Judgment M.Y.Eqbal, J. 1. In this application petitioner has prayed for quashing the order dated 20.11.1997 passed in confiscation case No. 42/97 whereby respondent No. 2 Deputy Commissioner, Hazaribagh in exercise of power under Essential Commodities Act, confiscated the seized articles and further for quashing the appellate order dated 5.1.1999 passed by the Secretary, Food Supply and Commerce Department dismissing the appeal and confirming the order of the Deputy Commissioner. The aforesaid impugned orders have been filed and contained in Annexures 4 and 5 to the writ application. 2. Petitioner is a dealer in food-grains, Vanaspati oil, sugar, etc. having wholesale licence No. 10/HZB/96. It appears that on 3.10.1997 a raid was conducted in the business premises of the petitioner while some goods were being unloaded and certain goods were seized by the Inspecting Authority of Supply Department and thereafter, confiscation case No. 42/97 was initiated by respondent No. 2. It is alleged that the petitioner could not show any document in respect of the goods found in the premises and those goods had been stored for the purpose of evasion of sales tax, market-fee, etc. The goods were subsequently seized and seizure list was prepared and report was sent to the Collector for initiation of confiscation proceeding under Section 6-A of the Essential Commodities Act (in short "E.C. Act"). Petitioner said to have filed show cause giving details that he had licence to deal in the foodgrain, edible oil and free sale of sugar and that the stock of Vanaspati and edible oil was within the permissible limit. Petitioner has further stated in the show cause that mere excess of the articles beyond the permissible limit, is not an offence under Section 7 of the E.C. Act and mere allegation of black-marketing and profiteering does not make out a case under Section 7 of the E.C. Act. However, respondent No. 2 after hearing the parties passed the impugned order dated 20.11.1997 and order for confiscation of the seized articles. Petitioner preferred an appeal under Section 6(c) of the said Act before the Secretary, Food Supply and Commerce Department at Patna, for being confiscation appeal No. 38/97 which was dismissed on 5.1.1999. 3. Mr. T.R. Bajaj, learned counsel for the petitioner assailed the impugned order as being illegal and wholly without jurisdiction.
Petitioner preferred an appeal under Section 6(c) of the said Act before the Secretary, Food Supply and Commerce Department at Patna, for being confiscation appeal No. 38/97 which was dismissed on 5.1.1999. 3. Mr. T.R. Bajaj, learned counsel for the petitioner assailed the impugned order as being illegal and wholly without jurisdiction. Learned counsel firstly submitted that notice issued under Section 6(B) of the said Act was vague and there is nothing mentioned in the said notice as to on which ground the confiscation proceeding has been initiated. Learned counsel submitted that the notice simply alleged that the seized goods were stored for the purpose of black-marketing and profiteering which is violative of condition of Bihar Trade Articles (Licence and Unification) Order, 1984 or any order issued under Section or any order issued Under Section 3 of the E.C. Act. Learned counsel further submitted that no price has been fixed in respect of seized articles and therefore there is no question of black-marketing. Notice does not show that black-marketing and profiteering violates which clause of Unification Order. Learned counsel relied upon a decision of a bench of this Court in the case of Narayan Prasad and others V/s. State of Bihar, 1998 (2) PLJR 330 : 1998 (2) East Cr C 240. Learned counsel further submitted that impugned order passed by the then Deputy Commissioner and appellate authority are based on extraneous consideration. In this connection learned counsel relied up to the decision of this Court in the case of M/s. Md. Ayub Bismillah Rice & Oil Mills V/s. Collector of West Champaran and others, 1977 PLJR 64, and in the case of Bishwanath Prasad V/s. State of Bihar and another, 1998 (1) East Cr C 663. 4. Mr. P. Chandra, J.C. to S.C. 1 drawn my attention to the counter-affidavit filed by respondent No. 2 and submitted that confiscated goods have already been sold on the market price through PDS dealers. Learned counsel further submitted that the petitioner is habitual offender. The main person is Vishwanath Prasad, S/o Laxmi Sao, who used to obtain licence in the names of different members of the family and then indulged in the malpractices. Learned J.C. to S.C. 1 submitted that during the time of raid petitioner has failed to produce stock register and other documents to the satisfaction of the inspecting authority which clearly violates the provision of Unification Order.
Learned J.C. to S.C. 1 submitted that during the time of raid petitioner has failed to produce stock register and other documents to the satisfaction of the inspecting authority which clearly violates the provision of Unification Order. Learned counsel then submitted that the impugned order passed by the respondent-Authority is in accordance with law. 5. I have gone through the affidavit filed by the parties and consider the argument advanced by the learned counsel appearing for the parties. Annexure 10 is a copy of notice purported to have issued by the confiscating authority calling upon the petitioner to show cause in the confiscation proceeding. In the said notice, it was simply alleged that the petitioner was indulged in black-marketing and profiteering business which violates the provision of Unification Order, 1984. There is nothing mentioned in the notice as to which provision of the Unification Order has been violated. From perusal of the impugned order passed by the confiscating authority, it appears that the authority has recorded the finding that at the time of inspection it was found that the petitioner was not maintaining necessary register which means violation of conditions of licence. It has further been recorded in the order that the petitioner was engaged in black-marketing and profiteering business. The appellate authority has come to a finding that edible oil and vanaspati is free sale commodity and no statutory price can be fixed for selling of these items, therefore, question of black-marketing does not arise. However, the appellate authority observed that the purpose of the Essential Commodities Act is to prevent hoarding of essential commodities with a view to black-marketing during the time of shortage. The appellate authority therefore confirmed the order passed by the Magistrate. 6. Having heard learned counsel appearing for the parties and after going through the record, it is manifest that both the authorities have adopted incorrect procedure and applied wrong legal test in passing the order of confiscation in the proceeding initiated in the Essential Commodities Act. As noticed above the notice (Annexure 10) is vague. In the case of M/s. Md. Ayub Bismillah Rice & Oil Mills V/s. Collector of West Champaran and others, 1977 PLJR 64, a Division Bench of this Court has held that it is incumbent on the authority to disclose in the notice the grounds on which it is proposed to confiscate the essential commodity.
In the case of M/s. Md. Ayub Bismillah Rice & Oil Mills V/s. Collector of West Champaran and others, 1977 PLJR 64, a Division Bench of this Court has held that it is incumbent on the authority to disclose in the notice the grounds on which it is proposed to confiscate the essential commodity. If the grounds are not mentioned in the notice, it will not only be against the provision of Section 6-B of the Act, but also against the principles of natural justice. 7. In the case of Pritam Lal Yadav and others V/s. State of Bihar and others, 1982 PLJR 304, a Division Bench of this Court, reiterated the principle laid down by this Court and further held that in absence of any order fixing the price of particular commodity it cannot be held that the said commodity was being taken with the intention of selling the same in black market. 8. Be that as it may, so far as edible oil is concerned, it has been consistently held by this Court that Unification Order is not applicable. 9. Having regard to the entire facts and circumstances of the case, I am of the opinion that the impugned order passed by the respondent-authority cannot be sustained in law. This writ application is accordingly allowed and the impugned order passed by the respondent authority Annexures 4 and 5 are quashed. Respondents are directed to refund the sale proceeds of the seized articles, which was sold pursuant to order passed by this Court.