Chittatosh Mookerjee, J.
1. The petitioners Nos. 1-4 claimed to be partners of the Firm, Messrs. Shyamlal Sen and Company. The Additional Collector of Customs by his order No, 127, dated July 28, 1967 (Annexure 'D' to the petition) has confiscated under Section 111(d) of the Customs Act, 1962, read with Rule 126-M of the Defence of India Rules, 1962, 142 pieces of gold coins (disc) weighing approximately 1656 grammes which were seized on May 21, 1965 at 7, Nalini Seth Road, Calcutta. The Additional Collector by the same order has imposed on Messrs. Shyamlal Sen and Company and its partners a penalty of Rs. 10,000/- each under Section 112 of the Customs Act, 1962 and Rs. 5,000/- on each of them under Rule 126-L (16) of the Defence of India Rules.
2. Mr. N. C. Banerjee, learned Advocate for the petitioners has submitted that the aforesaid order of the Additional Collector of Customs imposing penalties upon the petitioners is illegal, without jurisdiction and in violation of the principles of natural justice. In the first place, the learned Advocate for the petitioners has contended that a combined show cause notice in respect of the alleged offences under the Customs Act, 1962, Foreign Exchange Regulation Act, 1947 and the Defence of India Rules, 1962 was bad in law. I am unable to accept this submission. According to the said show cause notice, dated June- 3, 1965, issued by the Assistant Collector of Customs for Preventive (I), Customs House, Calcutta (vide Annexure 'A' to the petition) on information a party of Customs Officers led by the Assistant Collector of Customs, Preventive (I) had reached the premises No. 7, Nalini Seth Road, Calcutta 7 occupied by Messrs. Shyamlal Sen & Company at 7-45 p. m. on May 21, 1965 for search. In course of the search, 142 pieces of gold coins (disc) wrapped in a handkerchief were recovered and seized from inside the oven in the room on the 2nd floor. Rs. 24,900/- in Indian Currency found inside the Iron Safe placed in the guddy was also seized. Tarak Nath Sen, Debnath Sen, Jognath Sen and Mahinath Sen were found inside a room in the 1st floor of the premises. The partners could not produce any documentary evidence to show that the gold coins (disc) were duly declared before the Gold Control Authorities or that those had been entered in the prescribed returns. According to the above show cause notice importation of Gold without a valid permit was prohibited under Section 8(1) of the Foreign Exchange Regulation Act, 1947 and the Government of India Notifications mentioned in the said notice. Therefore, the seized gold was liable to confiscation under Clause (d) of Section 111 of the Customs Act, 1962. According to the said notice persons in possession or in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing or in any other manner dealing with any goods which they knew or have reason to believe, were liable to confiscation under Section 112 of the Customs Act, 1962. According to the said notice the above alleged acts were also in contravention of Rule 126-H & Rule 126-I of the Defence of India Rules, 1962 (Gold Control) (Part XIIA) as possession of gold not in-cluded in any return was illegal. Further, failure to make any declaration of gold other than ornament amounted to contravention of the Defence of India Rules.
3. Thus, according to the above show cause notice, same set of facts gave rise to the above charges against the petitioners under the aforesaid provisions of the Customs Act and the Defence of India Rules. In other words, the petitioners' aforesaid acts amounted to contravention of Section 111(d) and Section 112 of the Customs Act, 1962 and also of Rules 126-M and 126-L (16) of the Defence of India Rules, 1962. Under Rule 126-M of the Defence of India Rules (Gold Control), confiscation of any gold under Rule 126-L may be adjudged by the different officers of Customs or Central Excise depending on the value of the seized articles. Therefore, I find nothing illegal either in the show cause notice (Annexure 'A' to the petition) or in the adjudication proceeding merely because they were in respect of ;alleged contravention of the Customs Act and the Defence of India Rules (Gold Con-'trol). Therefore no prejudice was caused by conducting such combined proceeding to the petitioners and when the show cause notice gave sufficient particulars of the charges the petitioners had no difficulty in showing cause. In fact, the petitioners while showing cause did not make any grievance regarding the said joinder of charges.
