Provisions of Section 12(2) when attracted.

These Writ Petitions raise the same question and can be dealt with together. As the facts in all the petitions are similar, I will deal with Writ Petition-No. 3948 of 1965. This petition is filed for the issue of a Writ of Prohibition for prohibiting the respondents from taking any action in pursuance of the show cause notice dated 17th February, 1965 bearing Ref. No. S. 21/25/65 issued by the Deputy Collector of Customs, Visakhapatnam.

The respondents received information that Seth Durgaprasad and his close relatives having their main business and residential premises at Tumsar and Nagpur had considerable quantity of hoarded gold, which had not been declared by theme under the Gold Control Rules. Searches were conducted on 19th and 20th August, 1963 in the premises of the petitioners and several documents were seized. According to the respondents, the documents indicated that the petitioners committed offences punishable under Sea Customs Act, 1878, read with Foreign Exchange Regulation Act, 1947. It is stated that the documents showed that the petitioners had resorted to under-invoicing of Mineral Ores, particularly Manganese Ores to the extent of a few crores of rupees. In February, 1965, 53 show cause notices were issued to the petitioners, and 50 more subsequently. These related to the shipment of Manganese Ores from Visakhapatnam. According to the respondents, the extent of undervaluation is about Rs. 2,96,63,353. The show cause notices were issued by the Deputy Collector of Customs, Visakhapatnam, calling upon the petitioners to show cause in writing to the Collector of Customs as to why penalties should not be imposed upon them under section 167 (8) of the Sea Customs Act, 1878, for being persons concerned in the export of Manganese Ores from Visakhapatnam in contravention of the restrictions and prohibitions, imposed under section. 19 of the Sea Customs Act, 1878, read with section 12 (1) and the Notification No 12 (17) F. 1/47 dated the 4th August, 1947 (as amended) issued thereunder, and section 23-A of the Foreign Exchange Regulation Act, 1947. The Writ Petitions are filed praying for the issue of Writ of Prohibition prohibiting the respondents from further proceeding with the matter.

It is alleged in the show cause notice that the goods were exported without making; in respect thereof a proper declaration to the effect that their full export value had. been paid in the prescribed manner as required under section 12 (1) of the Foreign. Exchange Regulation Act, 1947, read with the relevant notification No. 12 (17) ‘F. 1/47, dated the 4th August, 1947 (as amended) issued thereunder and the Foreign Exchange Regulation Rules, 1952. It was further alleged that the goods had been exported in contravention of the restrictions and prohibitions imposed under section 19 of the Sea Customs Act, 1878, read with section 12 (1) and the notification. No. 12 (17) F. l/47, dated the 4th August, 1947 (as amended) issued thereunder and section 23-A of the Foreign Exchange Regulation Act, 1947, which exportation constitutes an offence liable to be punished under section 167 (8) of the Sea Customs Act, 1878.

Before setting out the contentions of the parties it is necessary to refer to the relevant provisions of the Foreign Exchange Regulation Act, 1947 and the Rules and Forms made thereunder, and the Sea Customs Act, 1878. The Foreign Exchange Regulation Act (VII of 1947) came into force on 25th March, 1917. The reasons for passing the Act are given in the Preamble, as follows:-

" Whereas it is expedient in the economic and financial interests of India to provide for the regulation of certain payments, dealings in foreign exchange and securities and the import and export of" currency and bullion..."

Section 12 (1), which the petitioner is alleged to have contravened, may be set out:

" Payment for exported Goods.- (1) The Central Government may, by notification in the Official Gazette, prohibit the taking or sending out By land, sea,