BULLION MERCHANTS Vs. UNION OF INDIA

JUDGEMENT

(1.) This petition under Articles 226 and 227 of the Constitution of India challenges provisions of the Gold (Control) Act, 1968, being Parliament Act 45 of 1968 (hereinafter called the Act).

(2.) Petitioner No. 1is a registered Association and its members are dealers in bullions. The Petitioner No. 2 claims to be the President of the Association. Subesquently, other members of the Association have also been impleaded as petitioners to the present petition.

(3.) The petitioners are traders who deal in gold and silver bullion. Though in the writ petition challenage was made on a number of grounds and to many provisions of the Act. Mr. Aggarwal, appearing for the petitioners has confined his challenge to the following sections, namely. Section 10, Section 16(7), Section 27(7)(a);(8)(b). Section 28, Section 30, Section 35, Section 89. This was done advisedly, because subsequent to the filing of this writ petition, the Supreme Court had occasion to consider the validity of the Act in case Harakchand Ratanchand Bauthia etc. v. Union of Indict. The court held that the Act was within the legislative competence of the Parliament. The Act was held to be valid excepting sections 5(2)(b), 27(2)(d), 2 (6), 32, 45, 88 and 100 which were declared invalid. In pursuance of that judgment of the Supreme Court amendment was carried out in the Act. Again another challenge was made to the Act in case Badri Prasad v. Collector of Central Excise, Sarvoda nanagar., Kanpur especially to section 6, 18,16,58,7l Excepting Section 7l, which was held unconstitutional, the Court upheld the validity of other provisions. I shall deal with the challenge to the validity of various provisions in the order in which they were argued. Section 16(1) reauires every person who owns or possesses gold ornaments to make a declaration within the time specified in the prescribed form. Sub section (5) of Section 16 exempts any person from filing a declaration unless the total weight of articles possessed or held. controlled exceeds the quantity mentioned therein. Section 16(7), however, provides that every licensed dealer or refiner shall make a declaration or further declaration, as . the case may be, in accordance with the provisions of this section in relation to any gold owned, possessed, held or controlled by him in any capacity other than the capacity of a licensed dealer or refiner and the provisions of sub section (5) shall not apply to such gold. the grievance above is that while subsection (5) of Section 16 exempts a person who does not own control the minimum quantity mentioned therein, from filing a declaration, no such exemption is provided to the licensed dealer, resulting in discrimination between a licensed dealer and non licensed dealer in the matter of giving a declaration, and that it costs onerous burden on the former. I was referred to Section 27(7)(b) which provides that a licensed dealer shall not carry on business as such dealer in any premises other than specified in his licence and Section 33 was also referred to which provides that 'no licensed dealer shall keep in the premises where he carries on business as such dealer any primary gold, article or ornament which is not a pan of his stock-in-trade or held by him in capacity as a dealer and ever primary gold, ornament or article found in such premises shall be deemed to be a part of the stock-in trade of such dealer or held by him in his capacity as a dealer. The argument was that if the purpose of Section 16(7) was to prevent the dealer from keeping undeclared gold in the premises. Section 33 sufficiently safeguarded such as eventuality, because if any undeclared gold was found in the premises it shall be deemed to be stock-in-trade of dealer, I am afraid I do not appreciate the argument. Section 33 is covering a different eventuality. The gold that is found in the premises will be deemed to be a stock in trade, even if dealer was also given the advantage of exemption under Section 16(5). Even in such a case, if gold were found on the premises, the same will be treated as stock-in trade. The relevance of Section 27(b) and Section 33 to challenge the purposes of it from the constitutionality of Section 16(7) must fail, and is not tenable. There is every good and justifiable reason as to why requirements have been made for a licensed dealer to give a declaration of all the gold that he possesses even though even if it happens to be less than minimum provided in Section 16(5). The declaration required under Section 16(7) serves useful public purpose in as much as by requiring the dealers to declare all gold and ornaments owned or possessed or controlled by them would enable the authorities under the Act to plug any loophole by which a dealer may be able to keep any gold or ornaments clandestinely, and thus to have an effect control over them and prevent any smaggling. All these requirements of Section 16 for giving a declaration and of Section 33 to treat all gold found in the licenced premises as stock in trade are in public interest and to subserve the purposes of the Act. As said in A. 1. R. 1971 Supreme Court 1 170: