T.K. Basu, J.
1. In this application the petitioners Sumanlal Parekh and Ram Chandra Varma challenge a notice dated 24th April 1971. The opening paragraph of the notice is in the following terms:--
'Whereas, on the evidence indicated in the enclosed Sheets, there is reason to believe that you have contravened the provisions of the Gold Control Act. 1968, inasmuch as you acquired and had in your possession, custody or control, primary gold in the form of 98 pieces of semi-finished churis weighing 2,000 grammes valued at Rs. 38,000 (approx) in violation of Section 8(1) of the Gold (Control) Act, 1968.'
2. It may be mentioned at this stage that out of 98 pieces of churis which are mentioned in the paragraph indicated above 50 pieces form the subject-matter of the present application and 48 pieces form the subject-matter of another application being matter No. 397 of 1971 (Pankaj Parekh and Ors. v. Collector of Central Excise and Customs, West Bengal and Ors.).
3. According to the petitioner No. 1 he carries on business under the name and style of Messrs. Jai Hind Jewellers at No. 143. Cotton Street. Calcutta, and has been holding a licence granted under Section 27 of the Gold Control Act. 1968 (hereinafter referred to as the Act) authorising it to carry on business as dealer in gold ornaments and the licence has been renewed from time to time. On or about the 13th July. 1970. one Himatmal Shah of Bombay sent a demand draft of Rs. 20,000 through the Dena Bank of Bombay to Messrs. Jai Hind Jewellers for the purpose of purchasing some gold ornaments through the petitioner No 1. Acknowledgment receipt of the said demand draft for the sum of Rs. 20,000 was duly received by the said Himatmal Shah. Thereafter on the 2nd August 1970. the petitioner No. 1 went to Bombay and gave delivery of 50 pieces of gold churis weighing 1 kg. along with Gold Control Vouchers and bills for the same.
4. Some time in October 1970. the said Himatmal Shah returned those gold bangles to Messrs. Jai Hind Jewellers as the designs of the ornaments were not up to the satisfaction of his family. According to the petitioner, the said 50 pieces of gold bangles were sent through the insured postal parcel under receipt No. 900 dated 24th October 1970. through the General Post Office of Bombay to Messrs. Jai Hind Jewellers. Sri Himatmal Shah also sent alone with the said insured parcel a letter in Gujarathi language written to the petitioner No. 1 re-questing him to change the design of 50 pieces of bangles as shown by a out piece of sample made of bronze.
5. According to the petitioner on the 26th October 1970. the petitioner No. 2 went to Burrabazar Post Office to collect the said insured parcel. After he had collected the said parcel he was intercepted by the Customs Officers who wrongfully seized the said insured parcel containing 50 pieces of gold churi.
6. Although several contentions have been raised on behalf of the petitioner challenging the notice to show cause issued under Section 8 (1) of the Act. the principal challenge is on the basis that the authorities had no jurisdiction or power to initiate any proceeding under Section 8 (1) of the Act in respect of the articles which have been seized by them. In order to appreciate this contention it would be necessary to look at some of the relevant provisions of the Act.
7. T. Section 8 (1) of the Act under which the proceedings have been taken provides as follows:--
'8. (1) Save as otherwise provided in this Act no person shall-
(i) own or have in his possession, custody or control, or
(ii) acquire or agree to acquire the ownership, possession, custody or control of, or
(iii) buy, accept or otherwise receive or agree to buy, accept or otherwise receive any primary gold.'
It is clear from the above provisions that it contains a prohibition, save as otherwise provided in the Act against any person owning or having the possession, custody, control or agreeing to acquire or accept or otherwise receive 'primary gold'. In other words, the essential precondition for the operation of the provisions contained in Section 8 (1) of the Act must be that the article in question is primary gold.
8. The expression 'primary gold' has been defined in Section 2 (r) of the Act as follows:--
' 'primary gold' means gold in any unfinished or semi-finished form and includes ingots, bars, blocks, slabs, billets, shorts, pellets, rods, sheets, foils and wires.'
