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Smt. Mahadevi Lohariwalla Vs. Union of India (Uoi) - Court Judgment

LegalCrystal Citation
SubjectExcise
CourtKolkata High Court
Decided On
Case NumberCivil Rule Nos. 11445 - 11447Income Tax Act, 1961 - Sections 147 and 148; ;Customs Act, 1962 - Sections 66, 66(1), 105, 105(1), 105(2), 107, 110, 110(1), 110(2), 110(3), 111, 123, 123(2), 124, 124(1), 124(3) and 136(2); ;Gold (Control) Act, 1968 - Sections 58, 71, 71(1) and 99; ;Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974; ;Wealth Tax Act, 1953; ;Code of Criminal Procedure (CrPC) , 1898 - Section 165, 165(2) and 165(5); ;Income Tax Act, 1922 - Section 34; ;Madras General Sales Tax Act, 1959 - Section 41(2); ;Sea Customs Act, 1878 - Section 172; ;Criminal Procedure , 1973 - Sections 100, 1100(1), 100(3), 165, 166 and 166(1)
AppellantSmt. Mahadevi Lohariwalla
RespondentUnion of India (Uoi)
Appellant AdvocateSoumen Ghosh and ;Girija Ranjan Saha, Advs.
Respondent AdvocateNoni Coomar Chakraborty, ;Soumen Chandra Bose, ;Saradindu Samanta, ;Amar Nath Banerjee and ;Gourl Sankar Rey, Advs.
Cases ReferredRadha Kissan v. State of Uttar Pradesh (supra
Excerpt:
- manash nath roy, j.1. the petitioners are near relations (torn) the petitioner no. 2 is a daugher of pet. (torn) no. 1. they have states to the regular (torn) under the income tax act, 1961. it is these (torn) that premises no. 8 jadulal mullick road, calcutta (hereinafter referred to as the said premises), which at all material times belonged and still belongs to smt. mahadevl lohariwalla was searched on 5th april, 1975 by the respondent no. (torn) as inspector of customs along with other officers in terms of a search order no. 34/75, dated 4th april, 1975 (hereinafter referred to as the said search order).2. it has been alleged that such search was conducted without showing or exhibiting the said search order to smt. mahadevi lohariwalla, the owner of the said premises, although she.....
Judgment:

Manash Nath Roy, J.

1. The petitioners are near relations (torn) the petitioner No. 2 is a daugher of pet. (torn) No. 1. They have states to the regular (torn) under the Income Tax Act, 1961. It is these (torn) that premises No. 8 Jadulal Mullick Road, Calcutta (hereinafter referred to as the said premises), which at all material times belonged and still belongs to Smt. Mahadevl Lohariwalla was searched on 5th April, 1975 by the respondent No. (torn) as Inspector of Customs along with other officers in terms of a search order No. 34/75, dated 4th April, 1975 (hereinafter referred to as the said search order).

2. It has been alleged that such search was conducted without showing or exhibiting the said search order to Smt. Mahadevi Lohariwalla, the owner of the said premises, although she requested for the same. It appears that during the concerned search, the officers who con(torn) same seized cadmium anode, Invoice N (torn), dated 22-3-1973 of Industrial Steel Corporation of 40 Strand Road, Calcutta and Challan No. 152/73, dated 22-3-1973, issued to Messrs Canapat Rani Sagarmal by the said Industrial Steel Corporation and one sealed packet containing 2 locker keys. On the statements as made, it further appear that thereafter on 7th April, 1975, by the said search order, locker No. 1882, belonging to the petitioner No. 1 Sm. Gayatri Devi Agarwala and locker No. 1702, belonging to the petitioners jointly, in the branch of the Bank of India at Vtvekananda Road, were searched by the respondent No. 4 as mentioned above and ornaments were seized under the Customs Act, 1962 and the Gold (Control) Act, 1968.

3. The petitioners have alleged that the said respondent No. 4 viz. the Inspector concerned has wrongly described the gold ornaments as gold in the shape of rod, diced and rounded, which are known as bangles. It is their case that 10 British gold coins were also said to have been found by the Customs Officers. The petitioners, have stated that by a letter dated 19th April, 1975, they informed the Assistant Collector of Customs, West Bengal, Respondent No. 3 that inspite of repeated requests and demands, the officer who conducted the search and seizure on 7th April, 1975 and pursuant to the said search order, did not give or supply a copy of the same. In fact, by this letter, the petitioners demanded a copy of the said search order. Thereafter, the petitioners by their letter of 22nd April, 1975 alleged to the said respondent Nos. 3 and 9 (torn) that the search and seizure as made, were malafide and without jurisdiction, as such actions were not covered by the said search order, as issued by the Respondent No. 3, for searching the said premises. It was contended by them that the said search order and the search and seizure conducted on the basis of the same by the respondent No. 4, were not on reasonable belief that the goods were liable to be confiscated or any documents or things relevant for any proceeding under the Customs Act as afore said, were screted. It was contended by them that for such reasons, the concerned search and seizures were bad, illegal and without jurisdiction. These apart, the petitioners contended further that in terms of Section 105(2) of the Customs Act as above, which deals with the powers to search premises and lays down that the provisions of the code of criminal procedure, 1898, relating to search, was, so far as may be, apply to searches under the Section subject to the modification that Sub-Section (5) of Section 165 of the code of criminal procedure shall have effect as if for the word 'Magistrate', wherever it occurs, the word 'Collector of Customs' were substituted and neither of the respondent Nos. 3 and 4 did record the reasons as contemplated under the Section 165 as mentioned above and sent the same to the Collector of Customs. It was further alleged that the conditions precedent for the assumption of jurisdiction to issue search order and to seize, were not satisfied inasmuch as there was no reasonable belief before issuing the said search order and making the seizure that the goods were liable to confiscation under the Customs Act and there was no material and/or basis upon which they had reasons to believe that the goods in question were liable to confiscation. It was further contended that reasonable belief, which should precede the search and seizure, must be an antecedent belief, based upon grounds justifying the entertainment of such belief. It was also contended that the said respondent Nos. 3 and 4, not being the officers under the Gold Control Act, they having acted as Officers under that Act, the entire search and seizure was unauthorised and as such, the seized goods were and are liable to be released from such confiscation. By this letter, the petitioners also required the respondent Nos. 3 and 4, to furnish them the materials and/or the basis upon which they had reasons to believe that the goods were liable to confiscation forthwith, and failing which they made it clear that it should be presumed that those authorities had neither any reasonable belief nor any basis for the formation of such belief before the issue and execution of the said search order. In fact, a demand was made by the petitioners asking the respondents concerned to return the seized goods forthe reasons as mentioned above and more particularly when, according to them the conditions precedent for the exercise of power in the instant case were not satisfied.

4. The said search order has also been claimed by the petitioners to be bad, illegal and without jurisdiction, as according to them the respondents concerned did neither record the reasons as contemplated Under Section 165 of the code of criminal procedure nor sent the same to the Collector of Customs in terms of Section 105(2) of the Customs Act. Their allegations on the question of malafide have already been indicated above. The non-supply of the reasons and the copy of the said search order, has also been claimed by the petitioners to be a case of malafide. It has also been claimed that the requirements of Section 110 of the Customs Act, which is to the following things -

Seizure of goods, documents and things -

(1) If the proper officer has reasons to believe that any goods are liable to confiscation under this Act, he may seize such goods. Provided that where it is not practicable to seize any such goods, the proper officer may serve on the owner of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer.

(2) Where any goods are seized under Sub-Section (1) and no notice in respect thereof is given under Clause (a) of Section 124 within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized.

Provided that the aforesaid period of six months may, on sufficient cause being shown be extended by the Collector of Customs for a period not exceeding six months.

(3) The proper officer may seize any documents here things which, in his opinion, will be useful for, or relevant to, any proceeding under this Act

(4) The person from whose custody any documents are seized under Sub-Section (3), shall be entitled to make copies thereof or take extracts there from In the presence of an officer of customs.

have not been complied with in the instant case and as such also, there was no materials for which the officer concerned could have formed the reason to believe. In fact, as mentioned above, it has been reiterated that the officers concerned did not record their reasons for sending the same to the Collector concerned under the provisions of the code as mentioned above.

5. The petitioners have stated that on 7th April, 1975, the aforesaid respondent No. 4 compelled the petitioner No. 1 and one Shri Kanaiha Lal Agarwalla, her son, to be present at the Customs House and it has also been alleged that under the threat of arrest and detention or for the proceedings to be initiated under the provisions of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (hereinafter referred to as the said COFEPOSA Act). Such statements have also been denied to have been made and it been alleged that the petitioners were also kept under constant vigilence of the Customs and police authorities.