4. A criminal case was started against the petitioners and one of their employees in respect of the aforesaid search and seizure at 7, Nalini Seth Road, Calcutta on May (sic), 1967 under Section 135(ii) of the Customs Act, 1962 and under Rule 126-P (2) (ii) of the Defence of India Rules, 1962. The learned Magistrate found the petitioners guilty and convicted them under the aforesaid provisions of the Customs Act and the Defence of India Rules and sentenced the firm to pay a fine of RS. 5,000/- on each of the two counts. The learned Magistrate also sentenced the partners the petitioners Nos. 14 before me to suffer S. I. for nine months each and pay a fine of Rs. 100/- each. They were further sentenced to pay a fine of Rs. 900/-.
5. S. K. Chakrabarti and Borooah, JJ. by their judgment, upheld the conviction of the appellants under the above provisions of the Customs Act. The learned Judges found that the accused persons themselves or someone with their knowledge or on their behalf or at their request or behest had placed those gold discs inside that oven so that they might not be found out by the customs people. The said gold discs were not covered by any declaration and the same were smuggled goods. The Division Bench, however, set aside the conviction and sentence of all the appellants under the Defence of India Rules. Their Lordships followed in this respect the decision of A. K. Das and K. K. Mitra, JJ. in Aravinda Mohan Sinha v. Prohlad Chandra Samanta, : AIR1970Cal437 . The Supreme Court in Aravinda Mohan Sinha v. Amulya Kumar Biswas, : 1974CriLJ885 has overruled the decision of A. K. Das and K. K. Mitra, JJ. in Aravinda Mohan Sinha v. Prohlad Chandra Samanta (Supra). The Supreme Court while restoring the order of the learned Magistrate convicting and sentencing the accused persons under Section 135 of the Customs Act as also under Rule 126-P of the Defence of India Rules at page 1822 paragraph 22 held that under the definition contained in Rule 126-A (c) of the Defence of India Rules, 1962 Part XII-A 'gold' means gold and it would be erroneous to say that a person was not liable to make under Rule 126-I a declaration as to gold in his possession and that Rule 126-P was not attracted merely because the gold of which such persons were in possession was smuggled gold and not legal gold. In view of the above decision of the Supreme Court in : 1974CriLJ885 (supra) I am unable to entertain the submission that the adjudication proceeding against the petitioners under the Defence of India Rules (Gold Control) in respect of the aforesaid gold coins (discs) was not maintainable on the ground that the same were smuggled goods. I accordingly held that the initiation of a combined proceeding against the petitioners under the two aforesaid provisions of law was not without jurisdiction.
6. I am also unable to accept the second submission of the learned Advocate for the petitioners that the impugned adjudication proceeding was in contravention of Section 122 of the Customs Act, 1962. Section 122 provides that a Collector of Customs or a Deputy Collector of Customs would be competent to adjudicate upon the confiscations and penalties without any limit. An Assistant Collector of Customs can adjudicate only when the value of the goods liable to confiscation does not exceed ten thousand rupees and where the penalty proposed to be imposed does not exceed two thousand rupees. A Gazetted Officer of Customs lower in rank than an Assistant Collector of Customs has power to adjudicate confiscation or penalty where the value of the goods does not exceed one thousand rupees and the penalty proposed to be imposed does not exceed two hundred rupees.
7. In the instant case, the show cause notice was issued by the Assistant Collector of Customs, Preventive (I), Calcutta and the Additional Collector of Customs passed the adjudication order confiscating the seized gold and also imposed a penalty of Rs. 10,000/- on each of the petitioners under Section 112 of the Customs Act and Rs. 5,000/- each on them under Rule 126-L (16) of the Defence of India Rules.