This definition of 'primary gold' as found in the Act may be read in conjunction with the definition of 'ornament' which is to be found in Section 2 (p) of the Act and is as follows:--
' 'Ornament' means a thing in a finished form, meant for personal adornment or for the adornment of any idol, deity or any other object of religious worship, made of, or manufactured from. gold, whether or not set with stones or gems (real or artificial), or with pearls real, cultured or imitation) or with all or any of them, and includes parts, pendants or broken pieces of ornament Explanation.--For the purposes of this Act. nothing made of gold, which resembles an ornament, shall be deemed to be an ornament unless the thing (having regard to its purity, size, weight, description or workmanship) is such as commonly used as ornament in any State or Union territory.'
9. On a construction of the scheme of the Act and having particular reference to the definition of 'primary gold' and 'ornament' which I have set out above, it seems to me that an essential pre-condition for assumption of jurisdiction under Section 8 (1) of the Act is that the article in question must be primary gold. It is undoubtedly for the Gold Control Authorities to decide that collateral question of fact, namely, whether the article in respect of which the proceedings are sought to be initiated is 'primary gold' or not within the meaning of the Act. It is only upon a correct finding of that collateral fact that the authorities can assume jurisdiction to invoke the provisions of Section 8 (1) of the Act for the purpose of initiation of proceeding thereunder. This fact as to whether the article in question is 'primary gold' or not is in my view, clearly a jurisdictional fact, that is to say, a collateral fact upon a correct finding of which the assumption of jurisdiction by the authorities under Section 8 (1) of the Act will depend. It is well settled that if the authorities assume jurisdiction on a wrong finding of the collateral fact, the Court in exercise of its high prerogative jurisdiction can correct that error. In other words, in examining the correctness of the finding of a jurisdictional fact the Court issuing a writ of certiorari really acts as a Court of Appeal.
10. Reference may be made in this connection to a decision of the Supreme Court which was referred to by Mr. Asoke Banerjee who appeared on behalf of the respondents. That is the decision of Raman and Raman Ltd. v. State of Madras, reported in : 1SCR256 . In that case it was held that there may be cases where the jurisdiction of an inferior tribunal may depend upon the fulfilment of some condition precedent or upon the existence of some particular fact. Such a fact is collateral to the actual matter which the inferior tribunal has to try, and the determination of whether it exists or not is logically and in sequence prior to the determination of the actual question which the Inferior tribunal has to try.
11. It was further held that in such a case, in certiorari proceedings a Court can enquire into the correctness of the decision of the inferior tribunal as to the collateral fact and may reverse that derision if it appears to it, on the materials before it, to be erroneous.
12. In cases where the fact in question is a part of the very issue which the inferior tribunal has to enquire into, a Court cannot issue a writ of certiorari although the inferior tribunal may have arrived at an erroneous conclusion with regard to it.
13. On the strength of this decision Mr. Banerjee sought to argue that the question whether the article which was the subject-matter of the proposed proceeding was 'primary gold' or not was not a collateral or jurisdictional fact but was a fact in issue. Consequently it was submitted that although the Customs Authorities might have come to a wrong conclusion on that fact in issue, the High Court should not interfere in exercise of its writ jurisdiction.
14. I am unable to accept this contention of Mr Banerjee. It seems to me that the facts in issue in the instant case would be whether the petitioner had contravened any provisions of the Act and if so what are the consequences thereof. That is the issue which the authorities propose to adjudicate in pursuance of the impugned notice. Before they can embark upon an enquiry into the fact in issue, as I have already indicated above, the authorities will have to come to a decision on the collateral or the jurisdictional fact before they can invoke the provisions of Section 8 (1) of the Act. that the article in question is 'primary gold'. If that decision is erroneous, then, as has been laid down by the Supreme Court, this Court has ample power to correct that decision if on the materials before it, it is so satisfied.
