioner has been found to be in possession of primary gold in contravention of Section 8 (1) of the Gold (Control) Act and it has nothing to do with the provisions of the Customs Act.

8. It was next contended that the Dy. Collector in his order Annexure 1 had found that the seized gold was 463.430 grams neither to the weight of 4 biscuits of gold i.e. 40 Tolas. There was very nominal difference of 2.17 grams which could be termed as melting loss. It is contended that the loss of 2.17 grams cannot be considered as a nominal loss and in any case such gold of the quantity of 2.17 grams must have been found in the possession of the petitioner. It is also submitted that there was nothing unnatural in not disclosing the name and identity of the Dalai as the petitioner was not knowing him and no adverse inference should have been drawn against the petitioner for not producing the Dalai. It is also argued that the Collector in his order Annexure 2 did not refer the finding of the Deputy Collector that the petitioner had purchased 4 biscuits of gold and got them melted to destroy material evidence. The Collector in this regard took the view that it was not necessary to labour the point whether the 9 pieces of primary gold were smuggled or not, inasmuch as there was no dispute about the fact that the 9 pieces of gold which were primary gold were found in the possession of the petitioner and, therefore, the petitioner had contravened Section 8(1) of the Gold (Control) Act. It is submitted that the Central Government subsequently again arrived to the conclusion that the petitioner had melted 4 biscuits. In these circumstances when the Collector had indirectly set aside the finding of the Deputy Collector it was incumbent upon the Central Government to have given a fresh notice to the petitioner if it wanted to revise the order on a fresh ground. It is also argued that the Central Government has placed reliance on certain writings on the reverse of weighment slip for which no opportunity was given to the petitioner to explain. Reliance is placed on Section 79 of the Gold (Control) Act under which no order of adjudication, of confiscation or penalty could be made unless the owner of the gold was given a notice in writing informing him of the grounds on which it was proposed to confiscate such gold or to impose a penalty. According to the learned counsel the petitioner has explained the writing on the weighment slip in paragraph 33 of the writ petition. Reliance is placed on Kishinchand Chellaram v. I.T. Commr., Bombay, A.I.R. 1980 SC 2117; W.M. Jain v. Assistant Collector, Central Excise, A.I.R. 1982 Bombay 1, Chaganraju v. State of A.P., A.I.R. 1980 SC 477 ; S.L. Kapoor v. Jagmohan, A.I.R. 1981 SC 136; Nirode Baran Banerjee v. Union of India and Anr., 1970 Unreported judgments Supreme Court 778 and Gem Palace v. Union of India, A.I.R. 1970 Raj. 225.