6. It is the case of the petitioners that excepting the ornaments as seized Illegal and mala fide, there was no material before the respondents, upon which any proceedings under the said COFEPOSA Act'or any Act, for the purported smuggling of goods, could have been taken or initiated against them. It is their case that the ornaments in question were in their possession long before and some of the ornaments were given to the petitioner No. 1 at the time of her marriage, by her near relations. It has been claimed that the husband of the petitioner No. 1 was a well to do person and was regularly assessed under the provisions of the Income Tax Act, so also under the Wealth Tax Act, 1953 and on various occasions he gave the petitioner No. 1 various ornaments. In fact, it has been claimed that some ornaments were manufactured about 15/20 years ago. It has also been stated that some of the ornaments belonged to the relations of the petitioners and kept in the locker for security reasons. It has also been alleged that neither the Customs Act nor the Gold Control Act, has any application in respect of the seized ornaments, which ac- cording to the petitioners, were acquired and/or possessed long before the coming into force of those Acts.

7. These apart, the incorporation of the said COFEPOSA Act, has been challenged in the petition, but ultimately, the said challenge has not been proceeded with by the petitioners. In fact, the arguments of the petitioners were restricted only on the grounds of the irregularities, illegality or otherwise of the search and seizure and the powers of the authorities under the relevant statute as mentioned hereinbefore.

8. The affidavits in this case have been filed by the respondent Nos. 1,2,3 and 4 and not by others. In their affidavit in opposition dated 2nd December, 1977, which has been filed through Shri Rathindra Mohan Das, Assistant Collector of Customs, West Bengal, the said respondents have stated that the search and seizures in the instant case were initiated and completed in terms of the said search order and on the basis of the secret informations received to the effect that smuggled goods were kept at the said premises. It has been stated that the search in question of the said premises, was attended to by Shri Rameshwar Loharfwalla, the only son of Smt. Mahadevi Lohariwalla and such search was conducted in the presence of independent witnesses. It has been stated that on such search, 20 pcs. 'pure cadmium anode' of foreign origin, valued at Rs. 15,000/- was found from a room of the 1st floor of the said premises. It has also been stated that the Invoice as mentioned hereinbefore, so also one sealed packet containing 2 keys of Bank lockers were found. It is the case of these respondents that in course of examination Under Section 107 of the Customs Act, which empowers the Customs Officers to examine persons during the course of any enquiry in connection with the smuggling of any goods, Shri Rameshwar Lohariwalla stated that he did not know whether cadmium anode, recovered from his room were of foreign or of Indian Origin. It must be noted here that in fact from the room of Rameshwar Lal Lohariwalla, residing at the said premises, those pieces of cadmium anode were found. It was also stated by the said Shri Lohariwalla that in the Invoice produced by him, the place of manufacture of the said cadmium anode was not shown. He further stated that there were altogether 3 lockers, 2 of which stood In the name of his wife Smt. Gayatri Devi Agarwaila in the Vivekananda Road Branch of Bank of India and one in the name of Kanaiha Lal Lohariwalla, the key of which could not be traced. The statements as mentioned above have been said to be written by Shri Kanaiha Lal Lohariwalla under the dictation of his father Rameshwar.

9. In the above circumstances, it has been observed that the said 28 pieces of pure cadmium anode were found and observed to be of foreign origin and were seized Under Section 110(1) of the Customs Act and as quoted above. In the reasonable belief, that those were smuggled and liable to be confiscation Under Section 111(d) of the said Customs Act, which is to the following effect:

Section 111:

(a)...

(b)...

(c)...

(d) any goods which are imported or attempted to be imported or are brought within the Indian Customs waters for the purpose of being imported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force.

(e)...

W...

(g)...

(h) ...

(i) ...

(j)...

(k) ...

(l) ...

(m) ...

(n) ...

(o) ...

The respondents have further stated that the documents viz. Invoice and Challan and the keys of the lockers were recovered on search of the said premises and they were also seized Under Section 110(3) as quoted above, as they were considered useful for the relevant to the future proceedings relating to the concerned seizure.

10. The respondents have further stated that on 7th April, 1975, both lockers bearing Nos. 1882 and 1702 in the Vivekananda Road Branch of the Bank of India, were opened by the keys so seized. Such opening of the lockers were made before Smt. Gayatri Devi Agarwalla in the presence of the witnesses. On search, it has been stated that considerable number of diamonds of foreign origin were found from locker No. 1882 and the value of such diamonds would be Rs. 1,90,000/-. This assessment of value has been said to have been made on the basis of estimation of one Lokenath Varma of 89, Monohar Das Street, Calcutta and the respondents have further stated that from locker No. 1702 as aforesaid (1) primary gold in the form of rods, diced rounded and joined by shouldering and weighing 261 tollas, 8 annas and (2) 10 pieces of British coin of gold, weighing 6 tollas, 12 annas were recovered and the value of which on estimation has been assessed to Rs. 1,60,900/ . That apart, from this lockers, Bank papers relating to locker Nos. 1882,1702 and 1677 were also recovered.

11. It is the case of the respondents that Gayatri Devi was examined Under Section 107 of the Customs Act and she stated that the diamonds and jewelleries recovered from her locker No. 1882 and the golds as mentioned above, recovered from her locker No. 1702, were received by her at the time of marriage. All these jewelleries and diamonds and gold which were provisionally valued at Rs. 3,57,900/- were claimed by her to be her own ornaments and property. She of course admitted that she did not submit any declaration to the Gold Control authorities for the possession of such gold nor had she submitted any Wealth Tax return for such gold and diamonds as recovered from the locker Nos. 1882 and 1702. In these circumstances, diamonds and gold were seized according to the respondents, Under Section 110(1) of the Customs Act, on the reasonable belief that those were smuggled and liable to confiscation Under Section 111(d) of that Act and also Under Section 71 of the Gold (Control) Act, which is to the following effect:

Section 71: Confiscation of gold

(1) Any gold in respect of which any provision of this Act or any rule or order made there under has been, or is being, or is attempted to be, contravened shall be liable to confiscation.

(2) Any package, covering or receptacle (including its other contents) in which any gold liable to confiscation under Sub-Section (1) is found shall also be liable to confiscation.

(3) Where any gold liable to confiscation under Sub-Section (1) is mixed with other goods in such manner that such gold cannot be separated from those other goods, the whole of such good shall be liable to be confiscation.

(4) Any gold which is liable to confiscation under Sub-Section (1) shall be so liable notwithstanding any change in its form.

The respondents have stated that these apart, all the documents recovered from the lockers were also seized Under Section 110(3) of the Customs Act.

12. It is their case that on 8th April, 1975, locker No. 1677 at the Volt of the Bank of India of the said Vivekananda Road Branch was opened drilling by the representatives of Messrs. Godrej & Company and was searched in the presence of Shri Kanaihya Lal Lohariwalla and other witnesses. This search resulted in the recovery of (a) diamonds provisionally valued at Rs. 17,500/-, (b) primary gold weighing 59 tollas and 9-1/2 annas, valued at Rs. 35,775/- (c) new gold ornaments weighing 73 tollas, 5-1/2 annas, valued approximately at Rs. 36,420/- (d) old gold ornaments, not commonly used for personal adornment, weighing 252 tollas and 13-1/4 annas, valued at Rs. 1,20,055/- and one piece of longings R.G. Wrist watch valued at Rs. 500/-. All these were collectively valued, according to the respondents, by the goldsmith at Rs. 2,10,250/-. They have stated that Shri Kanaihya Lal Lohariwalla, in a voluntary statement made by him inter alia stated that he was the only son of Shri Rameshwar Lal Lohariwalla. He was 20 years old and un-married and was engaged In cloth business. He further stated to have been living with his parents at the said premises. It Is his case that he opened the said locker No. 1677, about 2 years back and the same was never operated by his sister Kumari Puspa Agarwalla, though her name was mentioned in the Bank receipt. It is the further case that the locker in question, was opened in the joint name of himself and the said Kumari Puspa Agarwalla and when- ever required, he opened and operated the same. In fact, he stated that he opened the locker for the last time in December, 1974. In his statement he has further stated that he did not know how and when his father, who was the head of the family, acquired the goods under seizure, and the locker in question, was opened by him, as advised by his mother and in the manner as indicated. It was his further case that the goods under seizure, recovered from the different lockers on 7th and 8th April, 1975, belonged exclusively to his family and none of his married sisters or any other relatives had any ornaments in the said lockers. He also admitted that he did not declare the seized gold before the Gold Control Authorities and It was not his knowledge whether anybody of his family ever declared them before any authority. In these circumstances all goods as recovered from the locker No. 1677, were seized under the Customs and Gold Control Act, on the reasonable belief that those were liable to confiscation. The total value of the seizure ac- cording to the respondents came to Rs. 5,83,150/-.

