MOTILAL LALCHAND SHAH Vs. L.M. KAUL

JUDGEMENT

(1.) THIS is a petition under Articles 226 and 227 of the Constitution of India challenging the order of the Collector of Customs and Central Excise at Baroda, dated nil October, 1969 confiscating the Indian currency to the tune of Rs. 51,000/ - under Section 121 of the Customs Act, 1962. The said order came to be passed in the following circumstances : -

(2.) THE petitioner is a businessman dealing in silver and gold articles at Bombay. He had gone to Daman on August 22, 1968 and carried with him a sum of Rs. 51,000/ - and odd in cash. It is said that he had gone to Daman for purposes of finding out a suitable premises and for purchasing certain utility articles said to be available in Daman against the bills. But as he could not find any suitable property, nor he could purchase any utility articles against the bill, he was returning from Daman on August 24, 1968 at about 10 -30 P.M. in an hired private car bearing No. BMZ -4935 belonging to one Bhaskerrao Manchharam. There were two other persons travelling in the said car from Daman to Vapi. As the car approached Kunta cross -road, a Customs raiding party stopped the car as the riding party found the movements of the car to be suspicious and on the search of the car, a sum of Rupees 51,000/ - was found from under the driver's seat. After making a panchnama, the said amount was seized and the statements of the driver of the car and two other persons as well as of the petitioner were recorded by the Sub -Inspector of Customs Mr. Samuel. The statement of the petitioner was recorded in English and the statements of three other persons were recorded in Gujarati. On February 17, 1969, a show cause notice bearing No. VIII 10, 1355. 58 -6884 dated February 14, 1969, issued by the Assistant Collector of Customs, Surat, was served on the petitioner. The petitioner was called upon by the said notice that as it appeared to the Assistant Collector that the Indian currency of Rs. 51,000/ - seized from the car was the sale proceeds of smuggled goods, and hence, was liable for confiscation under Section 121 of the Customs Act of 1962, and whereas it further appeared to the Assistant Collector that the petitioner was a person dealing in the goods of foreign origin above said, knowing or having reason to believe that the said articles were liable to be confiscated under Section 121 of the Customs Act, 1962, he should show cause why a penalty should not be imposed on him under Section 112(b)(ii) of the said Act and also to show cause why the Indian currency should not be confiscated under Section 121 of the Customs Act, 1962. The petitioner was also required to inform the authorities, whether he wanted a personal hearing in the matter. The documents listed in the Annexure 'A' to the said notice were said to have been supplied to the petitioner. On the receipt of the show cause notice, the petitioner filed his written explanation by his statement of March 18, 1969, contending, inter alia, that the notice issued by the Assistant Collector was without jurisdiction and without application of mind to the facts of the case and denying that the amount seized from the car on August 24, 1968, represented the sale proceeds of smuggled goods at all as alleged. It was further denied by the petitioner that he was the person dealing with the goods of foreign origin as alleged in the notice. The petitioner made a specific grievance that no statements as shown in the Annexure to the said notice were supplied to him. It was further pointed out in the explanation in terms that the petitioner did not know English and the contents of the statement recorded by the Superintendent Mr. Samuel in English were not explained to him and he, therefore, denied that he had stated in the statement that he threw away the cash under the driver's seat of the car on the car being stopped by the raiding party. His explanation of the possession of such a considerable amount was that he had taken the money from Bombay to Daman and was bringing the same back when the same was seized from him. A personal hearing was given to the petitioner on May 9, 1969, when the petitioner appeared before the Collector of Customs at Baroda, along with his advocate. At the time of hearing when it was contended by the advocate of the petitioner that the statement and documents furnished to the petitioner did not disclose anything showing that the petitioner had dealt with any goods of foreign origin and that the Indian currency notes under the seizure were of the sale proceeds thereof, it was pointed out by the Collector hearing the matter, that the case of Department was not that the currency in question were the sale proceeds of the smuggled goods of the foreign origin, but the currency in question were obtained by the petitioner in disposal of 'silver' which the petitioner had brought from Bombay to Daman for purposes of it being exported from a place other than the land Customs Station or a Customs Port appointed for the loading of silver and the silver being prohibited goods, the petitioner has committed a Customs offence under Section 113 which made him liable under Section 121 of the Customs Act. The Advocate for the petitioner made a grievance that the notice as required under the Customs Act did not disclose the case as disclosed at the time of hearing, but however, as the Collector desired him to make his submission on the case of the department as clarified by him, the Advocate of the petitioner made further submissions and contended that the statements of the witnesses supplied to the petitioner did not suggest that the petitioner actually exported the silver or had taken any silver to Daman for purposes of export and that there was no restriction on sale of silver at Daman at the material time, though the petitioner had in fact sold the silver at Bombay. The Collector however relied on the Panchanama and the statement of one Babu Savlekar and found that (1) the Indian currency seized from the driver's seat in the car was thrown by the petitioner or seeing the Customs Officer; (2) the Indian currency seized was the sale proceeds of silver disposed of at Daman for an unauthorised export by the petitioner and, (3) that the petitioner was a person dealing with the unauthorised export of silver out of India. On these findings, the Collector of Customs passed an order under Section 121 of the Customs Act, 1962 directing that the Indian currency of Rs. 51,000/ - be confiscated and further imposed a penalty of of Rupees 5,000/ - on the petitioner under Section 114 of the said Act. The petitioner being aggrieved with the said order has come to this Court under Articles 226 and 227 of the Constitution of India for appropriate writs, orders, directions to quash and set aside the said order of the Collector and to direct the Collector to return Rs. 51,000/ - seized from the petitioner without any authority of law.

(3.) ON behalf of the Union of India, Mr. S. N. Shelat the learned/assistant Government Pleader, urged that from the evidence, it has been clearly established (1) that the petitioner took the silver from Bombay to Daman, (2) that he sold silver at Daman; (3) that the amount of Rs. 51,000/ - was the sale proceeds of silver at Daman; (4) that on search being made by the raiding party of the Customs Department the currency notes were thrown under the seat of driver of the car; and (5) the false explanation by the petitioner that he sold the silver at Bombay. It was, therefore, urged that the only irresistible inference is that the amount in question represented the sale proceeds of the smuggled goods which were disposed of and sold at Daman and, therefore, liable to confiscation under Section 121 of the Customs Act, 1962. In submission of Mr. Shelat the Collector was justified in relying on these five important circumstances from which the inference which has been drawn by the Collector was completely justified and, therefore, the order was perfectly a valid and a legal order. As regards the basis of the proposed action as disclosed in the show cause notice, it was submitted by Mr. Shelat that the petitioner has taken part in the proceedings after the case of the Department was further elucidated and clarified by the Collector and having once taken part in the proceedings after the case was clarified, it is not open for the petitioner now to contend that the order is bad on the principles of natural justice.