8. Under Section 2(8) of the Customs Act, 1962, the 'Collector of Customs' includes an Additional Collector of Customs. The learned Advocate for the petitioners did not contend before me that the Additional Collector of Customs had no jurisdiction to pass final orders in the above adjudication proceeding. According to the learned Advocate for the petitioners the show cause notice was a part of the adjudication proceeding, and, therefore, the Assistant Collector who was not competent in law to either confiscate the seized gold or to impose penalties of Rs. 10,000/- on each of them and the initiation of the adjudication was without jurisdiction and void ab initio. T have elaborately considered the point mentioned above in my judgment in Kumud Chandra Narandas Kapadia v. Union of India, C. R. No. 5486 (W) of 1969 and C. R. No. 1463(W) of 1970, dated October 4, 1972 (Cal). I find no reason to take any different view in the instant case. Therefore, it is unnecessary to again elaborately set out the points. The three requirements of Section 124 of the Customs Act, 1962 are really embodiment of the well-known principle of Audi Alteram Partem. The fulfilment of these requirements of natural justice has been statutorily provided. The Clause (a) of Section 124 in the first place provides for issue of a notice to appear before the Adjudicating Authority. The law requires that such notice must contain grounds on which it is proposed to confiscate the goods or to impose penalty. In other words, a notice under Section 124(a) is in the nature of a charge against a person proceeded under the said provision. In so far as the notice under Section 124(a) is akin to a summons of a civil suit it is partly ministerial and really serves the purpose of being an intimation of initiation of a proceeding without involving any judicial determination. The para. 15, Chap. III of the Adjudication Manual, 2nd Edition, Govt. of India, Ministry of Finance. Central Board of Excise and Customs, 1970 specifies the authority to issue show cause notices. The same contains observations that there was no legal objection to the issue of show cause notices by officers or other than the adjudicating authority. But a show cause notice issued by the Officer other than the adjudication authority must ask the parties to show cause direct to the adjudicating officer concerned. In the instant case, the Assistant Collector of Customs had asked the petitioner to show cause to the Additional Collector of Customs who had admittedly jurisdiction under Section 123 of the Customs Act, 1962.
9. Presumably the grounds mentioned in the notice under Section 124 are formulated by making prima facie inference. As a result of an investigation of Chapter XIII of the Customs Act. A charge once issued however becomes part of a quasi judicial proceeding. I fail to see how framing of such charge by an officer other than the adjudicating authority may prejudice a person who is asked to show cause. If on the other hand, the grounds contained in the show cause notice are formulated by an officer other than the adjudicating authority then the adjudicating authority may have no occasion to look into the grounds before conducting the adjudication proceeding. There will be less chance of bias or formation of any prior opinion by the adjudicating authority. When Section 124(b) does not specifically provide that the person who passes the adjudication order must issue the show cause notice, I am not prepared to accept the submission of the learned Advocate for the petitioners on this point.
10. In the above view, I hold that the show cause notice issued by the Assistant Collector was perfectly legal and valid. The proceeding against the petitioners was lawfully initiated. The learned Advocate for the petitioners also made a grievance that the Additional Collector of Customs by passing the ex parte order had acted in violation of the principles of natural justice. After the petitioners showed cause to the Additional Collector of Customs they had prayed for adjournment of adjudication proceeding till the disposal of the criminal case started against them over the aforesaid search and seizure at premises No. 7, Nalini Seth Road, Calcutta. Although parallel proceedings are not forbidden the Additional Collector in his discretion had stayed the adjudication proceeding till the completion of the criminal case against the petitioners. After the criminal case ended in petitioners' conviction, the Additional Collector of Customs had fixed June 14, 1967 for hearing of the adjudication proceeding. The petitioners did not appear, but had applied in writing that till the disposal of their appeal in the High Court against the conviction order, the adjudication proceeding be stayed. On June 19, 1967, the Additional Collector of Customs informed the petitioners that he was not prepared to slay the departmental proceeding and he fixed June 27, 1967 for hearing. The petitioners were warned that if they failed to turn up, the case would be decided ex parte, The petitioners in spite of the warning did not participate in the adjudication proceeding. In the facts of this case, I am unable to hold that the Additional Collector of Customs had acted arbitrarily or capriciously. He had given reasons for turning down the petitioners' prayer for further adjournment and he had fixed two dates, but the petitioners failed to appear. In these circumstances, the petitioners cannot make any complaint that the Additional Collector of Customs had acted in violation of principles of natural justice by ex parte concluding the case against them.
11. I also find no substance in the contention of the learned Advocate for the petitioners that the adjudication order was erroneous on the face of the record or that it was not based on materials on record. The petitioners did not dispute that 142 pieces of gold coins (disc) were seized during search of premises No. 7, Nalini Seth Road, Calcutta on May 21, 1965. But they denied that the said gold was found in their possession. In other words, they disclaimed the ownership and possession of the said gold coins (disc). Therefore, the petitioners did not advance any argument before me that the adjudication order for confiscation of the said gold did not make any point that they were not given a chance to pay a fine in lieu of such confiscation. Under Section 123 'where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be on the person from whose possession the goods were seized.' Thus, the burden of proof was upon the petitioners. The Additional Collector of Customs in his fairly lengthy order has found that the above pieces of gold coins (disc) were seized from the petitioners' possession and the same were smuggled goods. When the petitioners were found to be in possession of smuggled gold under Section 112 they were liable to be penalised for improper importation of the said smuggled goods. Once it was found that the petitioners were in possession of the smuggled gold they cannot question the penalty imposed under Section 112 as erroneous on the face of the record. The question whether the petitioners were in possession of any gold was one of fact and the petitioners did not file any appeal against any adjudication order, T cannot enter into the said question in the absence of any error of jurisdiction on the part of the adjudicating authority. The petitioners did not claim that they had made any return under Rule 126-F of the Defence of India Rules (Gold Control). Therefore, the penalty under Rule 126-L for their alleg-ed omission to do the said act cannot be deemed to be without jurisdiction.
12. The Additional Collector of Customs has imposed a penalty of Rs. 10,000/-each under Section 112 of the Customs Act on the partnership firm, Messrs. Shyamlal Sen & Company and also its partners Taraknath Sen, Jogenath Sen, Debnath Sen and Mahi-nath Sen. The Additional Collector of Customs has further imposed a penalty of Rupees 5,000/- each under Rule 126-L (16) of the Defence of India Rules upon the said firm and also its ahovenamed partners. In these adjudication proceedings Section 140 of the Customs Act has no manner of application. The said section itself states that if a person committing an offence under Chapter XVI is a company, every person who, at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of business of the company, as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. We need not set out the proviso to Sub-section (i). Therefore, the explanation (a) of Section 140 which provides that 'company' means a body corporate and includes a firm or other association of individuals cannot be applied in respect of the proceedings under Chapter XVI for confiscation of goods and conveyances and imposition of penalties.
13. The word 'partnership' has been defined in Section 4 of the Indian Partnership Act, 1932 as:
'.....the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.
Persons who have entered into partnership with one another are called individually 'partners' and collectively 'a firm', and the name under which their business is carried on is called the 'firm name'.'
14. The Judicial Committee of the Privy Council in Bhagwanji Morarji Goculdas v. Alembic Chemical Works Co. Ltd., AIR 1948 PC 100 while considering the submission that under the Indian Partnership Act, 1932 a firm is recognised as a personality apart from the persons constituting it so long as the business of the firm continued had observed that 'it is true that the Indian Partnership Act goes further than the English Partnership Act, 1890, in recognising that a firm may possess a personality distinct from the persons constituting it, the law in India in that respect being more in accordance with the law of Scotland, than with that of England. But the fact that a firm possesses a distinct personality does not involve that the personality continues unchanged so long as the business of the firm continues. The Indian Act, like the English Act, avoids making a firm a corporate body enjoying the right of perpetual succession.' Again the Supreme Court in The Commr. of Income-tax, West Bengal v. A. W. Figgis & Co., : 24ITR405(SC) while considering the effect of change in the constitution of a firm in the context of the Income-tax Act, 1922 recognised that 'under the law of partnership a firm has no legal existence apart from its partners and it is merely a compendious name to describe its partners.'
15. The Supreme Court again in Duli-chand Laxminarayan v. Commr. of Income-tax, Nagpur, : 29ITR535(SC) held that a partnership firm cannot enter into a partnership with another firm or Hindu undivided family or individual. S. R. Das, J, (as he then was) at page 358 observed:
'It is clear from the foregoing discussion that the law, English as well as Indian, has for some specific purposes, some of which are referred to above, relaxed is rigid notions and extended a limited personality to a firm. Nevertheless, the general concept of partnership, firmly established in both systems of law, still is that a firm is not an entity or 'person' in law but is merely an associalion of individuals and a firm name is only a collective name of those individuals who constitute the firm. In other words, a firm name is merely an expression, only a compendious mode of designating the persons who have agreed to carry on business in partnership.'
The learned Judge thereafter proceeded to refer to the reported decisions on the point that the firm is not given the legal personality apart from the partners. The learned judge in : 29ITR535(SC) (supra) also held:
'In our opinion the word 'persons' in Section 4 of the Indian Partnership Act, which has replaced Section 239 of the Indian Contract Act, contemplated only natural or artificial, i. e., legal persons and for the reasons stated above, a firm is not a 'person' and as such is not entitled to enter into a partnership with another firm or Hindu undivided family or individual.'
The Supreme Court in : 29ITR535(SC) (supra) did not approve the decision in re Jai Dayal Madan Gopal, AIR 1933 All 77 observing that the said case did not appear to have considered whether there was any repugnancy in the subject of partnership law which operated to exclude the application of that definition to the word 'person' as given in Section 239 of the Indian Contract Act, [872. Again the Supreme Court in Addanki Narayanappa v. Bhaskara Krishna-appa, : 3SCR400 recognised that a partnership property vests in all persons in the sense that every person has an interest in the partnership.
16. The decision of Govinda Menon, J. In re Swaranath Bhatia, AIR 1948 Mad 427 was cited by Mr. Das, learned Advocate for the respondents. But the said decision does not really assist the respondents' case. Govinda Menon, J. held that according to General Clauses Act a 'person' includes a partnership and in Rule 5, Defence of India Rules, if a partnership fails to secure compliance with the Orders made under the Defence of India Rules such partnership should be deemed to have contravened the provisions of the Rules. According to the learned Judge, the partnership had no existence apart from the individuals constituting the firm. Therefore, the individual partner shall be deemed to have contravened the said provision. In view of the Supreme Court's decision in Dulichand's case : 29ITR535(SC) (supra), I am unable to accept the position that a partnership is a 'person' within the meaning of Section 3(42) of the General Clauses Act. Further, even according to the above decision of Gobinda Menon, J. the partner comprising a firm would be liable for contravention of a provision of law by their firm.
17. Thus, these decisions make it clear that although a firm in mercantile usage has a personality of its own, strictly in the eye of law, it is not a legal entity like a natural person. Therefore, the rights and obligations of a firm are really rights and obligations of the individual partners of the firm. In the instant case, according to the findings made by the Additional Collector of Customs in his adjudication order the petitioners 2 to 4 carrying on business as a partnership firm had contravened provisions of the Customs Act and the Gold Control Rules and were liable for penalties under Section 112 of the Customs Act and under Rule 126-L (16) of the Defence of India (Gold Control) Rules. Therefore, no exception can be taken to imposition of penalties individually upon them. But since the firm is not a legal entity and Section 140 of the Customs Act was inapplicable to the adjudication proceeding, the Additional Collector of Customs by imposing penalties also upon the firm has really twice punished the petitioners Nos. 1 to 4 for the same sets of acts. Therefore, although I propose to sustain the imposition of penal ties under the Customs Act and the Defence of India (Gold Control) Rules upon the petitioners 2 to 4, the penalties of fine imposed upon the petitioner No. 5 firm should be quashed.
18. I accordingly make this Rule absolute in part and quash the penalties imposed upon the petitioner No. 5, Messrs. Shyamlal Sen & Company under Section 112 of the Customs Act and under Section 126-L(16) of the Defence of India (Gold Control) Rules, 1962. I do not interfere with the penalties imposed upon the petitioners 1 to 4 under the aforesaid two provisions of law. The rest of the Rule is accordingly discharged.
19. There will be no order as to costs.
20. The operation of this order is stayed for four weeks.