13. The respondents have stated that a notice was issued on the 15th April, 1975, by the Superintendent, Divisional Preventive Unit, to Shri Rameshwar Lal Lohariwalla, Smt. Gayatri Devi Agarwalla and Shri Kanaiha Lal Lohariwalla, for attending the examination of the seized diamonds by the Customs Officers on 17th April, 1975. But all those persons asked for adjournment and as such, another notice was issued to them for attending the necessary examination on 22nd April. 1975. It has been stated that on 22nd April, 1975, Smt. Gayatri Devi Agarwalla, Shri Kanaiha Lal Lohariwalla, Shri Rameshwar Lal Lohariwalla, again prayed for a fortnight's adjourment and as such another date had to be fixed. The respondents have stated that in view of the conduct as mentioned above, they formed the opinion that the parties were adopting a dialatory tactics, for the purpose of avoiding the examination of the seized diamonds. According to them, all opportu]nities to the persons concerned were given, but they could not produce any evidence establishing the legal ownership of the goods as seized. Inview of the circumstances as mentioned above, the respondents have stated that the show cause notice was sought to be issued, but such intention could not be given effect to Because of the injunctions obtained by the petitioners from this Court. However, ultimately on the modification of the interim order, on or about 29th July, 1975 by P.K. Banerjee, J. the answering respondents could take steps in the matter. It has been alleged that even after such order of modification, the petitioners took appeals and ultimately in view of the orders made by the learned Appellate Court, notice was issued on 22nd February, 1976 to Smt. Gayatri Devi Lohariwalla, to attend to the examination of the diamonds concerned. In this examination, Shri Rameshwar Lal Lohariwalla, who was also duly informed, did not turn up personally, but he appeared through counsel, who asked for time and acceding to such request, the next date was fixed on 6th March, 1976. Ultimately, the said Rameshwar Lal Lohariwala appeared through his authorised representative, who again could not establish by any documentary evidence the source and the legal possession of cadmium anode as seized.

14. The respondents have stated that thereafter, by a notice dated 22nd February, 1976, Smt. Gayatri Devi was asked to appear at the time of the examination of the diamonds. It is their case that the parties to directed to appear, did not in fact appear inspite of opportunities and for that reason, they were asked to submit their representations against the proposed extention of time for issuing show causes. It has been stated that even this time also, the parties took no steps, but prayed for time. In view of the above, the diamonds seized from Smt. Gayatri Devi on 24th February, 1976, were valued by Government valuer, in the presence of witness. On such valuation, the value was was previously and provisionally fixed on assessment, was found to be low and on due valuation this time, the total valuation was raised to Rs. 8,60,906.00 p. from Rs. 1,97,000/-.

15. The Respondents have stated that the examination of set of diamonds seized from Shri Kanbalyalal LohariwaHa and assessing of primary gold seized from Smt. Gayatri Devi and Kanharyalal Lohariwalia, could not be done or completed because of several orders of Injunctions issued by this court and they had to take steps to have the subsisting Interim orders modified.

16. The Respondents have also claimed the application, to be not maintainable, as the petitioners have fated to disclose Informations regarding ownership or acquisition or possession of the goods as seized and as the points in Issue in this case, would be hit by resjudlcata or principles analogous thereto, because of the determinations dated 5th July, 1977 made by Chlttatosh Mookherjee, J. in Civll Rule No. 18102(w) of 1975. In this Rule, the challenge was against the search and seizure and also the extension of time for the issue of the snow cause notice.

17. It has also been contended by the Respondents that the petitioners have violated the provislons of the said COFEPOSA Act or have aided and abated others in (committing offences thereunder. It has been stated that the said premises was searched with due authority, vaiidly and in accordance with law and seizures as were made or done, were also due, legal, proper and bona fide. It has further been stated that at the time of search, the concerned search warrant was duly exhibited, shown and produced. The Respondents have stated that the gold ornaments were not bangles as claimed, but they were just gold rods diced and rounded. It has been stated by the Respondents that apart from the said premises, premises Nos. 37/1, Jatindra Mohan Avenue and 12, Armenian Street, were duly searched by the Customs Officers on 10th April, 1975, pursuant to search order No. 35/75, dated 10th April, 1975. The valuations of the golds and diamonds as sezled, have also been stated to be made duly and with authority. The said order, according to the Respondents, was duryshoym to the petitionere and their signatures were also stated to have been obtained on the body of the same. In short, the Respondents have stated that all steps upto the seizure, were taken duly and on proper or appropriate opportunittes to the petitioners. They have also stated that the belief in the instant case that the goods as seized, were liable to be so seized and confiscated, was duly formed, on proper materials and on due application of mind. It is the categorical case of the Respondents that the petitioners were given all and every opportunities, but they have failed and refused to accept the same. Any threat or intimidation as alleged to have been practised on the petitioners, have been denied.

18. In their reply dated 27th February, 1978, the petitioners have denied the allegations or statements as contained in the opposition of the Respondents and reiterated the stand and the facts as taken or mentioned in the petition.

19. During the course of hearing, the answering Respondents on 27th March, 1978, filed a supplementary affidavit through Shri Bimala Kanta Ghosh, who was the Assistant Collector of Customs, West Bengal, Calcutta, on the relevant date and time. This deponent has stated that he received informations on 4th April, 1975, about the complicity of Rameshwar Lal Agarwaila in the smuggling of foreign goods like gold, dollars, silver etc., and he had four lockers at the Vivekananda Road Branch of the Bank of India in the following names :-

(i) Rameshwarlal Lohariwalia.

(ii) Kanhatyalal Lohariwalla.

(iii) Puspa Lohariwalla

(iv) Sushila Devi,

wherein, gold, dollars, sale proceeds of smuggled goods and gold ornaments were kept secreted and at the said premises, huge quantity of zinc slabs, silver utensils, were also kept secreted in the name of his mother Mahadevi Lohariwalia, apart from the fact that the concerned sale proceeds of smuggled goods, were kept secreted in an Iron safe. This deponent has stated that on such informations, he duly formed or had reasons to believe that the concerned goods were liable to be confiscated.

20. The said deponent has stated that accordingly, he issued the said order on 4th April, 1975, authorising Shri P.K.Mitra, Under Section 105 of the Customs Act, to search the lockers in the Bank of India, in the names of the persons as mentioned above at the said Bank's branch at Vivekananda Road and also the said premises belonging to Mahadevi Loharfwalla. The said order has been stated to be signed by witnesses, apart from Kanhaiyalal and Rameshwarlal Lohariwalla on 5th April, 1975. This depondent has also stated to have issued the search authorisation No. 35 of 1975, on 10th April. 1975, in favour of Shri P.K Mitra i.e. the Inspector concerned, Under Section 105 of the Customs Act, to search, not only the said premises, but also the other two premises as mentioned above. The copies of the search warrants and the seizure Memos have been disclosed with this affidavit.

21. The validity of the receipt of the Informations as alleged in the supplementary affidavit, has been denied by the petitioners in their further reply dated 11th April, 1978. That apart, they have contended that the seizing officer had no competence, authority or jurisdiction, to issue search authorisation orders in respect of locker No. 1882 as mentioned above and which stood in the name of Smt. Gayatri Devi and so also the Locker No. 1702, which was in the name of Smt. Gayatri Devi and Kausalla Agarwalla. The petitioners have contended that the goods as seized, were not of foreign origin and even if they were so, the officer concerned had no jurisdiction to seize them. They have con- tended that after cutting and polishing, it is not possible for any one to testify whether the diamonds are of foreign origin or no so the determinations as made in respect of them, was improper. In fact, it has been cdntended that the foreign origin of the diamonds was not established duly. The petitioners have disclosed certificates from Foreign Diamond Merchants, to establish the above contentions along with their reply.

