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Allahbad High Court
K.N.SINGH
L. Kashi Nath - Appellant
Versus
The Collector, Central Excise, Allahabad - Respondent
Decided On : 08/10/1971
GOLD CONTROL ACT, 1968 - SEIZURE OF ORNAMENTS - JURISDICTION - CONDITIONS PRECEDENT - SECTION 55 AND 66 - INTERPRETATION - ALTERNATIVE REMEDY - WRIT PETITION - MAINTAINABILITY.
Fact of the Case:
The petitioner, a partnership firm carrying on business in gold ornaments and articles of gold, was licensed under the Gold Control Act, 1968. On 27th April, 1971, the Superintendent of the Central Excise Department and other officers took a search of the petitioner's business premises and seized 2583 pieces of ornaments weighing 22151.370 grams. The petitioner challenged the search and seizure by filing a writ petition under Article 226 of the Constitution.
Finding of the Court:
The Court held that the petitioner contravened Section 55 of the Gold Control Act, 1968 by failing to maintain accounts as required by the Act and the rules. However, the Court also held that the seizure of the petitioner's entire stock of ornaments, including those which were accounted for in the account books, was illegal and without jurisdiction. The Court further held that the respondents did not have a reasonable belief that the particular ornaments which were seized were those ornaments in respect of which contravention of the Act had taken place.
Issues: 1. Whether the petitioner contravened Section 55 of the Gold Control Act, 1968? 2. Whether the seizure of the petitioner's entire stock of ornaments was legal and within the jurisdiction of the respondents? 3. Whether the petitioner had an adequate alternative remedy and, therefore, was not entitled to relief under Article 226 of the Constitution?
Ratio Decidendi: 1. The Court held that the petitioner contravened Section 55 of the Gold Control Act, 1968 by failing to maintain accounts as required by the Act and the rules. The Court interpreted Section 55 to require a licensed dealer to make entries in the registers and forms prescribed under the Act contemporaneously when the dealer buys or acquires, sells or transfers gold. The Court rejected the petitioner's argument that the words 'as and when' in Section 55 did not require posting of the accounts contemporaneously. 2. The Court held that the seizure of the petitioner's entire stock of ornaments, including those which were accounted for in the account books, was illegal and without jurisdiction. The Court interpreted Section 66 of the Act to require that only those ornaments and articles of gold could be seized in respect of which the Gold Control Officer had reason to believe that the provisions of the Act had been contravened. The Court held that the respondents did not have a reasonable belief that the particular ornaments which were seized were those ornaments in respect of which contravention of the Act had taken place. 3. The Court held that the petitioner had an adequate alternative remedy under the Act by way of filing an appeal and revision, but that the existence of an alternative remedy did not oust the jurisdiction of the High Court to grant relief to the petitioner in an appropriate case. The Court held that this was an appropriate case to grant relief to the petitioner under Article 226 of the Constitution as the seizure was without jurisdiction and the petitioner's fundamental right to property was violated.
Final Decision: The writ petition was allowed and the respondents were directed to return back the ornaments to the petitioner forthwith.
2. The Collector, Central Excise, Allahabad, Superintendent Gold, Lucknow and Superintendent Technical, Lucknow are opposite parties in the writ petition. According to the counter affidavit of Assistant Collector, Central Excise, the Department received reliable information that the petitioner was dealing in foreign gold and, therefore, a raid was organized to find out the truth of the information received. On 27th April, 1971 a raiding party consisting of Sri G. Bhusan, Superintendent, Central Excise, Lucknow, Miss Dolly Saxena and Sri A.C. Srivastava raided the petitioner's business premises under a search authorisation issued under Section 105 of the Customs Act, 1962, by the Assistant Collector, Central Excise, Lucknow. During the raid the officers of the Excise Department found 275 pieces of gold ornaments from the ground floor portion of the petitioner's shop which was not a part of his licensed premises and for which he had not applied even for a licence. A piece of foreign gold was recovered from the possession of one Shaukat Husain who was working on the second floor of the licensed premises of the petitioner. The repair register, Gold Control Forms and Stock Registers were not maintained as required by Section 55 of the Gold Control Act read with Fees and Miscellaneous Matter Rules, 1968.
Forms Nos.GS-10, GS-11 and GS-12 were not maintained in accordance with law, inasmuch as Form GS-10 was found written upto 18th April, 1971 and no entries were made for the period from 19th April, 1971 upto 26th April, 1971. Form GS-11 was manitained upto 17th April, 1971 and no entries were made therein for the subsequent period. Form GS-12 was maintained in respect of 71 items only upto 1st April, 1971. In respect of two items it was maintained upto 11th April, 1971 and thereafter no entries were made. Form GS-12 was further maintained in respect of two items only upto 17th April, 1971 and in respect of four items accounts were written upto 18th April, 1971. The petitioner firm failed to maintain register of artisans at all as required in Form GS-14. In view of these allegations and irregularities, petitioners' stock of ornaments was seized under Section 66 of the Gold Control Act. Excise Department proposes to investigate into the entire case and to issue show cause notice to the petitioner under Section 79 of the Gold Control Act and to adjudicate the matter under Section 78 of the Act. The search and seizure according to the opposite parties was done in accordan
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