15. That being the state of the law, let us now examine the facts of the present case. The first important fact is that in the document that has been, described as a 'seizure list' or 'inventory of the goods' seized under the column 'description of goods seized' the following expression is to be found: 'yellow metal said to be gold in form of 'Churi'.' Mr. Banerjee sought to argue that the expression 'said to be' should qualify not only the expression 'gold' but also the expression 'Churi'. In my view that is stretching the meaning of the expression 'said to be' a bit too far. I think what the seizing authority wanted to say by that endorsement was that the metal out of which 'Churis' were made was a yellow metal which was 'said to be cold' but the expression 'Churi' occurring in that column seems to me to be unqualified. It is also significant that although there is a statement in the seizure list that the articles have been seized on the reasonable belief that they are contraband, there is no statement anywhere in that list that the articles are in an unfinished or semi-finished state.
16. But the matter does not rest there. It appears that subsequent to seizure on the 12th April 1971, the Customs Authorities had the articles examined and inspected by two gentlemen of the names of B. Sirkar and J. Chandra who are both well-known jewellers of Calcutta. Both of them have submitted their reports copies whereof have been, by consent of parties, tendered and would form part of the records of this case. The report of B. Sirkar is in the following terms:--
'In obedience to your request. I have examined the churis seized relating to the case of M/s. Sumanlal Parekh. c/o Jai Hind Jewellery, Calcutta, today, the 12th April 1971. In your office in Customs House. Calcutta. I am of the opinion that the said churis are unfinished ornaments and are not commonly sold as such.'
It is significant that Mr Sirkar, although an expert in the field of manufacture of ornaments, does not give any particulars as to what is the extent of the lack of finish of these ornaments save for stating that they are unfinished. Apart from this one is completely in the dark about the contradiction between the two expressions 'churis' and 'unfinished'. In other words, if the articles concerned are churis which are a well-known form of ornament used, perhaps in most parts of the country, how can they be unfinished does not appear from the report. Further according to Mr. Sirkar. these 'churis' are not 'commonly sold as such'. He does not say that they are not sold at all in the market. The report in my view appears to be rather hesitant on this aspect of the matter.
17. Turning to the report of J. Chandra it is found to be more against the contention of the Customs Authorities. The report is in the following terms:--
'In reply to your request I examined the churis in your office at Customs House today, the 12th April, 1971. The churis produced before me appeared to be finished ornaments. I have seen such sort of churis to be used by the customers from Bihar. Though the churis are not highly finished, it is also in use with them who pay poor making charges.
As to the query that whether such unfinished ornaments of crude manufacture are sold anywhere in Calcutta. I am to say that I cannot name any such shop who deals in this design of ornaments.
To another query as to the circumstances under which he has seen such rough cast churis with the customers of Bihar. I stated that I have seen them wearing.'
Although the expression 'unfinished ornament' occurs in a single place in paragraph (sic) the report, the report, read as a whole gives me the definite impression that. According to Mr Chandra, these ornaments were finished ornaments as stated in the first paragraph of the Report Further he is of the view, that it is an ornament which is in use in the State of Bihar.
18. Apart from these materials there were no other materials before me on which I could come to the conclusion as to whether these articles were 'primary gold' within the meaning of the Act or 'ornaments' within the meaning thereof. Having regard to this rather unsatisfactory state of the documents and particularly having regard to the fact that the Reports obtained by the Customs Authorities from the experts do not appear to support the stand taken by them, I decided to undertake recourse to rather unusual practice of inspecting the articles themselves in the presence of the learned Counsel for the parties. The fifty pieces of these articles which were kept under a Customs seal were broken in my presence pursuant to my direction and I have had the advantage of looking at them. Having done so. I have no doubt in my mind that although the design is of a rather simple and crude nature, these articles are nothing but churis as they are commonly used in this country and are capable of being used as 'ornaments' within the meaning of the Act.