22. Mr. Ghosh, appearing in support of the Rule, contended firstly, that since the said search order was in respect of the said premises, thus on the basis of the same, the lockers in question could not be searched and as such and consequently, the seizure as made was also without jurisdiction, he secondly argued on a reference to Section 105 of the Customs Act, which is to the following effect :-

Section 105: Power to search premises:

(1) If the Assistant Collector of Customs or in any area adjoining the land frontier or the coast of India an Officer of Customs specially empowered by name in this behalf by the Board, has reason to believe that any goods liable to confiscation or any documents or things which in his opinion will be useful for or relevant to any proceeding under this Act, are secreted in any place, he may authorise any officer of customs to search or may himself search for such goods, documents or things.

(2) The provisions of the code of Criminal procedure, 1898 (5 of 1898) relating to searches shall, so far as may be, apply to searches under this Section subject to the modification that Sub-Section (5) of Section 165 of the said code shall have effect as if for the word 'Magistrate', whenever it occurs, the words 'Collector of Customs' were substituted; that the formalities and requirements under the same not having been complied with, the entire action was vitiated. In fact, it was contended by him that the reasonable belief in the instant case has neither been duty formed nor the conditions precedent for holding such belief were either formed or even proved and intact the conditions precedent for the assumption of jurisdiction to issue the said search order or to seize, were not satisfied and furthermore, the belief as said to be formed viz. that the subject goods were liable to confiscation, was on no materials at all. It was thirdly contended by him that the Respondent Nos. 3 and 4 being officers under the Gold Control Act and they having acted as officers under that Act, the entire search and seizure was also unauthorised. He fourthly contended that the officers concerned, not having recorded the reasons as contemplated Under Section 165 of the Code of Criminal Procedure, 1973, the terms whereof are as under:-

Section 166: Search by police officer -

(1) Whenever an officer in change of a police officer making an investigation has reasonable ground for believing that anything necessary for the purposes of an investigation necessary for the purposes of an investigation into any offence which he is authorised to into any offence which he is authorised to investigate may be found in any place within the limits of the police station of which he is in charge, or to which he is attached and that such thing cannot in his opinion be otherwise obtained without undue delay, such officer may, after recording In writing the grounds of his belief and specifying in such writing, so far as possible, the thing for which search is to be made, search, or cause search to be made, for such thing in any place within the limits of such station.

(2) A police officer proceeding under Sub-Section (1) shall, if practicable, conduct the search In person.

(3) if he is unable to conduct the search in person, and there is no other person competent to make the search present at the time, he may, after recording in writing his reasons for so doing, require any officer subordinate to him to make the search, and he shall deliver to such subordinate officer and order In writing, specifying the place to be searched, and so far as possible, the thing for which search is to made, and such subordinate officer may there- upon search for such thing is such place.

(4) The provisions of this Code as to search warrants and the general provisions as to searches contained in Section 100 shall, so far as may be, apply to a search made under this Section.

(5) Copies of any record made under sub-Section (1) or Sub-section (3) shall forthwith be sent to the nearest Magistrate empowered to take cognizance of the offence and the owner or occupier of the place searched shall, on application, be furnished free of cost, with a copy of the same by the Magistrate;

and furthermore such reasons not having sent to the Collector of Customs under or in terms of Section 105(2) of the Customs Act, the entire Section was bad. These submissions of Mr. Ghosh have connection to or relevance with his first submissions as mention above. Mr. Ghosh, fifthly submitted that the non-supply of the reasons and the copy of the said search order, were acts of mala fide apart from contending further and sixthly that the requirements of Section 110 of the Customs Act were not also complied with or fulfilled in this case. These apart, Mr. Ghosh contended seventhly and lastly that the action sought to be taken under the said COFEPOSA Act, was also illegal and unauthorised, apart from being without any materials or satisfaction.

23. In support of his first, second, fourth and sixth submissions as mentioned hereinbefore viz. the arguments on Section 105 of the Customs Act, Mr. Ghosh, on a reference to the said search order, contended that the location of lockers not having been mentioned and when the said search order was for the said premises only, the search of them and the consequent seizure of the contents thereof, was improper. In fact, it was his submissions, that if at all, by virtue of the said search order, only the said premises could be searched and not the lockers at the Bank's premises. That the lockers in question were searched on the basis of the said search order or pursuant thereto, cannot be in dispute. To substantiate this branch of submissions and so also the submissions on formation of opinion on due satisfaction and the meaning and impart of the word 'belief', reference was made by Mr. Ghosh firstly, to the case of Assistant Collector of Customs for Prevention and Ors. v. The New Central Jute Mills Co. Ltd., 77 C.W.N. 14. In that case it has been observed that there is nothing in Section 105(1) of the Customs Act, 1962 which re- quires the Customs authority to specify the name of the individual whose premises are to be searched. The power is given Under Section 105 of the Act to search the premises and if the particulars of the premises are given in the authorisation, in such case, the requirements of the Section are fulfilled.

24. It has also been laid down there that the statutory requirements of reasonable belief, rooted in the information in possession of Customs Officer, is to safeguard the citizen from vezatious proceedings. 'Belief' is a mental operation of accepting a fact as true, so, without any fact, no belief can be formed. It is true that it is not necessary for the Assistant Collector of Customs to state reasons for his belief. But if it is challenged that he had no reasons to believe, in that case, he must disclose the materials upon which his belief was formed so that the court can examine the materials to find out whether an honest and reasonable person can base his reasonable belief upon such materials although the sufficiency of the reasons for the belief cannot be investigated by the court, apart from holding that the words 'when the proper officer has reasons to believe' in Section 105 of the Act, suggests that the belief must be that of an honest and reasonable person based upon relevant materials and circumstances and if the information is such as leads the Customs Officer to believe that articles of search are secreted in a place, he may thereby have 'reasons to believe' as contemplated Under Section 105 of the Act and issue a warrant even if he does not know the name of the persons who is in possession of the articles of search. All that the court can consider is, whether there is ground which prima facie justifies the reasonable belief.

The above case was referred to by Mr. Ghosh for the purpose of sustaining his arguments that opinion was required to be formed duly and in the instant case the same was not formed duly. He secondly, referred to the determinations In the case of Ral Bahadur Seth Sreeram Durgaprosad (P) Ltd. v. Deputy Collector, Customs Department and Ors. - : AIR1965AP294 , wherein it has been observed that Under Section 105 of the Customs Act the Customs Officer can himself issue a warrant if he himself has reason to believe as mentioned in the Section. At the same time the Legislature introduced safeguards by way of fixing a high rank for the officer and providing Under Section 136(2)(c) for his liability to punishment if he abused the power entrusted to him Under Section 105 of the Act, and it is not possible to lay down precisely or exhaustively as to what constitutes reason to believe. It would depend on various circumstances. The issue of a warrant and the reason to believe for issue of such warrant would involve the following elements (1) Articles of search; (2) Place in which they are secreted; (3) Manner in which they are secreted; (4) Person who is in possession of the articles of search or the place where they are secreted; (5) Person who is in where they are secreted. It may be that the information which the warrant officer has regarding each of the elements is not precise or absolutely certain without any possibility of doubt. But still, if the information is such as lends him to believe that articles of search are secreted in a place which is concrete, he may thereby have reason to believe as contemplated in Section 105. He may in such circumstances issue a warrant even if he does not know for certain the name of theperson who is in pos- session of the articles of search or the place where they are secreted. All that the court can consider is whether there is ground which prima facie justifies the statement in the warrant by the warrant officer that he had reason to believe. In that it has also been ob- served that that any details should be mentioned in the warrant for example: (1) specific proceedings pending or contemplated under Act; (2) specific documents or things useful or relevant to any such proceedings; (3) Indication of any reason why the officer issuing the warrant had reason to believe; (4) mentioning of goods liable to confiscation and (5) mentioning of offences under the Act or under any other law. In particular, it does not require that the reason to believe which the warrant officer had (such as mentioned in the Section) should be mentioned in the warrant though it is necessary that he should have no such reason to believe as a condition precedent to his issuing a warrant lawfully.

