Allahbad High Court
R.B.MISRA
Kashinath Seth - Appellant
Versus
The Collector, Central Excise, Allahabad - Respondent
Decided On : 05/19/1975
CONSTITUTIONAL LAW - GOLD (CONTROL) ACT, 1968 - SECTIONS 71, 73, 74, AND 75 - CONSTITUTIONALITY - CHALLENGED - VIOLATION OF ARTICLE 19 OF THE CONSTITUTION - SECTIONS AMENDED - VALIDITY UPHELD - SEIZURE OF ENTIRE STOCK - ILLEGAL - RETURN OF ORNAMENTS DIRECTED.
Fact of the Case:
Petitioners, licensed gold dealers, challenged the constitutionality of Sections 71, 73, 74, and 75 of the Gold (Control) Act, 1968, alleging violation of Article 19 of the Constitution. The petitioners' business premises were raided, and ornaments were seized for alleged contraventions of the Act. The petitioners also challenged the seizure and subsequent notice to show cause why the goods should not be confiscated.
Finding of the Court:
The Court held that Sections 71 and 73, as amended, were intra vires and not violative of Article 19 of the Constitution. The amendments addressed the concerns raised by the Supreme Court in Badri Prasad v. Collector of Central Excise, which had declared the original provisions unconstitutional. The Court further held that the seizure of the petitioners' entire stock, including accounted-for items, was illegal and exceeded the powers granted under Section 66 of the Act.
Issues: 1. Whether Sections 71, 73, 74, and 75 of the Gold (Control) Act, 1968, violated Article 19 of the Constitution. 2. Whether the seizure of the petitioners' entire stock was legal and within the powers granted under Section 66 of the Act.
Ratio Decidendi: 1. The Court upheld the validity of Sections 71, 73, 74, and 75 of the Gold (Control) Act, 1968, as amended, finding that the amendments addressed the concerns raised by the Supreme Court in Badri Prasad v. Collector of Central Excise. The Court reasoned that the confiscation of property or imposition of fines for contraventions of the Act was not per se unreasonable and that the Legislature had the authority to impose severe punishments to combat smuggling and protect the national economy. 2. The Court held that the seizure of the petitioners' entire stock, including accounted-for items, was illegal and exceeded the powers granted under Section 66 of the Act. The Court relied on its earlier decision in L. Kashi Nath v. The Collector, Central Excise, Allahabad, which held that only those ornaments and articles of gold not accounted for in the petitioner's account books could be legally seized.
Final Decision: Writ Petition No. 6429 of 1971 was dismissed, and Writ Petition No. 563 of 1972 was allowed in part. The Court directed the respondents to return the ornaments seized from the petitioner forthwith.
2. In Writ Petition No. 6429 of 1971, petitioner no. 1 is a Partnership firm. It carries on the business in gold, ornaments and articles of gold under the name and style of M/s. L. Kashi Nath Seth, at Lucknow. The petitioner firm is a licensed dealer under the Gold (Control) Act, 1968. It is authorised to acquire ownership, possession, custody and control of gold, ornaments and articles of gold in accordance with the provisions of the Gold (Control) Act.
3. On 27th April, 1971, at about 11.00 A. M., the Superintendent of the Central Excise Department, Lucknow, and other officials along with other persons of the staff raided the business premises of the petitioner and conducted a search. During the course of search, the officials of the Excise Department found ornaments kept on the ground floor for sale for which there was no licence. They further found that the account books of the firm were not maintained for certain period and the forms prescribed under the Gold (Control) Act were also not maintained. One piece of foreign gold was found from the possession of one of the artisans working at the business premises of the petitioner. The officials of the Excise Department took into custody 2583 pieces of ornaments, which weighed 2151.370 grams. The petitioner protested against the search of premises and the seizure of the aforesaid goods, but the officials of the Excise Department did not release the goods. The petitioners, thereupon, filed a writ petition under Article 226 of the Constitution challenging the search and seizure of the ornaments from the shop. It was, later on, numbered as writ petition No. 2939 of 1971. The writ petition was eventually allowed by order dated 10th August, 1971. The decision in that case is reported in AIR 1972 All 16. In that case, this Court held that the respondents had seized the ornaments in respect of which no contravention of the Act was alleged or ascertained and that there was nothing on the record to show that the respondents had a reasonable belief that the particular ornaments, which had been seized, were those ornaments in respect of which contravention of the Act had taken place. Thus, in the absence of the existence of the condition precedent, the officials acted in excess of their authority in seizing the ornaments. Special Appeal filed against that judgment was also dismissed. The appellate judgment is also reported in AIR 1972 All 231.
4. In the meantime, the petitioner was given a notice dated 11th October, 1971, to show cause why the goods mentioned in the notice should not be confiscated under Section 71 of the Gold (Control) Act. The petitioners have come to challenge the said notice and the proceedings consequent thereto on the ground that Sections 71, 73, 74 and 75 of the Gold (Control) Act, 1968 are all ultra vires.
5. In writ petition No. 563 of 1972, the petitioner has also challenged the seizure besides the notice dated 19th January, 1972, to show cause why the goods mentioned in the said notice be not confiscated and the penalty be not imposed.
6. Thus, the question for consideration in the two writ petitions is whether Sections 71, 73, 74 and 75 are ultra vires being violative of Article 19 of the Constitution.
7. Shri S.N. Kacker, appearing for the petitioners, contended that Sections 71 and 73 were held unconstitutional by the Supreme Court in Badri Prasad v. Collector of Central Excise, AIR 1971 SC 1170. While dealing with the provisions of Sections 71 and 73 of the Gold (Control) Act, the Supreme Court observed as follows:-
"There does not however seem any justification for an order of confiscation of gold under Sect
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