1964 Supreme(Cal) 3

HIGH COURT OF CALCUTTA
Banerjee, D. Basu,
MANGALA PROSAD ALIAS MANGALA PROSAD SINGH - Appellant
Versus
V. J. MANERIKAR - Respondent
.   Of  .
Decided On : January 3, 1964

The burden of proving that seized goods were smuggled goods lies on the Customs authorities, and not on the person from whose possession the goods were seized, unless the goods fall within the ambit of Section 178a of the Sea Customs Act, 1878, or are notified by the Central Government under that section.

Headnote:

CUSTOMS ACT - Confiscation of goods - Burden of proof - Section 178a of the Sea Customs Act, 1878 - Applicability - Goods seized from possession of petitioner - Petitioner not importer but purchaser - Onus on Customs authorities to prove that goods were smuggled - Theory of 'offending goods' rejected - Confiscation order set aside.

Fact of the Case:

The petitioner, a trader, had his office and godown searched by the police, and certain tins of foreign-made dyes and other articles were seized. The petitioner was arrested on a charge of retaining stolen properties but was discharged after a long investigation. While the police investigation was ongoing, a Deputy Superintendent of Land Customs applied before the Additional Chief Presidency Magistrate, under Section 180 of the Sea Customs Act, praying that the seized goods be delivered to the Customs Department. The Magistrate granted the prayer and the Customs Department took possession of the seized goods from the police. The petitioner applied before the Magistrate to recover possession of the goods after his discharge but the prayer was refused. The petitioner was issued a notice by the Superintendent of Land Customs to show cause why penalty should not be imposed upon him and why the seized goods should not be confiscated under the provisions of the Sea Customs Act and the Imports and Exports (Control) Act, 1947. The petitioner showed cause, denying the allegations and stating that he was a bona fide purchaser of the seized goods. The Assistant Collector of Land Customs, after a hearing, confiscated the goods under Section 167(8) of the Sea Customs Act, as made applicable under Section 3(2) of the Imports and Exports (Control) Act, observing that the petitioner could not produce any documents to show the licit importation of the goods into India. The petitioner challenged the confiscation order by way of a writ petition under Article 227 of the Constitution.

Finding of the Court:

The Court held that the burden of proving that the goods were smuggled goods was on the Customs authorities and that the onus did not shift to the person from whose possession the goods were found, as Section 178a of the Sea Customs Act, which placed the burden of proof on the person from whose possession the goods were seized, was not applicable in the instant case. The Court further held that the theory of 'offending goods', which suggested that the goods themselves were liable to confiscation without the need to establish that they were unlawfully imported, was not tenable. The Court found that the Customs authorities had failed to prove that the seized goods were smuggled goods or that the petitioner had purchased or acquired the goods with guilty knowledge of their illicit importation. Accordingly, the Court set aside the confiscation order and allowed the petitioner's writ petition.

Issues: 1. Whether the burden of proving that the seized goods were smuggled goods lay on the Customs authorities or on the petitioner, from whose possession the goods were seized. 2. Whether the theory of 'offending goods', which suggested that the goods themselves were liable to confiscation without the need to establish that they were unlawfully imported, was tenable.

Ratio Decidendi: 1. The Court held that the burden of proving that the goods were smuggled goods lay on the Customs authorities, as Section 178a of the Sea Customs Act, which placed the burden of proof on the person from whose possession the goods were seized, was not applicable in the instant case. The Court reasoned that Section 178a was a statutory exception to the general rule that the burden of proof lies on the prosecution to prove the guilt of the accused, and that it was only applicable to goods specified in sub-section (2) of Section 178a or to goods notified by the Central Government under that sub-section. Since the seized goods in the instant case were not specified in sub-section (2) of Section 178a or notified by the Central Government, the burden of proof remained on the Customs authorities to establish that the goods were smuggled goods. 2. The Court rejected the theory of 'offending goods', holding that it was not tenable in the absence of any statutory provision to that effect. The Court reasoned that the confiscation of goods under Section 167(8) of the Sea Customs Act was dependent on the establishment of the offence specified in the first column of that section, which required proof that the goods had been imported into India contrary to the prohibition or restriction imposed by or under Chapter IV of the Act. The Court held that the mere fact that the goods were of foreign manufacture and belonged to a class of goods whose importation was prohibited or restricted did not justify their confiscation without proof of unlawful importation.

Final Decision: The Court allowed the petitioner's writ petition, set aside the confiscation order, and directed the Customs authorities to return the seized goods to the petitioner.