The order of confiscation of gold by the Customs Authorities was legal as there was material to support the Collector's finding that the gold was of foreign origin and had been imported in contravention of the Foreign Exchange Regulations Act.

Judgement

AYYANGAR, J.: This appeal comes before us by virtue of leave granted by this Court under Art. 136 (1) of the Constitution and is directed against the judgment and order of the Punjab High Court by which a Writ Petition filed before it by the appellants under Art. 226 of the Constitution was summarily dismissed.

2. The point raised for our consideration relates to the legality of an order of confiscation, by the Customs Authorities, of certain gold belonging to the appellants on the ground of its being smuggled. The appellants are the partners of a Joint Hindu Family firm carrying on business in Bombay in inter alia gold and jewellery. On September 14, 1954 the appellant-firm had despatched to the Bombay Bullion Refinery for the purpose of melting about 500 tolas of gold. Certain Customs Officers received information that some quantity of gold which was believed to be smuggled was being sent to the refinery for melting and in pursuance of this information they went to the refinery and found the gold bullion which is the subject of these proceedings placed in a crucible for the purpose of being melted. These officers ascertained from the Manager of the refinery that this gold belonged to the appellant-firm who were later contacted and who admitted their ownership of the gold. The gold was thereupon seized and investigation started for ascertaining whether the gold was or was not smuggled gold after which the Assistant Collector of Customs issued a notice to the appellants on January 31, 1955 to show cause why the gold should not be confiscated under S. 167 (8) of the Sea Customs Act. The appellants appeared in response to this notice and were granted a personal hearing, their Counsel being heard in support of their plea that the gold was not smuggled and so not liable to be confiscated. Their defence was, however, rejected and the Collector of Customs who adjudicated in this matter under S. 182 of the Sea Customs Act passed an order on August 25, 1955 directing the confiscation. From this order appeals and revisions were preferred which were unsuccessful. Thereafter the appellants filed a Writ Petition before the High Court of Punjab with the result already stated.

3. It will be seen from the above narrative that the case is not covered by Section 178-A of the Sea Customs Act which was enacted by Central Act 21 of 1955 since the seizure and the proceedings in this case were long anterior to the enactment of that section and cannot obviously be governed by its provisions. For the reason that Section 178-A was in force at the stage of the appeals from the order of the Collector of Customs to the Central Board of Revenue and the Central Government and possibly under the impression that their case had been decided by throwing on them the burden of proving that the gold was not smuggled, the appellants raised in their Writ Petition to the Punjab High Court points regarding the construction and constitutionality of S. 178-A. When their petition was summarily dismissed these points were repeated in the petition for special leave to appeal filed in this Court, and special leave appears to have been granted mainly for the reason that the appeal involved the question of the constitutionality of S. 178-A of the Sea Customs Act. The appeal has for that reason been posted for hearing after the decision of this Court in Collector of Customs, Madras v. N. Sampathu Chetty, Civil Appeals Nos. 408 to 410 of 1960, etc., dated 25-9-1961 (not yet reported): (now reported in AIR 1962 SC 316), in which the validity of this section was considered and upheld.

4. Section 178-A being put aside, it may be added, the only question now arising for decision is whether the order of the Collector of Customs holding the appellant s gold seized at the refinery to be smuggled gold so as to be liable to confiscation under S. 167 (8) of the Sea Customs Act is vitiated by any error such as to call for interference under Art. 226 of the Constitution. Section 167