BHOORMAL PREMCHAND Vs. COLLECTOR OF CUSTOMS MADRAS

JUDGEMENT

(1.) THIS is a petition under Article 226 of the Constitution for the issue of a writ of certiorari to quash the order of the Collector of Customs, Madras, directing confiscation of gold, weighing 305.56 tolas, of the value of Rs. 27, 500.40, belonging to the petitioner, under section 167(8) of the Sea Customs Act, 1878 read with section 23-A of the Foreign Exchange Regulation Act, 1947.

(2.) THE events that led to the order of confiscation are, briefly, as follows. THE petitioner is a bullion dealer at Bangalore, trading in the name of 'Jain Jewellers'. His employee, Ghevarchand, alighted at the Madras Central Station from the Express Train from Bangalore on 8th October, 1957, at about 4-30 p.m. He was intercepted by the police officers at the station, and, on search of his person, it was found that he was carrying a substantial quantity of gold in a piece of cloth tied round his waist. THE police officers detained the gold under a 'mahazar' and informed the Customs Department. On interrogation by the Customs Officers, Ghevarchand produced a manuscript letter written in the letter-head paper of 'Jain Jewellers', Bangalore, dated 8th October, 1957, and addressed to M/s. Amichand Nagindas, Jewellers, Madras. THE letter was in the following terms : "We have to-day sent along with Mr. Ghevarchand two pieces of gold, weight 305.56 approximately, which kindly take delivery and pay him the agreed price. Solicit the further order. Thanking you, ......' on 9th October, 1957, Amichand Nagindas was contacted by an Inspector of Customs, and Chunilal, the managing partner of that firm, gave a written statement, wherein he stated as follows :

(3.) AS a result of the enquiry, the Collector found that the actual quantity of gold seized on 8th October, 1957, from Ghevarchand was of the weight of 305.56 tolas consisting of four pieces of gold one block weighing 205.34 tolas, another block of 97.69 tolas and two small pieces weighing 2.53 tolas. The books of account with the petitioner examined by the Customs Authorities disclosed his stock position of gold as follows: (1) balance of stock of gold acquired from Bombay merchants-80 tolas approximately and (2) purchases from M/s. Hindustan Jewellery Mart- 235 tolas approximately. The case of the petitioner at the enquiry was that M/s. Amichand Nagindas placed orders of 300 tolas of gold at Rs. 104.50 per tola, that he agreed to fulfil that order and that he actually purchased a quantity of 235 tolas from M/s. Hindustan Jewellery Mart on 7th October, 1957, at Rs. 104.25 per tola. The rate at which the petitioner purchased from Hindustan Jewellery Mart would not be Rs. 104.25 per tola if the sales-tax paid by him were to be taken into account. Inclusive of the sales-tax paid, the rate would work out at Rs. 104.51 per tola. The selling rate of Rs. 104.50 to M/s. Amichand Nagindas was inclusive of sales-tax. The particulars of petitioners' purchase of gold, as revealed at the enquiry, are as follows : The contention urged on behalf of the petitioner was that it was out of this stock of gold which he held, that he despatched 305.56 tolas through Ghevarchand to Madras in compliance with the oral order of M/s. Amichand Nagindas placed to him on the phone. The Collector of Customs disbelieved the petitioner's case, and, applying the statutory presumption available under section 178-A of the Sea Customs Act, 1878, held that the gold seized was contraband. The Collector recorded his findings in these terms :