19. It may be mentioned at this stage that the degree of finish in the sense of polish or shine or the degree of intricacy of a design of an ornament may be capable of an almost infinite variation. But that does not. In my opinion, and I do not think it was seriously disputed on behalf of the respondents, take away the character of ornaments from an article in question. A bangle may have no design on it in a particular case, but by virtue of the absence of that design, it does not cease to be an ornament.
20. Looking at the scheme of the Act as a Whole it seems to me that what the Legislature intended was to prohibit acquisition of gold of various shapes and forms before it reached the stage of becoming an ornament. Once it becomes an ornament, the Act does not contain any provision with regard to it except the requirements of licensing the dealers. Mr. Banerjee for the respondents contended that there were suspicious features of this case. He submitted that although the goods were of the value of Rs. 20,000. the postal parcel was insured for a paltry sum of a few hundred rupees. He also submitted that there was no stamp on the articles as required by Section 55 of the Act According to him the real object of the transaction was to bring gold from Bombay to Calcutta in contravention of the provisions contained in the Act.
21. I must say I have no adequate materials before me to come to a conclusion as to what was the motive of the transaction. Some of Mr. Banerjee's suspicions may be well founded. Be that as it may. once the article in question ceases to be 'Primary gold' and becomes 'ornament' as I have already indicated, it would seem to me that the authorities under the Act who have no power or jurisdiction would invoke the provisions of Section 8 (1) of the Act as was sought to be done in the instant case. Consequently. the impugned notices must be held to be without jurisdiction and void.
22. This is sufficient to dispose of the application, but having regard to certain other points argued, I may refer to them briefly.
23. Mr. Ashutosh Law for the petitioner made a further submission with reference to the seizure list. He drew my attention to the provisions of Section 69 of the Act which provides that with regard to the search and seizure under the Act the provisions of Sections 102 and 103 of the Code of Criminal Procedure. 1898. shall apply in so far as they are applicable. My attention was drawn next to the provisions of Sections 102 and 103 of the Code of Criminal Procedure which, inter alia, provide that every seizure list must be signed by two witnesses. My attention was drawn to the copy of the seizure list in the brief, in which there are no signatures of any witnesses. Consequently it was contended that the seizure was in contravention of Section 69 of the Act. Mr. Banerjee drew my attention to the original seizure list from the file kept with the Customs Authorities. It is however found from the records that the original seizure list has been signed by two witnesses as required by law. It is unfortunate that in the copy supplied to the petitioner those two names do not appear. Consequently I must hold that this contention of Mr. Law is without any substance.
24. The last contention advanced on behalf of the petitioner was that the respondent No. 2 who is an Inspector of Central Excise and Customs was not duly authorised under the Gold (Control) Act to undertake the search and seizure and to initiate the present proceedings. Turning to Section 4 (4) of the Act it is found that the Administrator appointed by the Central Government may authorise such person as he thinks fit to exercise all or any of the powers exercisable by the Administrator under the Act except the powers mentioned in that sub-section.
25. Mr. Banerjee for the respondent produced before me a copy of a notification by which all Customs Officers up to the rank of Sub-Inspectors have been authorised to perform the duties under the Act by the Administrator. Their authorisation was, however, in 1962 under the Defence of India Rules. 1962. and not under the Act. Section 116 (2) of the Act. however, provides that anything done prior to the repeal of the Gold (Control) Act, 1965 and the Gold (Control) Ordinance, 1968. either under those statutory provisions or under Part XII-A of the Defence of India Rules, 1962. shall be deemed to have been done under the Act. In that view of the matter, this contention of Mr. Law also appears to me to be without any substance.
26. This disposes of all the contentions raised on behalf of the parties.
27. In the result, this application succeeds and the Rule is made absolute.
28. There will be a writ in the nature of mandamus directing the respondents to forthwith recall and cancel the show-cause notice dated the 24th April 1971 and forbear from giving effect thereto in any manner whatsoever.
29. There will be no order as tocosts.
30. Operation of this order will be stayed for a period of six weeks from date.
31. This order is to be drawn up expeditiously.