TaxTMI 
TaxTMI 
TaxTMI 
1991 (12) TMI 270
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.... the certificate granted by Assistant Collector, Central Excise, Amritsar, dated 8-3-1973 has been filed and marked as Annexure-l. Under the Gold (Control) Rules (hereinafter to be referred as the Rules) every licensed dealer has to maintain accounts under Rule 11 and the details have to be filled up in form G.S. 12. The case of the petitioners, further, is that some of the petitioners left Amritsar on 3-1-1981 with gold ornaments weighing 4482.750 grams and reached Kanpur and there they sold 79.600 grams to a licensed dealer named Kashi Jewellers and 203.200 grams to another licensed dealer of the same place, namely, Society Jewellers. On 9-1-1981 the petitioners' firm purchased 636.700 grams of gold ornaments from Lakshmi Jewellers, Coimbatore, and, thus, the petitioners' firm was in possession 4836.650 grams of ornaments. Some of the petitioners came to Patna and on 10-1-1981, 1101 grams of gold were sold to Alankar Jewellers and the remaining gold ornaments weighing 3735.650 grams were kept in locker No. 64, which was hired by petitioners Nos. 3 and 4 and their brother Pradeep on 31-7-1978 (Annexure-3), of Allahabad Bank, Rajendra Nagar Branch, Patna, by petitioner No. 4. The r....
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....ure-9). It is stated in the application that in spite of various reminders the authorities were not releasing the gold ornaments which have been illegally seized by them. In paragraph No. 23 of his application some allegation was made against respondents Nos. 3 and 4 but the learned Counsel at the time of hearing sought permission to delete the paragraph and the prayer was allowed. 3. Mr. S.N. Kakker, learned Counsel appearing on behalf of the petitioners, has contended that the search and seizure is an inroad into the fundamental right of the petitioners and the power of seizure has been illegally exercised under section 66 of the Act without any material and is, therefore, wholly without jurisdiction. He has, therefore, submitted that the search and seizure being illegal, the petitioners are entitled for the return of those ornaments. Learned Senior Standing Counsel, appearing on behalf of the Department has submitted that from the facts mentioned in this application no illegality on the part of the Department has been shown by the petitioners and the authorities had reasonable belief that the provisions of the Act have been contravened and in that view of the matter, they ....
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....onferred on them under the Act. In other words, if it is found that the seizure itself is without jurisdiction it will be neither proper nor justifiable to ask the petitioners to avail of the alternative remedy and from the views expressed in the decisions mentioned above it is clear that the petitioners are also entitled to relief if they can succeed in their submissions, under Article 226 of the Constitution of India irrespective of the existence of an alternative remedy. The preliminary objection raised on behalf of the respondents, therefore, fails. 5. It will be necessary to examine in detail the facts of Allahabad case to see whether it can be pressed into service on the facts and circumstances of the instant case, in aid of the petitioners. Before going to that I will briefly refer to some of the provisions of the Act which are relevant for the purpose of this case. 6. The Gold Control Act was enacted in 1968 and the preamble reads as follows: "An Act to provide in the economic and financial interests of the community for the control of the production, manufacture, supply, distribution, use and possession of and business in, gold, ornaments and articles of gold ....
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....r Section 78. Opportunity has to be given before passing any order under Section 79. Any person aggrieved by the order can prefer an appeal before the higher authorities under Section 80 and there is also a provision for revision. Chapter XV prescribes the procedure for the offences and their trial. Any person, who contravenes the provisions of the Act, is liable for prosecution under Section 85 and under Section 87 punishment is provided for an offence for failure to submit returns or to maintain the accounts under the provisions of the Act and the Rules framed thereunder. Persons who contravened are tried by Magistrate exercising first class powers under Section 98. 7. After having given the scheme of the Act I will briefly deal with the facts of the Allahabad case on which strong reliance has been placed by Mr. Kakker. The Officers of the Excise Department having learnt from confidential sources searched the business premises of Kashinath Jewellers, Lucknow, who was a licensed dealer, and seized gold ornaments which weighed 22151.370 grams. Against that seizure a protest was made but the Department did not release the goods. Thereafter writ was preferred before the Allahab....
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....ve to act strictly according to law." The decision of the learned single Judge was upheld on appeal and the case is reported in the same volume at page 231. There lordships interpreted the word "Reason to believe" occurring in different statutes. Under the Income-tax Act the same phrase has been interpreted in the Calcutta Discount Co. Ltd. v. Income Tax Officer (A.I.R. 1961 Supreme Court 372); S. Narayanappa v. Commissioner of Income Tax, Bangalore (A.I.R. 1967 Supreme Court 523) and Sheo Nath Singh v. Appellate Commissioner of Income Tax (Central) Calcutta (A.I.R. 1971 Supreme Court 2451). Under Section 110 of the Customs Act their Lordships relied on the decision of Assistant Collector of Customs v. Charan Das Malhotra (A.I.R. 1972 Supreme Court 689); Haji Ahmad Haji Esak & Co. v. Commissioner of Income Tax, Bombay City (A.I.R. 1951 Bombay 299) and Deoki Nandan v. M.L. Gupta (23 Sales Tax Cases, Allahabad, 481) under the U.P. Sales Tax Act and Collector of Customs, Madras v. Sampathu Chetty (A.I.R. 1962 Supreme Court 316) under the Sea Customs Act and on a consideration of those decisions it has been held that the condition precedent for application of Section 66 is the reasona....
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....f Pokhraj v. D.R. Kohli, Collector of Central Excise (A.I.R. 1962 Supreme Court 1559) gold and gold ornaments were seized from the possession of a passenger of a train who was travelling without ticket. The possession of gold in large quantity gave the officers sufficient material to hold that the action of the aforesaid passenger was not bona fide and he was also travelling without ticket so that his identity may not be disclosed. In that view of the matter, it was held that the officer, had sufficient reason to seize the gold ornaments. The facts of that case have absolutely no semblence with the facts of the case under consideration where the gold ornaments were recovered from a locker which was taken on hire by a licensee who was dealing in gold. The other cases, relied upon, are on similar line and need not be considered in detail. 9. On a consideration of the scheme of the Act, and the decisions, referred to above, with special reference to the provisions relating to search and seizure, I am of the opinion that Section 66 of the Act hedges in such powers conferred on the authorities and that has to be exercised strictly in accordance with law. It is also not disputed th....