PADMANABHAN J.

The petitioner seeks a writ of prohibition restraining the first respondent, the ITO, Central Circle I, madras-34, from handing over the gold, gold articles and ornaments weighing 10, 395 grams of gold and 66.9 acts. of diamond seized from him on December 21, 1973. The facts of the case nay be stated briefly as follows :

The petitioner claims to carry on business in gunny bags. On December 21, 1973, his premises at 26/27, Ramanan Road, Madras, and the residence of his accountant, Vaidyanathan, at 11, Venkatesa Agraharam, Madras-4, were searched by the I. T. authorities under s. 132 of the I. T. Act. As a result of the search cash of Rs. 9, 93, 574 and gold, gold ornaments and diamond jewellery weighing 10, 395 grams of gold and 66.9 cts. of diamond were recovered from the premises. Besides, certain documents and records were also seized by the Assistant Director of Inspection. An order under s. 132 (5) of the I. T. Act was passed by the ITO. Under the said order, the first respondent estimated the alleged concealed income at Rs. 45, 06, 574 and levied a tax of Rs. 43, 61, 474. COnsequently, the order stated that all the assets that have been seized were being retained towards the tax as determined. The petitioner thereupon filed an appeal under s. 132 (11) of the I. T. Act. While so, the Central Govt. promulgated an order 8, 1975, the voluntary Disclosure of Income and Wealth Ordinance, 1975. The petitioner filed a declaration under s. 14 of the said Ordinance and disclosed a sum of Rs. 23, 00, 300 for the assessment years 1965-66 to 1974-75. In the said declaration, the petitioner included the value of the gold and gold ornaments weighing 10, 395 grams and diamond jewellery weighing 66.9 cts. The Commissioner accepted the disclosure subject to payment of tax. The petitioner then requested the first respondent and the Commissioner (Central), Madras, to appropriate the cash seized from his premises towards the tax and sell the items of gold and gold ornaments and diamond jewellery seized from his premises and appropriate the sale proceeds thereof also towards the tax. The first respondent agreed o the same. On the basis of the agreement arrived at between the petitioner and the first respondent the gold, gold ornaments and diamond jewellery were valued by Vummidi kannan of Vummidi Bangaru Chetty and Sons. While so, the second respondent, viz., the Collector of Central Excise, Madras, addressed a letter to the first respondent stating that the gold, gold ornaments and diamond jewellery seized by the I. T. department from the petitioner's premises should be handed over to him on the ground that the petitioner had committed in offence under s. 8 (1) of the GOld (Control) Act and that a case has been registered against the petitioner for contravention of the provisions of s. 8 (1) of the Gold (Control) Act. The first respondent, therefore, called upon the petitioner by his letter dated October 1, 1977, to show cause why the gold, gold ornaments and diamond jewellery should not be handed over to the second respondent as required by him. It is in these circumstances the petitioner has filed this writ petition for the issue of a writ of prohibition restraining the first responded from handing over the gold, gold ornaments and diamond jewellery seized from him to the second respondent.The first respondent has filed a counter-affidavit. The first respondent has admitted as substantially correct all the averments made by the petitioner in paras. 2 to 4 of his affidavit. However, the first respondent has stated that he would abide by any order that might be passed by this court.

Second respondent has filed a counter-affidavit. According to the second respondent, the petitioner had contravened ss. 8 (1) and 16 (1) and (5) of the Gold (Control) Act and the Customs Act, by possessing gold in excess of the quantity prescribed under the Act. The gold seized by the I. T. department, according to the second respondent, ca