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Issues: (i) Whether the seizure and retention of the gold ornaments were valid under section 66 of the Gold (Control) Act when the officers had not checked the accounts and acted only on non-posting of the prescribed forms. (ii) Whether substituted ornaments, not specifically shown to be unaccounted for, could be seized under section 66 of the Gold (Control) Act.
Issue (i): Whether the seizure and retention of the gold ornaments were valid under section 66 of the Gold (Control) Act when the officers had not checked the accounts and acted only on non-posting of the prescribed forms.
Analysis: Section 66 required a reasonable belief that gold in respect of which a provision of the Act had been contravened was being seized. The seizure was made without verifying the vouchers and accounts, although the vouchers were available and a substantial part of the stock was later found to be accounted for. Mere non-posting of the prescribed forms did not, by itself, justify an indiscriminate seizure of the entire stock. The power under section 66 could not be used for a roving or fishing enquiry, and the materials before the officers did not establish a reasonable belief that the whole stock seized was unaccounted for or contraband.
Conclusion: The seizure and retention were not valid under section 66 and were unlawful.
Issue (ii): Whether substituted ornaments, not specifically shown to be unaccounted for, could be seized under section 66 of the Gold (Control) Act.
Analysis: Section 66 authorised seizure only of such gold in respect of which contravention was reasonably believed to exist. The Department seized equivalent ornaments merely because the original articles could not be individually identified, although the record showed that the seizure did not correspond to any established excess stock or proved unaccounted gold. The expression "such gold" could not be expanded to permit seizure of an unidentified substitute irrespective of whether it was accounted for. In the circumstances, the substituted ornaments were outside the permissible scope of seizure.
Conclusion: The substituted ornaments could not be validly seized under section 66.
Final Conclusion: The challenge to the seizure succeeded, and the departmental action was held to be without lawful authority.
Ratio Decidendi: A seizure under section 66 of the Gold (Control) Act is valid only when the officer has a reasonable belief, founded on relevant material and formed after due application of mind to the accounts, that the specific gold seized is in contravention of the Act; the power cannot be used for an indiscriminate or substitutive seizure on mere suspicion or for a fishing enquiry.
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