COL SAWAI BHAWANI SINGH Vs. UNION OF INDIA

JUDGEMENT

(1.) The Petitioners state that they are members of the Hindu Undivided Family ("HUF") of late Maharaja Sawai Man Singhji (hereafter late "Maharaja"). By this petition they have challenged the validity of an order dated 31st March 1981 passed by the Department of Revenue, Ministry of Finance, Government of India under the provisions of the Gold (Control) Act, 1968 ("GCA") disposing of their revision application. The impugned order holds that the confiscation of 11.512 kg of gold coins and ornaments forming part of Lakshmi gold buried in the foundation of Moti Doongri Palace and of 644 gold coins to be unsustainable in law. The penalty of Rs. 5 lakhs imposed on Petitioner No. 1 Col Sawai Bhawani Singh, as the karta of the HUF, was remitted. However, the seizure and confiscation of the remaining gold was sustained and the fine, in lieu of confiscation of such gold, was reduced from Rs.1.5 crores to Rs.80 lakhs. To that extent the Petitioners were still aggrieved and therefore filed this petition. Background Facts

(2.) Between 11th February 1975 and 13th June 1975, the officers of the Income-tax Department acting under the authorization of the Director of Inspection (Investigation), conducted searches under Section 132 of the Income Tax Act 1961 ("IT Act") at various premises at Jaipur belonging to and/or occupied by the members of the erstwhile ruling family of Jaipur, including the petitioners. The authorized officers came across considerable quantities of gold in the form of coins, bars, sovereigns, pieces as well as in the form of articles/ornaments including studded and unstudded jewellery. On coming to know of this find, the Gold Control Officers of Jaipur also associated themselves with the search operations. They had search warrants under Section 58 (2) of the GCA. Gold coins, sovereigns, gold bars/mohars, studded and unstudded gold ornaments, gold biscuits with foreign markings, primary gold, two broken pieces of articles of gold and gold coins/mohars/sovereign issued by different rules of erstwhile Indian States were also seized from the ground pit and cupboards of the Moti Doongri Palace (Takht-i-Shahi) and from beneath and corner of the Moti Doongri Strong Room, Raj Bagh Palace and from Rajmahal Palace. The total quantity of gold seized was 867 kgs. 961.200 grams. Apart from this, 1728 silver coins weighing 19 kgs 878 grams were also seized. The Collector 's order

(3.) Two separate show cause notices were issued to the Petitioners under the GCA. The first order dated 22nd August 1975 was in respect of gold weighing 867.961.200 kgs and silver weighing 19.878.000 kgs. The second show cause notice dated 3rd September 1975 was in respect of gold weighing 27.145.500 kgs and silver weighing 1.172.75 kgs. After replies were filed to the show cause notices, the Collector of Central Excise and Customs passed an order dated 7th November 1977 holding that the Petitioners had contravened Sections 8 and 16 GCA and had therefore rendered themselves liable to penal action under Section 74 GCA. A penalty of Rs. 5 lakhs was imposed on the Petitioner No.1 Col. Sawai Bhawani Singh in his capacity as the karta of the HUF (Incidentally Col. Sawai Bhawani Singh is also arrayed as Petitioner No.2 herein in his individual capacity). The Collector ordered not to take any penal action against Smt. Gayatri Devi and Shri Jai Singh, Petitioner Nos. 3 and 4 respectively, since both of them in their replies stated that Petitioner No.1 was the karta of the HUF and as such he represented all of them. The Collector also ordered the confiscation of the primary gold, gold articles and gold ornaments weighing 895.106.780 kg seized from the different palaces belonging to the parties and mentioned in the two show cause notices under Section 71 GCA. It was directed that the seized gold would however be released and handed over to the owner on payment of a fine of Rs.1.50 crores in lieu of confiscation under Section 73 GCA. The option to redeem the same had to be exercised within three months from the date of receipt of the order. After redemption, the primary gold, except gold mohars and other gold articles of ancient origin and historical interest, were permitted to be sold to a licensed dealer or got converted into ornaments. A certificate has to be furnished by the owners within one month of taking back the gold into their possession. As regards the gold mohars and other gold articles of ancient origin and historical interest, they were not to be melted but registered with the competent authorities under the Antiquities & Treasures Act 1972. The Administrator 's order in appeal