9. I see no force in any of the contentions raised by Mr. Maheshwari learned counsel for the petitioner. The show cause notice was given by the Assistant Collector on 26th October, 1974 under Section 79 in which it was clearly mentioned that the gold in question was being carried, possessed controlled by the petitioner in contravention of Section 8 of the Gold Control Act, 1968 and he was asked to show cause and explain to the Dy. Collector, Customs and Central Excise, Jaipur within 10 days as to why the seized gold should not be confiscated under Section 71 of the Gold Control Act, 1968 and why further penal action should not be taken against him under Section 74 abid. Thus, the main charge against the petitioner was that he was found in possession of primary gold in contravention of Section 8(1) of the Gold Control Act for which he was given a due notice. The explanation given by the petitioner was that he has brought the gold ornaments of his wife and the same were got melted by the Refineres at Ajmer and after such melting he was taking the gold which was seized from his possession. All the three authorities, namely, Dy. Collector, Collector and the Central Government have concurrently disbelieved such explanation given by the petitioner. The petitioner had not produced the Dalai, the Refiners whose names are embossed on the gold pieces, have clearly denied that they ever melted the gold ornaments and had no connection at all with the gold pieces found in the possession of the petition. It was not expected from the petitioner to have given such large quantity of gold ornaments to an unknown person i.e. Dalai whose name and identity they failed to disclose. In these circumstances, he clearly contravened Section 8(1) of the Gold (Control) Act. This Court in the exercise of its extraordinary jurisdiction under Article 226 of the Constitution of India does not sit as a Court of Appeal and cannot review the orders passed by the Authorities under the Gold (Control) Act. There was enough material before the authorities to take much view against the petitioner. It cannot be said that the orders passed by the Authorities are without jurisdiction or totally perverse or based on no evidence. The question of giving a fresh show cause notice by the Central Government under Section 79 does not arise. The notice had already been given by the Assistant Collector under Section 79 which clearly mentions that the petitioner had contravened Section 8 (1) of the Gold (Control) Act and it cannot be said that the petitioner was in any manner not knowing the case or has been prejudiced in his defence in any manner. The question whether he got the 9 pieces of gold melted from 4 biscuits of foreign gold is hardly material. The Central Government in its order has given as one of the additional reasons that the writings found on the back of the weighment slip also negatived the defence of the petitioner that he got the gold pieces by getting the ornaments of his wife melted. The charge against the petitioner was not that he got these gold pieces prepared out of the four gold biscuits. The main charge was that he was found in possession, custody or control of primary gold in contravention of Sub-section (1) of Section 8 of the Gold (Control) Act. As already observed above it lay within the competence of the authorities to accept or not to accept the explanation given by the petitioner. The explanation given by the petitioner that the had brought the ornaments of his wife for melling, having been disbelieved, there was a clear case of contravention of Section 8 of the Gold Control Act. I do not want to refer to any of the authorities cited by Mr. Maheshwari in detail as none of those cases have any relevence to the facts and circumstances of this case and the actual controversy, raised in this case. In Wadilal Mathuradas Jain's case (supra) the Division Bench of the Bombay High Court has itself observed :-

'The only obligation upon the Government of India while deciding the revisional order under clause Sub-section (b) of (3) of Section 82 is that if the order is to be varied, then the person against whom such order is being passed prejudicial to his interest has to be given a reasonable opportunity of making a representation and, if he so desires of being heard in his defence'.

In the present case, [admittedly the Central Government has not varied the orders passed by the Collector or the Dy. Collector and as such the question of giving any fresh opportunity to show cause does not arise.

10. It was also contended by Mr. Maheshwari that under Clause (b) of Sub-section (5) of Section 16 of the Gold (Control) Act there was no necessity to make a declaration in relation to any ornaments where the total weight possessed by an individual did not exceed 2,000 grams. It is submitted that as the total weight of 9 pieces of gold recovered from the possession of the petitioner was 463.430 grams, as such there was no necessity to make any declaration. I see no force in this contention. As this argument is based on the assumption that such gold pieces were prepared out of the melting of gold ornaments of the wife of the petitioner. Having once found and established by the non-petitioners that the gold pieces were not prepared out of the melting of gold ornaments belonging to the wife of the petitioner, the applicability of aforesaid provision does not arise.

11. It was also contended that under Section 73 of the Gold (Control) Act an option ought to have been given to the petitioner in lieu of confiscation. The petitioner was willing to par twice the value of the gold pieces in respect of which confiscation has been ordered. I see no force in this contention as well. Section 71 clearly lays down that any gold in respect of which any provision of this Act has been contravened, shall be liable to confiscation. Under Section 72, in case of confiscation of conveyances an option is bound to be given to pay in lieu of confiscation of the conveyances or any one, a fine not exceeding the value of the gold in relation to which the provision of this Act or any Rule or order made thereunder has been contravened. However, under Section 73 the officer adjudging it may subject to such conditions as may be specified in the order adjudging the confiscation given to the owner thereof an option to pay in lieu of confiscation such fine not exceeding twice the value of the thing in respect of which confiscation is authorised, as the said officer thinks fit. Firstly, such power in my opinion, is a discretionary one with the officer adjudging confiscation and in any case no such prayer was made by the petitioner either before the Collector or before the Central Government. The obvious reason in making such a request before this Court appears to be that the value of gold has gone higher than double the value which existed at the time of seizure in this case i.e. 30th May, 1974. No such prayer can thus be accepted under Article 226 of the Constitution of India before this Court, specially when the order of confiscation passed by the non-petitioners is held to be legal.

12. No other point was pressed by the learned counsel for the petitioner.

13. In the result I find no force in this writ petition and the same is dismissed summarily.


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