25. The next case, to which reference was made, is the case of Durga Prosad v. H.R. Gomes and Anr. - A.I.R. 1966 S.C. 1209. In that case, apart from other findings, it has been held that the object of grant of power Under Section 105 is not search for a particular document but of documents or things which may be useful or necessary for proceedings either pending or contemplated under the Customs Act. At that stage it is not possible for the officer to predict or even to know in advance what documents could be found in the search and which of them may be useful or necessary for the proceedings. It is only after the search is made and documents found therein are scrutinised that their relevance or utility can be determined. To require, therefore, a specification or description of the documents in advance is to misapprehend the purpose for which the power is granted for effecting a search Under Section 105 of the Customs Act. Therefore, the power of search granted Under Section 105 of the Customs Act is a power of general search. But it is essential that before this power is exercised the preliminary conditions required by the Section must be strictly satisfied, that is the officer concerned must have reason to believe that any documents or things, which, in his opinion are relevant for any proceeding under the Act, are secreted in the place searched, and then to the case of Hindusthan Aluminium Corporation Ltd. v. The Controller of Aluminium and Ors. : AIR1976Delhi225 , wherein it has been observed that the reason to believe that any contravention had taken place is a pre-condition for seizure and such reason to believe must relate to the period of time when the seizure was made. Any subsequent acquisition of belief would be of no avail.

26. On the question of the formation of 'belief' it was contended that such formation must be the reasonable formation or the formation of such belief by a reasonable man and those tests have not been satisfied in this case. In support of such submission, reference was placed on the determination in the case of Sheo Nath Singh v. The Appellate Assistant Commissioner of Income-tax (Central), Calcutta and Ors. - : [1971]82ITR147(SC) , which is a determination Under Section 34 of the Income-tax Act, 1922 and wherein the words 'Reasons for belief' has been construed to suggest that the belief must be that of an honest and reasonable person based upon reasonable grounds and that the Income-tax Officer may act on direct or circumstantial evidence but not on mere suspicion, gossip or rumour. He will be acting without jurisdiction if the reason for his belief that the conditions are satisfied does not exist or is not material or relevant to the belief required by the Section. The court can always examine this aspect though the declaration or sufficiency of the reasons for the belief cannot be investigated by the Court. This view has been further enunicated and reaffirmed in the case of Income-tax Officer, I Ward, Dist. VI, Calcutta and Ors. v. Lakhmani Mewal Das -103 I.T. R 437, which was a case Under Sections 147 and 148 of the Income-tax Act, 1961 and in that case it has been held inter alia amongst others that teh reasons for the formation of the belief contemplated by Section 147(a) of the Income-tax Act, 1961 for the reopening of an assessment must have a rational connection or relevant hearing on the formation of the belief. Rational connection postulates that there must be direct nexus or live link between the material coming to the notice of the Income-tax Officer and the formation of his belief that there has been escapement of the income of the assessee from assessment in the particular year because of his failure to disclose fully and truly all material facts. It is no doubt true that the court cannot go into the sufficiency of adequacy of the material and substitute its own opinion for that of the Income-tax Officer on the point as to whether action should be initiated for reopening the assessment. At the same time we have to bear in mind that It is not any and every material, howsoever vague and indefinite or distant remote and far fetched, which would warrant the formation of the belief relating to escapement of the income of the assessee from assessment. The fact that the words 'definite information' which were there in Section 34 of the Act of 1922 at one time before its amendment in 1948 are not there in Section 147 of the Act of 1961 at one time before its amendment in 1948 are not there in Section 147 of the Act of 1961 would not lead to the conclusion that action can now be taken for reopening the assessment even if the information is wholly vague, indefinite, far fetched and remote. The reason for the formation of the belief must be held in good faith and should not be a mere pretence.

27. The satisfaction as mentioned hereinbefore on a reference to the determinations in the case of The Assistant Collector of Customs and Superintendent, Preventive Service Customs Calcutta and Ors. v. Charan Das Malhotra, : 1973ECR1(SC) , wherein it has been held that the power under the proviso to Section 110(2) Is quasi-judicial and at any rate one requiring a judicial approach. While the power of seizure Under Section 110(1) can be exercised on the basis of reasonable belief on the part of the concerned officer, the power of extending the period to give notice Under Section 124(a) is to be exercised only on 'sufficient cause being shown'. This expression en- visages at least some sort of enquiry on facts placed before the authority and determination by him of those facts. Extension order is not to be passed mechanically. The Power under Sub-section (1) cannot be equated with the power under the proviso to Section 110(2), was contended by Mr. Ghosh to be objective and not subjective and he contended on a reference to the affidavits, that such tests have not been fulfilled or complied with as the basis of the process or for proceeding in the matter, was only on informations received. Thus, on the basis of the determinations as aforesaid and also on the basis of the determinations in the case of The Collector, Central Excise, Allahabad and Ors. v. L. Kashinath Jewellers - : AIR1972All231 , it was contended by Mr. Ghosh that the officer concerned in this case, had no reasonable belief in terms of the requirements of Section 110 of the Customs Act and such belief, if any was not made known to the court as there is no affidavit by the officer concerned and since there is no affidavit disclosing how such belief was formed. This Allahabad case was under the provisions of the Gold Control Act and has construed the terms 'Has reason to believe' as in Section 66(1) (a). It has been observed that the condition precedent for the application of Section 66 is the reasonable belief that the provisions of the Act have been or are being or are attempted to be contravened. The power then extends to the seizure of such gold in respect of which contravention has either been made or is about to be made. The Section does not permit an indiscriminate seizure with a view to fishing out material to form a belief and justify it by reasons culled therefrom. The belief must be of an honest and reasonable person based upon reasonable grounds. It is not a matter of subjective satisfaction, apart from holding that the power of seizure being an in-road into fundamental right to property, has to be exercised strictly in accordance with law. As mentioned hereinbefore, Mr, Ghosh has alleged that there has been total non-application of mind and proceedings have been completed mechanically. He wanted to supplement such arguments with reference to the statements as made in the supplementary affidavit, where reference has been made in 'some goods' without any particulars. These submissions were again sought to be sup- planted on a reference to the seizure of the two keys Under Section 110(1) of the Customs Act. Mr. Ghosh contended that either under the Customs Act or under the Gold Control Act, those keys could not have been seized, and since they were also seized, that the established a case of indiscriminate seizure or absolute non-application of mind.

28. Mr. Ghosh further contended on a reference to the supplementary affidavit that the seizure was not admittedly under the Gold Control Act, but the same was under the Customs Act and more particularly Under Section 105 of the same and no endorsement could make such seizure under the Gold Control Act. To substantiate the arguments, he also referred to and relied on the said search order. On a reference to the provisions of Section 58 of the Gold Control Act, which are to the following effect :-

Section 58: Power to enter and search -

(1) Any Gold Control Officer authorised in this behalf by the Administrator may, if he has any reason to suspect that any provision of this Act has been, or is being, or is about to be, contravened, enter and search, at any reasonable time any refinery or the business premises of a licensed dealer or a certified goldsmith.

