BABULAL AMTHALAL MEHTA Vs. COLLECTOR OF CUSTOMS CALCUTTA

JUDGEMENT

(1.) This application under Art.32 of the Constitution raises the question of the constitution of S. 178-A, inserted in the Sea Customs Act (VIII of 1878), by S. 14 of the Amending Act XXI of 1955, and the chief ground on which it is sought to be struck down is that it offends Art.14 of the Constitution. From the affidavits of both the parties to which there are annexures the following facts emerge:

(2.) The petitioner carries on business as a broker in diamonds and precious stones in Calcutta and according to him, he enjoys credit and reputation in the market as a well-known and respectable broker of such goods. On 4-5-1955, the, Rummaging Inspector (Intelligence) Customs House, Calcutta No.3 armed with a search warrant from the Chief Presidency Magistrate Calcutta, Respondent No.4, searched the residential room of the petitioner, situated at No. 32, Sir Hariram Goenka Street Calcutta, and after a minute search of the steel almirah in which according to the statement of the petitioner, he used to keep his stock in trade and finding none there questioned him as to where he had secreted the diamonds to which the reply given by him was in the negative. There upon a wall almirah, wherein washed clothes, and other articles were stored, was searched and therein in an old jacket 475 pieces of diamonds were discovered along with one piece of synthetic stone. A statement signed by him was taken from which we find that his explanation for the possession was that, Rs. 10,000/- worth of diamonds were received by him from M/s. Ratilal Amritlal, of 89 Zaveri Bazar, Bombay, and the rest were purchased locally in Calcutta. He did not remember the names, and address of the parties front whom the local purchases were made, nor did he have in his possession any documents covering the purchase. Thereafter the Rummaging Inspector escorted the petitioner to the Customs House where the Assistant Collector Customs asked him to produce evidence showing that the goods were not smuggled goods but were legally imported on payment of duty. The Assistant Collector then permitted the petitioner to go and gave him time till 7-5-1955, to produce evidence showing that the goods were imported on payment of customs duty and under a valid import licence. On the same day, i.e., 4-5-1955, a notice was served on the petitioner by the Customs authorities stating that there were reasonable grounds to believe that the goods seized by the Rummaging Inspector had been illegally imported into India and, therefore before further action was taken under Ss.167(8) and 167(39) of the Sea Customs Act, the petitioner should submit by 7-5-1955, any documents which might be in his possession showing that the goods in question were legally imported into India on payment of proper Customs duty and on production of a valid import trade control licence. It is also stated that if the goods were not imported by the petitioner, but were brought from another party he should submit by the same date any evidence in his possession showing the purchase of the goods. In answer to this, on behalf of the petitioner, M/s. S. K. Sawday and Company, a firm of Advocates, Calcutta, wrote to the Assistant Collector, Customs, on 7-5-1955, reciting the circumstances under which the petitioner came to be in possession of the seized articles alleging that in the circumstances the presumption of an offence having been committed in contravention of S. 86 of the Sea Customs Act attracting a punishment under S. 167(39) of the Sea Customs Act was unwarranted and requested to be furnished with a statement of the reasons for the seizure as soon as possible. The letter went on to request for ten days time for procuring and producing certificates etc. from the Bombay trade and Calcutta trade about the authenticity of the petitioner's business and also how he came to be in possession of the goods. Another, letter was written by the same firm of Advocates on 9-5-1955, the details of which it is necessary to refer. On 16-5-1955 a further letter was written enclosing two certificates and containing further particulars. This also reiterated the request for the supply of specific reasons for the seizure. On 23rd May 1955, the Assistant Collector replied to the Advocates informing them that the diamond in question were seized on reasonable suspicions that the same had been imported into India illegally and as such were liable to seizure under the Sea Customs Act. Further correspondence followed by a letter dated 20-6-1955, to which there was a reply on 25-6-1955, wherein there was a detailed reference to everything that had taken place till then and especially with regard to the earlier denial of the petitioner about there being any diamonds with him and the discovery of the same later on in a used jacket in a wall almirah. This is a comprehensive letter containing the justification for the proceedings taken by the search officers and finally the Assistant Collector observed that if the petitioner failed to submit a written explanation in time or did not appear before him when the case was fixed for hearing, the case would have to be decided on the basis of the evidence on the record without any further notice. On 1-7-1955, M/s. S. K. Sawday and Company wrote a further letter on behalf of the petition, reiterating their objections and showing why action should not be taken. This was followed by letters dated July 4 and 20, 1955. A personal hearing was granted on 21-7-1955, followed by a letter from the Advocates dated 22-7-1955. It is unnecessary for the present to elaborate the contents of these letters or to refer to the statement enclosed therewith from M/s. Ratilal Amritlal, Bombay.

(3.) The Collector of Customs thereupon, after considering the entire matter placed before him, passed an order dated 12-9-1955. which was despatched on 5-11-1955 containing an elaborate discussion of the various facts and circumstances and finally concluding that since the petitioner had failed to discharge to the onus under S. 178-A of the Sea Customs Act in respect of the diamonds seized on 1-5-1955, orders had been passed confiscating the same under Ss. 167(8) and 167(39) of the Sea Customs Act and that the confiscation would be absolute in terms of the provisions of Ss. 3(2) and 4 of the Imports and Exports (Control) Act, 1947. The reasons given in the above order were that the subsequent statements were contrary to what had been stated in the first instance, that at the time of the raid, an attempt was made to hide the diamonds in a suspicious manner and lastly that the petitioner was making statements which were in the nature of an afterthought, and not supported by facts. On account of these and other reasons the collector was of the opinion that the presumption under S. 178-A had not been rebutted. The order stated that an appeal against it lay to the Central Board of Revenue within three months of the date of the dispatch and also contained information as to the court fee stamps etc. which would have to be affixed. Without availing himself of that remedy the petitioner has come up to this Court by way of an application for a Writ under Art. 32 of the Constitution.