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1973 Supreme(Cal) 23
HIGH COURT OF CALCUTTA
T. K. Basu
SUMANLAL PAREKH - Appellant
Versus
COLLECTOR OF CENTRAL EXCISE AND CUSTOMS, W. BENGAL - Respondent
Matter 395 Of 1971
Decided On : JANUARY 24, 1973
The Customs Authorities have no jurisdiction to initiate proceedings under Section 8 (1) of the Gold Control Act, 1968, in respect of articles that are 'ornaments' within the meaning of the Act.
Headnote:
GOLD CONTROL ACT - SECTION 8 (1) - JURISDICTION - PRIMARY GOLD - ORNAMENT - SEIZURE - VALIDITY - WRIT OF CERTIORARI - JURISDICTIONAL FACT - COLLATERAL FACT - CUSTOMS AUTHORITIES - POWER TO SEIZE - AUTHORISATION - DEFENCE OF INDIA RULES, 1962 - SECTION 116 (2) - INTERPRETATION - WRIT OF MANDAMUS - RECALL AND CANCELLATION OF SHOW-CAUSE NOTICE.
Fact of the Case:
The petitioners, Sumanlal Parekh and Ram Chandra Varma, challenged a notice issued under Section 8 (1) of the Gold Control Act, 1968, alleging that they had contravened the provisions of the Act by acquiring and possessing primary gold in the form of 50 pieces of semi-finished churis. The petitioners claimed that the churis were finished ornaments and not primary gold, and that the Customs Authorities had no jurisdiction to initiate proceedings under Section 8 (1) of the Act.
Finding of the Court:
The Court held that the essential precondition for the operation of the provisions contained in Section 8 (1) of the Act is that the article in question must be primary gold. The Court further held that the question whether the article in question is 'primary gold' or not is a jurisdictional fact, and if the authorities assume jurisdiction on a wrong finding of the collateral fact, the Court can correct that error in exercise of its high prerogative jurisdiction.
Issues: 1. Whether the Customs Authorities had jurisdiction to initiate proceedings under Section 8 (1) of the Gold Control Act, 1968, in respect of the articles seized. 2. Whether the articles seized were 'primary gold' or 'ornaments' within the meaning of the Act.
Ratio Decidendi: 1. The Court held that the Customs Authorities had no jurisdiction to initiate proceedings under Section 8 (1) of the Act because the articles seized were not 'primary gold' but 'ornaments'. 2. The Court interpreted the definition of 'primary gold' in Section 2 (r) of the Act and the definition of 'ornament' in Section 2 (p) of the Act, and held that the articles seized were 'ornaments' because they were in a finished form and meant for personal adornment.
Final Decision: The Court allowed the petition, quashed the impugned notice, and issued a writ of mandamus directing the respondents to forthwith recall and cancel the show-cause notice dated the 24th April 1971 and forbear from giving effect thereto in any manner whatsoever.
( 1 ) IN this application the petitioners Sumanlal Parekh and Ram Chandra Varma challenge a notice dated 24th April 1971. The opening paragraph of the notice is in the following terms:--"whereas, on the evidence indicated in the enclosed Sheets, there is reason to believe that you have contravened the provisions of the Gold Control Act. 1968, inasmuch as you acquired and had in your possession, custody or control, primary gold in the form of 98 pieces of semi-finished churis weighing 2,000 grammes valued at Rs. 38,000 (approx) in violation of Section 8 (1) of the Gold (Control) Act, 1968. "
( 2 ) IT may be mentioned at this stage that out of 98 pieces of churis which are mentioned in the paragraph indicated above 50 pieces form the subject-matter of the present application and 48 pieces form the subject-matter of another application being matter No. 397 of 1971 (Pankaj Parekh and Ors. v. Collector of Central Excise and Customs, West Bengal and Ors. ).
( 3 ) ACCORDING to the petitioner No. 1 he carries on business under the name and style of Messrs. Jai Hind Jewellers at No. 143. Cotton Street. Calcutta, and has been holding a licence granted under Section 27 of the Gold Control Act. 1968 (hereinafter referred to as the Act) authorising it to carry on business as dealer in gold ornaments and the licence has been renewed from time to time. On or about the 13th July. 1970. one Himatmal Shah of Bombay sent a demand draft of Rs. 20,000 through the Dena Bank of Bombay to Messrs. Jai Hind Jewellers for the purpose of purchasing some gold ornaments through the petitioner No 1. Acknowledgment receipt of the said demand draft for the sum of Rs. 20,000 was duly received by the said Himatmal Shah. Thereafter on the 2nd August 1970. the petitioner No. 1 went to Bombay and gave delivery of 50 pieces of gold churis weighing 1 kg. along with Gold Control Vouchers and bills for the same.
( 4 ) SOME time in October 1970. the said Himatmal Shah returned those gold bangles to Messrs. Jai Hind Jewellers as the designs of the ornaments were not up to the satisfaction of his family. According to the petitioner, the said 50 pieces of gold bangles were sent through the insured postal parcel under receipt No. 900 dated 24th October 1970. through the General Post Office of Bombay to Messrs. Jai Hind Jewellers. Sri Himatmal Shah also sent alone with the said insured parcel a letter in Gujarathi language written to the petitioner No. 1 re-questing him to change the design of 50 pieces of bangles as shown by a out piece of sample made of bronze.
( 5 ) ACCORDING to the petitioner on the 26th October 1970. the petitioner No. 2 went to Burrabazar Post Office to collect the said insured parcel. After he had collected the said parcel he was intercepted by the Customs Officers who wrongfully seized the said insured parcel containing 50 pieces of gold churi.
( 6 ) ALTHOUGH several contentions have been raised on behalf of the petitioner challenging the notice to show cause issued under Section 8 (1) of the Act. the principal challenge is on the basis that the authorities had no jurisdiction or power to initiate any proceeding under Section 8 (1) of the Act in respect of the articles which have been seized by them. In order to appreciate this contention it would be necessary to look at some of the relevant provisions of the Act.
( 7 ) T. Section 8 (1) of the Act under which the proceedings have been taken provides as follows:--"8. (1) Save as otherwise provided in this Act no person shall- (i) own or have in his possession, custody or control, or (ii) acquire or agree to acquire the ownership, possession, custody or control of, or (iii) buy, accept or otherwise receive or agree to buy, accept or otherwise receive any primary gold. "it is clear from the above provisions that it contains a prohibition, save as otherwise provided in the Act against any person owning or having the possession, custody, control or agreeing to acquire or accept or ot