(2) Any Gold Control Officer not below the rank of a Superintendent of Central Excise, empowered in this behalf by the Central Government may, if he has any reason to suspect that any provision of this Act has been, or is being, or is about to be, contravened, authorize any officer of Government to enter and to search any premises, vaults, lockers or any other place, whether above or below ground, or may himself do so. Mr. Ghosh wanted to establish that since there was no authority reposed under the said Gold Control Act, so the seizure of Gold or the gold ornaments as made, was neither possible nor permissible or authorised. In fact, this was the third submissions of Mr. Ghosh. While on the question of recording the reasons, in terms of Section 165 of the code of criminal procedure, Mr. Ghosh contended that there was object failure of the officers concerned in that respect or to act in terms of Section 165 as above and to send such reasons to the Collector of Customs, in terms of Section 105(2) of the Customs Act and that has vitiated the entire action. Insupport of his submissions and for establishing the necessary requirements, reference was made to the case of Commissioner of Commercial Taxes, Board of Revenue, Madras and Anr. v. Ramkrishan Shrikishan, Jhavar, etc. - : [1968]1SCR148 . This was a case under the provisions of Madras General Sales Tax Act (1 of 1959) and the powers of entering office and inspecting accounts Under Section 41(2) has been construed to include the power to search ac- counts maintained by a dealer and goods in his possession. It has also been observed that Section 165 of the code of criminal procedure and safeguard provided there under apply mutatis mutandis to searches Under Section 41(2) and it has been observed that all provisions contained in the code of criminal procedure relating to searches would be applicable to searches under sub- Section (2) so far as may be. Some of these provisions are contained in Chapter VII but one such provision is contained, in Section 165. It is true that that Section specifically refers to an officer-in-charge of a police station or a police officer making an investigation. But when the police officer making an investigation. But when the proviso applies the provisions of the code of Criminal Procedure to all searches made under this sub-Section, as far as may be possible, we see no reason why Section 165 should not apply mutatis mutandis to searches made under this sub-Section as far as may be possible, we see no reason why Section 165 should not apply mutatis mutandis to searches made under Sub-section (2). We are therefore of opinion that safeguards provided in Section 165 also apply to searches made under Sub-section (2). These safeguards are (i) the empowered officer must have reasonable grounds for believing that anything necessary for the purpose of recovery of tax may be found in any place within his jurisdiction, (ii) he must be of the opinion that such thing cannot be otherwise got without undue delay, (iii) he must record in writing the grounds of his behalf, and (iv) he must specify in- such writing so far as possible the thing for which search is to be made. After he has done these things, he can make the search. These safeguards, which in our opinion apply to searches under Sub-section (2) also clearly show that the power to search under Sub-section (2) is not arbitrary. Inview of these safeguards and other safeguards provided in Chapter VII of the code of Criminal Procedure which also apply so far as may be to searches made under Sub-section (2) we can see no reason to hold that the restriction, if any on the right to hold property and to carry on trade, by the search provided in sub- Section (2) is not a reasonable restriction keeping in view the object of the search, namely, prevention of evasion of tax. For similar construction, reference was also made by Mr. Ghosh to the case of S.K. Srivastava v. Gajanand Patriwalla - : AIR1956Cal609 , which is of course a case under the provisions of the Sea Customs Act, 1878 and the words 'may issue' in Section 172 of the same so also the said Section itself, was construed. It has been observed in that case that since the search warrant issued Under Section 172. Sea Customs Act must be executed in the same way and shall have the same effect as a search warrant issued under the code, the requirement of producing the goods and papers seized before the issuing Magistrate must attach also to a search warrant issued Under Section 172, Sea Customs Act, and the non-existence of a pending proceeding in court can be no reason for holding proceeding in Court can be no reason for holding that the production of the thing seized before the Court of the Magistrate is not necessary. It is no doubt true that when at the instance of the prosecution, documents of the accused are seized in execution of a search warrant, the prosecution must be given an opportunity to scrutinise the documents. The executing officer may with the express or tacit consent of the Magistrate take the goods and documents seized to the prosecutor for examination without first producing them before the Magistrate but this does not affect the power of the Magistrate to pass orders for the return of the documents to the party from whom they were seized. As mentioned hereinbefore, the fifth submissions of Mr. Ghosh were on the ground of non-supply of reasons and the said search order and that according to him has also vitiated the entire proceedings.

29. Mr. Chakravarty, appearing for the answering Respondents, referred to the said search order and then to the prayers in the petition for their terms, scope and effect. Such reference was made by Mr. Chakraborty, for the purpose of establishing that in view of the fact that the subject matter of the three Rules which were heard together, being the same as in the three Rules before T.K. Basu, J. the Rules under consideration would not be maintainable. In fact it was contended by him that the prayers and the pleadings in this case must be strictly construed or should be construed in terms of the tests as laid down in the case of Udhav Singh v. Madhab Rao Scindla - : [1976]2SCR246 and if such tests are applied then also it would be apparent that the same or identical prayers were made or put forward before T.K. Basu, J. On a construction of Section 105 of the Customs Act, it was contended by Mr. Chakraborty that authorisation thereunder and in the instant case, by the said search order, would include near relation. In fact, Mr. Chakravarty contended that the authorisation being specifically for search of the said premises including the lockers and seizure of the subject goods, anybody or any premises, found to be involved, may be proceeded with, search and subject goods may be seized. Such submissions were made on a reference to the order authorising the search which was made on information. Mr. Chakravarty contended that everflf such steps were taken only on information, as duly pointed out in the concerned order, that would not take away the right to search and seize. On construction of Section 105 as aforesaid, Mr. Chakravarty also claimed that the provisions therein do also authorise the search of the place. In fact, Mr. Chakravarty con- tended that if on the basis of a search order duly issued, contraband goods or articles are seized from the place as mentioned in the said order, which incidentally is the fact in this case, and from such place, during the course of the necessary search and seizure, it appears that other goods or articles are kept concealed elsewhere, then on that basis and as a continuation of the same action, the other places may be searched and subject items may also be seized, without any further search order, such prohibited and or acts being considered as part of the same action. He contended further that power to search Under Section 105 of the Customs Act is a general power, the resultant effect whereof in this case was the recovery of the subject goods. In fact, it was contended by Mr. Chakravarty that the word 'secreted' In Section 105 as above, would mean secreted at any place and against the normal run of human conduct. In support of his submissions, Mr. Chakravarty also referred to the determinations In the case of Durga Prosadetc. v. H.R. Gomes, Superintendent (Prevention) Control Excise, Nagpur and Anr. (supra) wherein It has also been that the word 'secreted' in the context means documents which are kept not in the normal or usual place with a view to conceal them or it may even mean documents or things which are likely to be secreted, in other words, documents or things which a per- son is likely to keep out of the way or to put in a place where the officer of law cannot find It. It Is correct to say that the word 'secreted' is used in Section 105 in the sense of being hidden or concealed. The object of grant of power Under Section 105 is not search for a particular document but of documents or things which may be useful or necessary for proceedings either pending or contemplated under the Customs Act. At that stage it is not possible for the officer to predict or even to know in advance what documents could be found in the search and which of them may be useful or necessary for the proceedings. It is only after the search is made and documents found therein are scrutinised that their relevance utility can be determined. To require, therefrom a specification or description of the documents in advance is to misapprehend the purpose for which the power is granted for effecting a search Under Section 105 of the Customs Act. Therefore, the power of search granted Under Section 105 of the Customs Act is a power of general search. But it is essential that before this power is exercised, the preliminary conditions required by the Section must be strictly satisfied that is the officer concerned must have reason to believe that any documents or things, which, in his opinion, are relevant for any proceeding under the Act, are secreted in the place searched.

30. These apart, Mr. Chakravarty also relied on the object of Section 105 as enunciated in the case and which has been quoted hereinbefore.

31. The said search order in this case has been claimed by Mr. Chakravarty to be identical to the search order in the case of Jaichand Lal Sathia (Matter No. 18 of 1965, decided by B.N. Banerjee, J., on 3rd February, 1966). Such claim was made by him on production of the necessary records and he contended that since in that case, B.N. Banerjee, J., has observed that mere irregularities in the search would not vitiated the seizure, the same principle should also be applied here. It was also contended by Mr. Chakravarty, on a reference to the determinations in the case of Radha Kissen v. State of Uttar Pradesh - : (1963)IILLJ667SC , that even if search was vitiated by an order not properly issued or there was illegality in the search, that would not vitiate the seizure. In such a case, of course the High Court would have restricted power of interference.

32. Mr. Chakravarty argued that search Under Section 105 of the Customs Act and search Under Section 165(2) of the Code of Criminal Procedure, are two different and distinct process and method. For incidence of search Under Section 105, he relied on the observations in the case of R.S. Seth Gopiksan Agarwal v. R.N. Sen, Assistant Collector of Customs and Central Excise, Raipur and Ors. - : 1967CriLJ1194 . In that case, it has been laid down that the words 'Reason to believe' need not be present in the order and it would be enough if the sense could be gathered or apparent from the tenor of the order. It has also been observed in that case that in ordering search, the Assistant Collector need not either state reasons or give particulars of the nature of goods and of the documents in the authorisation for search apart from holding that the procedure prescribed in or for actions Under Section 165(1) of the Code of Criminal Procedure are not applicable in case of search Under Section 105(2) of the Customs Act inasmuch as the two Sections are intended to meet totally different situations. It should also be mentioned that in the other case of Assistant Collector of Customs for Prevention and Ors. v. The New Central Jute Mills Co. Ltd. - : AIR1973Cal91 , which was cited by Mr. Chakravarty, it has been observed that the procedure prescribed Under Section 165(1) of the code of Criminal Procedure would not apply in Section 105(2) of the Customs Act, apart from holding that the power is given Under Section 105 to search the premises and if the particulars of the premises are given in the authorisation, the requirements of Section are fulfilled. It has also been observed in this case that the belief must be that of an honest and reasonable person, based upon relevant materials and circumstances.

