Superintendent, Customs and Central Excise v. Chandroo alias Ram Chandra
1976-08-23
G.C.MATHUR, K.C.AGRAWAL
body1976
DigiLaw.ai
JUDGMENT K.C. Agarwal, J. (for self and for G.C. Mathur, J.) 1. The officers of the Customs and Excise Department searched the house of the Respondent No. 1 on October 4, 1974 and seized several items of gold and silver which are enumerated in Annexure 3' to the counter-affidavit. These articles were found kept by the authorities in two locked steel boxes and one gunny bag and three dibias. Apart from the silver ornaments and silver, the details of the articles of gold are these : Primary gold....21 gms. Gold ornaments...1501 gms. 2. Before any show cause notice was issued to the Respondent to show cause against the proposed action, the Respondent No. 1 filed an affidavit on 20-11-1974 stating that the two boxes found in his possession were received from Chhotey Lal and Sangam Lal Respondents No. 2 and 3, for safe custody, and that articles kept in these boxes did not belong to him. Sangam Lal also filed an objection before the authorities asserting that the gold and silver ornaments seized by the authoritie: belonged to him, and that they had been kept with Respondent No. 1 for safe custody. It however, appears that the Customs and Excise Authorities, thereafter, issued a notice, which is Annexure 3' to the counter-affidavit, on March 31, 1975, calling upon the Respondent No. 1 against the action proposed to be taken against him for the contravention of Sections 8, 61 and 27 read with Sections 71, 74 of the Gold Control Act, 1968. In this notice, the case taken by the Department was that the fact of possession of primary gold by Respondent No. 1 along with other articles of gold ornaments indicated that the Respondent No. 1 was carrying on business of gold dealer without obtaining a licence, as required by Section 27 of the Act. It seems that instead filing a reply to the aforesaid notice, Respondent No. 1 along with Respondents No. 2 and 3 rushed to this Court and filed the writ petition, giving rise to the present appeal, for a writ of mandamus directing the authorities to hand over the gold, and gold and silver ornaments, which had been seized from possession of Respondent No. 1 on October 4, 1974. 3.
3. The main ground on which the writ petition was filed was that as the quantity of primary gold and gold ornaments possessed by Respondent No. 1 was less than the prescribed limits he was entitled to the return of the same. With regard to silver and silver ornaments, the case of Respondent No. 1 appears to be that as Customs and Excise authorities had no authority to seize these items under the Gold Control Act, the seizure of these items was illegal. The learned Single Judge accepted the case of the Respondent No. 1, holding that quantity of primary gold and gold ornaments found in possession of Respondent No. 1 being within the prescribed quantities u/s 16(5), the Respondent No. 1 was entitled to their return. As he was also of the opinion that the seizure of silver and silver ornaments was not authorised, he held, that the Respondents No. 1 was entitled to get back the same. Aggrieved, the Customs and Excise Department has filed the present appeal. 4. The submission made on behalf of the Appellants before us was that as the Act completely prohibits the possession of primary gold, the view taken by the learned Single Judge that Respondent No. 1 could lawfully keep 21 gms. of primary gold is erroneous. It was further urged, that as the Respondent No. 1 was carrying on the business of a gold dealer without obtaining licence, the authorities were entitled u/s 71 to take action against him for the breach of Section 27. 5. The word 'gold' has been defined in Gold Control Act as including primary gold. 'Primary Gold' as defined in clause (r) Section 2 of the Gold Control Act means any gold in any unfinished or semi-finished form. Section 8 of the Act imposes restrictions on acquisition, possession and disposal of gold Sub-Section (1) of Section 8 lays down that no person shall own or have in his possession, custody or control any primary gold. Thus the restriction imposed by Section 8(1) being in absolute terms, possession of primary gold by any person would be in contravention of Section 8 of the Gold Control Act. Accordingly, it appears to us that the possession of primary gold by the Respondent No. 1 being illegal, the authorities could lawfully proceed under the Gold Control Act.
Thus the restriction imposed by Section 8(1) being in absolute terms, possession of primary gold by any person would be in contravention of Section 8 of the Gold Control Act. Accordingly, it appears to us that the possession of primary gold by the Respondent No. 1 being illegal, the authorities could lawfully proceed under the Gold Control Act. Section 16(5) relied upon by the learned Single Judge only permits an individual to possess, own certain quantity of gold articles and gold ornaments without filing a declaration required by sub-Section (1) and (3) of Section 16. It enables an individual to keep articles within certain limits. The word 'article' has been defined in Section 2(a). This clearly excludes primary gold from its definition. Hence the possession of primary gold by the Respondent No. 1 could not be justified under this provision. 6. The view of the learned Single Judge that the quantity of primary gold found in the possession of Respondent No. 1 was less than the prescribed limits appears, to us, to be against the provisions of the Act. 7. So far as gold ornaments are concerned the case of the Customs and Excise Department was that the Respondent No. 1 was carrying on business of a gold dealer without obtaining licence as required by Section 27 of the Gold Control Act. It therefore necessitated a finding as to whether the Respondent was a gold dealer or not. The Respondent No. 1 was in fact, not even claiming that he was the owner of gold ornaments. To the contrary, his case was that these ornaments did not belong to him. 8. In our view, the question involved in this case was one of fact and that without deciding the same, neither was the learned Single Judge nor are we in a position to hold that the seizure of the gold ornaments by the Customs and Excise authorities was illegal. It cannot be disputed that if the Respondent No. 1 was a gold dealer he ought to have obtained a licence. Prima-facie therefore, the proceedings started against him cannot be said to be illegal. In this background, it appears to us that the learned Single Judge was not right, in holding that seizure of gold ornaments was unauthorised simply on the ground that the quantity of these ornaments found from the premises of Respondent No. 1 was within the prescribed limits.
Prima-facie therefore, the proceedings started against him cannot be said to be illegal. In this background, it appears to us that the learned Single Judge was not right, in holding that seizure of gold ornaments was unauthorised simply on the ground that the quantity of these ornaments found from the premises of Respondent No. 1 was within the prescribed limits. 9. The only other question that remains to be examined is about silver and silver ornaments. Admittedly Gold Control Act was enacted to reduce internal demand for gold and to establish barriers to circulation of smuggled gold within the country. It has nothing to do with silver or silver ornaments. Apparently, therefore, the seizure of these items is unauthorised. It is settled that a body acting under a statute can exercise only that right which is conferred on it by such a statute. Accordingly, the seizure of silver and silver ornaments being without the authority of law, the Respondent No. 1 is entitled to its return. Counsel for the Appellants, however, urged that as the primary gold and gold ornaments were secreted in silver ornaments in two steel boxes found in the possession of Respondent No. 1 they are liable to confiscation u/s 21 of Gold Control Act. We are not, however, satisfied with this argument. Simply because these ornaments were kept with silver ornaments, that could not establish that they were secreted in silver or silver ornaments. Sub-Section (3) of Section 71 can apply only to a case when any gold liable to confiscation under sub-Section (1) is mixed with other goods in such manner that gold cannot be separated from those other goods. In the present case, there are no such allegations. According to the allegations of the Department, the silver and silver ornaments had only been kept with the gold ornaments found from the possession of the Respondent No. 1. Hence, the direction of the learned Single Judge for the return of silver and silver ornaments does not call for any interference. 10. In the result, the appeal succeeds partly and is partly allowed. The judgment of the learned Single Judge directing the Appellants to return gold and gold ornaments is quashed, and the writ petition of the Respondents is dismissed to that extent. In the circumstances of the case, we direct the parties to bear their own costs.