The burden of proving that seized goods are not smuggled goods lies on the person from whose possession the goods were seized, where there is reasonable belief that the goods are smuggled goods.

This is a petition under Article 226 of the Constitution for the issue of a writ of certiorari to quash the order of the Collector of Customs, Madras, directing confiscation of gold, weighing 305.56 tolas, of the value of Rs. 27, 500.40, belonging to the petitioner, under section 167(8) of the Sea Customs Act read with section 23-A of the Foreign Exchange Regulation Act, 1947.

2.The events that led to the order of confiscation are, briefly, as follows. The petitioner is a bullion dealer at Bangalore, trading in the name of 'Jain Jewellers'. His employee, Ghevarchand, alighted at the Madras Central Station from the Express Train from Bangalore on 8th October, 1957, at about 4-30 p.m. He was intercepted by the police officers at the station, and, on search of his person, it was found that he was carrying a substantial quantity of gold in a piece of cloth tied round his waist. The police officers detained the gold under a 'mahazar' and informed the Customs Department. On interrogation by the Customs Officers, Ghevarchand produced a manuscript letter written in the letter-head paper of 'Jain Jewellers', Bangalore, dated 8th October, 1957, and addressed to M/s. Amichand Nagindas, Jewellers, Madras. The letter was in the following terms :

"We have to-day sent along with Mr. Ghevarchand two pieces of gold, weight 305.56 approximately, which kindly take delivery and pay him the agreed price. Solicit the further order. Thanking you, ......' on 9th October, 1957, Amichand Nagindas was contacted by an Inspector of Customs, and Chunilal, the managing partner of that firm, gave a written statement, wherein he stated as follows :

'I state I have not placed any order with M/s. Jain Jewellery; the gold in question cannot be either for me or to my firm. I have no communication from that party, namely, Jain Jewellers, Bangalore." *

3.The petitioner himself arrived in Madras on 9th October, 1957, and gave a statement to the Customs Authorities. He stated that the gold was despatched from Bangalore in pursuance of an oral contract between him and M/s. Amichand Nagindas entered into through the medium of the trunk phone, that the gold was purchased by him in India, Bombay and Bangalore, that the purchase was supported by bills and by his own account-books and that he would produce them on 15th October, l957. Apparently, the bills and the account-books were produced before the authorities, nevertheless, a show cause notice was issued on 19th October, 1957, asking the petitioner to show cause why the gold should not be confiscated under the provisions of the Sea Customs Act and the Foreign Exchange Regulation Act. The petitioner submitted a written explanation, dated 25th October, 1957, alleging that the gold was purchased by him from well-established and reputed merchants, as per bills already produced by him before the authorities. On 17th November, 1957, the Collector of Customs took the view that the gold seized was smuggled gold, and that under section 178-A of the Sea Customs Act, the onus of proving that it was not contraband was upon the petitioner. The petitioner presented a number of applications to the authorities for the release of the gold. There was a regular enquiry by the Collector, in which the petitioner was represented by counsel. The petitioner wanted a copy of the statement given by Chunilal of M/s. Amichand Nagindas and Co., and a copy was given. It must be mentioned that the authorities obtained a second statement from Chunilal on 21st December, 1957. In this statement, he affirmed the statement already given by him on 9th October, 1957, and submitted that it was impossible for a Madras bullion merchant to purchase gold from Bangalore, as Madras merchants as well as Bangalore merchants purchased only from Bombay merchants and as the Bangalore merchants could not sell at a price which would be economical for a Madras dealer to purchase with a view to trade. He denied that he had placed any order with M/s. Jain Jeweller