33. On the question of Section 110 of the Customs Act and reasonable belief as is required to be formed thereunder, Mr. Chakravarty contended that such belief depends upon the subjective satisfaction of the officer or the authority concerned and would not be open to judicial review and scrutiny. The view that before the officer concerned could make a seizure Under Section 110(1), he should have reason to believe that the goods which he propose to seize are liable to confiscation under the Act cannot be doubted and in fact the same view has been expressed in the case of Ganeshmul Channilal Gandhi and Anr. v. Collector, Bangalore - A.I.R. 1968 Mysore 89, as cited by Mr. Chakravarty. In that case it has also been observed that, but it is equally clear that the belief which the officer should form in his mind is subjective belief on grounds which need not be disclosed and which are not subject to judicial review. But this case has been overruled in the case of The Assistant Collector of Customs and Ors. v. Charan Das Malhotra (supra). In this case, Mr. Chakravarty has categorically argued that the conditions precedent Under Section 110 of the Customs Act were duly satisfied. It was further contended by him that be it under the Customs Act or under the Gold Control Act, the act or action must be taken by the person authorised and in the instant case Customs officers being the Gold Control Officers, there was no illegality or any irregularity.

34. In any event, it was contended by him that there having no challenge to the seizure under the Gold Control Act, the petitioner should not be allowed to urge the same. The power to seize under the Gold Control Act is laid down in Section 66. It was also argued by Mr. Chakravarty that the determinations in the case of Assistant Collector of Customs v. Charan Das Malhotra (supra), in fact helps the Respondents, as reasonable belief in terms of Section 110(1) of the Customs Act, was duly formed at the time of seizure.

35. Mr. Chakravarty, then on a reference to Section 123 of the Customs Act, which deals with burden of proof in certain cases and to the following effect:

Section 123 : Burden of proof in certain cases -

(1) 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.

(2) This Section shall apply to gold, diamonds manufactures of gold or diamonds, watches, and any other class of goods which the Central Government may by notification in Official Gazette specify,

contended that since the subject goods were seized under the Customs Act, in the reasonable belief that they are smuggled goods, the onus was on the petitioner to prove that they were not so and since such onus has not been duly discharged by the petitioners, no interference should be made. This onus was stated, should have been discharged by the petitioners in terms of Section 123, before the adjudicating officer and the Section has application in respect of the items or articles as mentioned in Sub-section (2). It was also submitted by Mr. Chakravarty that since contrary was not proved in terms of Section 99 of the Gold Control Act, dealing with presumption as to the ownership of gold and which is to the following effect:

Section 99 : Presumptions as to ownership of gold. Any person who has in his possession custody or control any primary gold, article or ornament shall be presumed, unless the contrary is proved, to be owner thereof,

the petitioners were duly held and presumed to be the owners of the gold in question.

36. As mentioned hereinbefore, the determinations in the case of Ganeshmul Channilal Gandhi and Anr. v. Collector of Central Excise and Anr. Collector, Ban- galore (supra), is no longer good law and that was appropriately submitted by Mr. Ghosh, with reference to the determinations of the Supreme Court as referred to hereinbefore, amongst others. He also contended that if the seizure was not proper or was irregular, then in terms of the determinations in the cases of Wazir Chand and Anr. v. The State of Himachal Pradesh and Ors. - : 1954CriLJ1029 , the goods should be returned to the petitioners and that would also be the effect in case of a defective search in terms of the determinations in the case of Commissioner of Commercial Taxes, Board of Revenue Madras and Anr. v. Ramakrishna Srikishan Jhavar etc. (supra). These were also the contentions of Mr. Ghosh on the interpretation of the observation in the cases of Hindustan Aluminium Corporation Ltd. v. The Controller of Aluminium and Ors. (supra) and Pooran Mal v. Director of Inspector (Investigation), Income-tax, New Delhi and Ors. - . 931.T.R. 505. Mr. Ghosh, in effect contended on the basis of the determinations as referred to hereinbefore, that if and when the seizure was illegal or if the case was such, in respect of search, the subject goods were liable to be returned and they could neither be detained for enabling the authorities to have the defects rectified or to work out further evidence, nor in view such defective character, the petitioner could be asked to appear in the adjudication.

37. Mr. Ghosh sought to distinguish the cases as cited by Mr. Chakraborty, on facts. It was contended by him that for a proper search and seizure, some belief would be necessary and such belief or the formation to opinion on that basis, is conspicuously absent In this case. It was contended by Mr. Ghosh that the contentions of Mr. Chakravarty that there is no challenge under the Gold Control Act, would be correct. In fact, on a reference to the pleadings, he wanted to establish that due challenges against the seizure of gold under the Gold Control Act, would be correct. In fact on a reference to the pleadings, he wanted to establish that challenges against the seizure of gold under the Gold Control Act, have been thrown and furthermore, on a reference to Section 58 of the Gold Control Act, he contended that the authorisation in the instant case being not by the proper officer viz. by an officer below the rank of the Superintendent, the action as taken, was improper, void and unauthorised. He also contended on a reference to the authorisation order as disclosed with the supplementary affidavit, that authorisation was made Under Section 105 of the Customs Act and not under the Gold Control Act. In view of the above, Mr. Ghosh contended that thus the entire action was against the statute or the statutory requirements and in that event, even if the grounds have not been specifically taken, which is not the case, this court would be justified and authorised to interfere.

38. It was further contended by Mr. Ghosh that since this case was not one of a general search, so the onus could not be on the petitioners as alleged, but the same was on the Respondents, more particularly when they have alleged the subject goods to be smuggled goods. In support of these submissions, Mr. Ghosh referred to the determinations in in the case of Durga Prasad etc. v. H.R. Gomes, Superintendent (Prevention), Central Excise, Nagpur and Anr. (supra) and also argued that in that view of the matter, the arguments of Mr. Chakravarty, on Sections 123 and 124 of the Customs Act, would be of no avail or any assistance. Mr. Ghosh also submitted that there were no reasons to believe in this case, as the statements as produced, were after the seizure. This according to him showed and established that there was no formation of opinion before the search.

39. The possession and recovery of valuable as mentioned above are admitted and cannot be denied. It cannot also be denied that these valuables are unaccounted for articles, as they have neither been duly disclosed nor shown in the Wealth Tax Returns or any where and their source of acquisition could not be properly explained or established. The petitioners no doubt belong to a rich family and affluent class and perhaps in such community acquisition of such enormous wealth is possible and practicable, by way of gift and other dispositions or occasions, yet the fact remains that those valuables, which were claimed to have received on some auspicious occasions, have not been disclosed at any point of time or any where and such conduct would itself be enough to hold the belief or the basis to form the opinion of improper or irregular acquisition. In proceedings involving search and seizure, conduct of the party, against whom default is alleged, certainly plays a very important part and such conduct of the petitioners in the instant case, was not free from doubt or suspicion and in fact, such doubt or suspicion, which was entertained on informations, was amply proved and established on the subsequent recovery of the valuables on necessary search and seizure.

40. The question, on the pleadings as mentioned hereinbefore, would thus be to find out and answer, whether the search and seizure in the instant case, was properly held on due formation of opinion and if there was violation of principles of natural justice. The respective contentions of the parties, on those points, have also been recorded earlier. It is no doubt that there in the said search Order, the particulars of the said premises and not that of the Bank as involved or where the lockers were located were only mentioned. It is also true that while searching the said premises, the keys of the two lockers bearing Nos. 1882 and 1702, were ditected and found. The first locker as mentioned above, belonged to the petitioner Smt. Gayatri Davi Agarwalla and the other oneio the petitioners jointly. Section 105 of the Customs Act speaks of the search either by the Assistant Collector of Customs himself or to have such search conducted through other authorised Customs Officers and the provisionsjrf the Code of Criminal Procedure, 1898, relating to searches, so far as may be, would apply to searches Under Section 105, subject to the modification that Section 165(5) of the Code of Criminal Procedure shall have effect, as if for the word 'Magistrate' wherever it occurs, the words 'Collector of Customs' would be substituted. So, in terms of Section 165(5), copies of the records were required to be sent, forthwith to the Collector of Customs concerned, for taking cognizance of the offence and the owner or the occupier of the places searched viz. the said premises in this case, was entitled to be furnished with copies, by such Collector, provided the applicant paid for the same, which requirement could of course been waived for special reasons, and in that event, the copies could be supplied free of cost.

