1982 (2) TMI 176 - HC - Customs

Court Upholds Confiscation Orders under Gold Act, Emphasizes Legal Authority, Sufficiency of Evidence

PANNA LAL Versus UNION OF INDIA AND OTHERS

PANNA LAL Versus UNION OF INDIA AND OTHERS - 1986 (23) E.L.T. 103 (Raj.) Issues Involved:1. Legality of the seizure and confiscation of gold under the Gold (Control) Act, 1968.2. Validity of the show cause notice and subsequent adjudication process.3. Applicability of Section 73 of the Gold (Control) Act regarding the option to pay a fine in lieu of confiscation.4. Comparison between the treatment of seized gold and silver.5. The necessity of making a declaration under Section 16(5)(b) of the Gold (Control) Act.Issue-wise Detailed Analysis:1. Legality of the Seizure and Confiscation of Gold:The petitioner was found in possession of 9 pieces of primary gold weighing 463.430 grams, which were seized under Section 66 of the Gold (Control) Act, 1968, and the silver under Section 110 of the Customs Act, 1962. The Deputy Collector, Central Excise and Customs, Jaipur, held that the petitioner contravened Section 8(1) of the Gold (Control) Act by possessing primary gold without lawful means. The petitioner's defense that the gold was melted from his wife's ornaments was disbelieved due to lack of evidence, including the failure to produce the Dalal who allegedly facilitated the melting. The Collector and the Central Government upheld this finding, confirming the confiscation under Section 71 and imposing a penalty under Section 74 of the Gold (Control) Act.2. Validity of the Show Cause Notice and Subsequent Adjudication Process:The show cause notice issued on October 26, 1974, under Section 79 of the Gold (Control) Act, informed the petitioner of the grounds for confiscation and penal action. The petitioner argued that he was not given an opportunity to explain the writings on the weighment slip, which were used to infer that the gold was smuggled. However, the court found that the main charge was the possession of primary gold in contravention of Section 8(1), and the petitioner had been given ample opportunity to defend himself. The authorities' concurrent findings against the petitioner were based on sufficient evidence, and the court held that there was no need for a fresh show cause notice.3. Applicability of Section 73 of the Gold (Control) Act:The petitioner contended that an option to pay a fine in lieu of confiscation should have been given under Section 73. The court noted that such a decision is discretionary and that the petitioner had not made this request before the Collector or the Central Government. The court also observed that the request seemed motivated by the increased value of gold since the seizure. Therefore, the court rejected this contention, emphasizing that the confiscation was legal and the discretionary power was not exercised arbitrarily.4. Comparison between the Treatment of Seized Gold and Silver:The petitioner argued that the silver seized under the Customs Act was released, while the gold was confiscated, suggesting inconsistency. The court clarified that the gold was confiscated under the Gold (Control) Act, which has different provisions and requirements than the Customs Act. The possession of primary gold in contravention of Section 8(1) of the Gold (Control) Act justified the confiscation, independent of the treatment of the silver.5. The Necessity of Making a Declaration under Section 16(5)(b) of the Gold (Control) Act:The petitioner argued that no declaration was required for the gold as its weight was below 2,000 grams. The court rejected this argument, stating that the provision applies only if the gold pieces were indeed melted from the wife's ornaments. Since the authorities established that the gold was not from the wife's ornaments, the requirement for a declaration was not applicable.Conclusion:The court dismissed the writ petition, upholding the orders of confiscation and penalty. The court found no merit in the petitioner's contentions, affirming the legality of the actions taken by the authorities under the Gold (Control) Act. The court emphasized that its role under Article 226 of the Constitution of India was not to act as an appellate body but to ensure that the authorities' decisions were based on sufficient evidence and within their jurisdiction.