41. In this case, on the records as produced, there is no dispute about the initiation and authorisation Under Section 105 and the non-supply of copies as alleged, has lost all its effect, on the denial by the answering Respondents and more particularly when it has been claimed that the copies of the said order and records have been supplied. The search was admittedly initiated on informations and such act is possible and permissible. The fact that such valuables, not duly accounted for, were found and or unearthed, do establish the bona fides of the informations and the complicity of the petitioners in the matter which even inspite of due and necessary opportunities, could not be disproved. Proper acquisition of the valuables as involved, not having duly properly established, the action as taken and that too on the informations as disclosed, cannot be said to be improper. Since informations as alleged, would authorise the authorities concerned to search in the peculiar circumstances of the case, so they were also entitled to form the opinion and effect such search and thereafter, to seize the valuables in the circumstances as mentioned above or as involved.

42. It cannot also be doubted that since the authorisation specifically mentioned the search of the said premises, including the lockers and to seize the concerned valuables, so any one found to be involved in the matter, even through subsequently discovered or discovered consequent to the search, may be proceeded with and the valuables found in the possession of such person, may be seized. I am also of the view that Under Section 105 of the Customs Act, the authorities concerned would be authorised to search every places and seize valuable therefrom, if on the search of the original place, it appears that other valuables have been secreted elsewhere and not only at the place as mentioned in the original order. These search and seizer, in such facts, would be considered as a continuing action, flowing from the original order. There is no doubt that the power to search Under Section 105 of the Customs Act Is a general one and the word 'secreted' as used therein, would mean secreted improperly and without due disclosure at any place.

43. The word 'secreted' in Section 105, as observed in the case of Durga Prosad v. H.R. Gomes and Ors. (supra) would mean secreted at any place against the normal run of human conduct. If the valuables as discovered, were duly acquired, In compliance with the ordinary human conduct, it was expected that the petitioners would disclose them duly and in accordance with law, in appropriate returns under the relevant statutes and for such admitted non-disclosure, they may be considered to have acted against the nor- mal run of human conduct. I am also of the view that if the above construction to Section 105 of the Customs Act is not given, then the very object of the same would be frustrated and more particularly when the object of the Section is not to search for a particular document, but of documents or things, which may be useful or necessary for proceedings either pending or contemplated under the Customs Act. At that stage it Is not possible for the officer to predict or even to know in advance what documents could be found in the search or which of them may be useful or necessary for the connected proceedings. It is only after the search is made and the documents found therein are scrutinised, then their relevance or utility can be determined. To require, therefore, a specification or description of the documents in advance, is to misapprehened the purpose, for which the power is granted for effecting a search Under Section 105 of the Customs Act. The power of search granted under the Section is a power of general search. But it is essential that before the power is exercised, the preliminary conditions required by the Section must be strictly satisfied i.e. the officer concerned, as observed in the case of Durga Prosad v. Gomes (supra), must have reasons to believe that any document or things which, in his opinion, are relevant to any proceedings under the Act, are secreted in the place of search. Previous to the incorporation of Section 105, the power to issue such warrants was exercised Under Section 172 of the Old Act of 1878. The power to search of premises will now be exercised by the Assistant Collector of Customs, whereas formerly it was exercised by Magistrates, on the basis of the belief of a Customs Officer, in-charge of Customs station or the belief of an Assistant Collector of Customs. Under the Section the officers of Customs are empowered in their own right to make a search and that power would be analogous to that of a police officer empowered to search himself. Section 165 of the Code of Criminal Procedure lays down various steps to be followed in making a search. The recording of reasons is an important steps in the matter of search and to ignore it, is no ignore the material part of the provisions governing searches. Under Section 105 of the Customs Act, it is not possible to lay down precisely or exhaustively as to what constitutes 'reason to believe'. It would depend on various circumstances. The issue of a warrant and reason to believe for issue of the same, would involve amongst others, (1) Articles of search, (2) place in which they are secreted, (3) manner in which they are secreted, (4) person who is in possession of the articles of search or the place where they are secreted. It may be, that the information which the officers concerned have recorded against each of the items, are not precise or absolutely certain without any possibility of doubt. But still, if the information is such as to lead him to believe that articles of search are secreted in a place which is concrete, he may thereby have 'reason to believe' as contemplated in the Section. On the question of what constitutes 'reason to believe', the determinations in the case of Pukhraj v. D.R. Kohli : 1983(13)ELT1360(SC) , which was one under the provisions of the Sea Customs Act, may be conveniently looked into and considered. As stated earlier, Under Section 105 of the Customs Act, the Customs Officer can himself issue a warrant, if he himself has 'reason to believe'. He can, in fact, also do the act of issuing such war- rant, even where really he has no reason to believe, though he mentions in the warrant that he has reason to believe and such cases would be covered or come within the per- view of the present case. The word 'secreted' in terms of the determinations in Durgaprasad v. H.R. Gomes (supra), was considered and on the basis of such construction, the word must be understood in the context in which the word is used in the Section. In that context, it means 'documents which are kept not in the normal or usual place with a view to conceal them' or it may even mean 'documents or things', which are likely to be secreted.

44. The search Under Section 105 of the Customs Act, cannot be equated with the search Under Section 165 of the Code of Criminal Procedure and the submissions of Mr. Ghosh on this point, in my view, were not appropriate as the incidents of the two searches as mentioned above are distinctly different. The. revisions of the Sections as mentioned hereinbefore, on due consideration, read alongwkh the cases cited at Bar, leads to the irresistatde conclusion that the said two Sections are intended and in fact they are meant to meet two different situations and happenings and that apart, the procedure for putting the Sections into action, are not also absolutely similar.

45. I have already observed on the question of 'reason to believe' which certainly plays an important part in the matter of search and seizure. Those criterion would also apply Under Section 110, where the words 'Reason to believe' have also been mentioned in the Sections, is required to be formed on the subjective satisfaction of the officer concerned. This satisfaction, is of course, subject to or open to judicial review and the contentions contrary to the same, as put forward by Mr. Chakravarty, on the basis of the determinations in the case of Ganeshmul Chanailal and Ors. v. Collector of Central Excise (supra) would be of no substance, since they have been overruled in the case of The Assistant Collector of Customs v. Charan Das Malthotra -1983 ELT 1477. The condition precedent Under Section 110 and Section 105, is formation of the belief, which must again be that of a reasonable man and I do not find any justification in upholding the contentions of Mr. Ghosh that such belief was not duly formed in this case.

46. It is true that that be it under the Customs Act or the Gold Control Act, the actions must be taken by the persons or officers duly authorised and since Mr. Chakravarty has established that in the instant case, the Customs Officers were and are also the officers under the Gold Control, there would be no justification in holding that the search and seizure, was improper or irregular. Thus, I do not find any grave irregularity or illegality in the matter, for which, interms of the submissions of Mr. Ghosh, the search and seizure should be held there could be no cause or any occasion for the return of the seized goods in terms of the determinations in Wajir Chand and Anr. v. The State of Himachal Pradesh and Ors. (supra). It is of course true that if the search and the consequent seizure was illegal, Irregular, manifestly without jurisdiction and authority or defective, then in terms of the determinations as cited at the Bar and as mentioned hereinbefore, the subject goods would be liable to be returned and not otherwise.

47. It should also be noted that Under Section 99 of the Gold Control Act, there is a presumption of ownership attached to the gold as seized. Such presumption can of course be rebutted. But the petitioners, inspite of due opportunities, have not attempted to rebut the presumption and have failed to do so. Similarly, Under Section 123 of the Customs Act, when the subject goods were seized, considering them to be smuggled goods or on the reasonable belief of the same, the onus to disprove such fact, lay very heavily on the petitioners. But there again they have failed to discharge their required onus, even inspite of opportunities. In fact, the dealings and the conduct of the petitioners in this case, were obstructive all throughout.

48. On the basis of the unreported decision of B.N. Banerjee, J as mentioned hereinbefore and than the case of Radha Kissan v. State of Uttar Pradesh (supra), I find justification in contentions of Mr. Chakraborti that mere irregularities in the search or if there is no proper order for the same, would not vitiate the seizure. I also find that when unaccounted valuables have been found and/or unearthed and the onus ais required, has not been discharged at all, inspite of opportunities, the power of interference by this court should be used spairingty.

49. For the views as taken by me, I thus find that the contentions of Mr. Ghosh, so also the Rule, should fail and the same is thus discharged. There will be no order for costs.

50. The stay of operation of the order, as prayed for is refused.

51. In these two Rules, like the other namely, C.R.11445(w) of 1975, the petitioners have impeached the search and seizure initiated by the respondents concerned. The points involved in these Rules and so also (torn) the other Rules as mentioned, being the same, the order which I have proposed in C.R. 11445(w) of 1975, would govern these two Rules. These Rules are thus discharged. There will be no order as to costs.


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