GANGADHAR NARASINGDAS AGARWAL AND ORS. Vs. THE UNION OF INDIA (UOI), REPRESENTED BY THE SECRETARY TO GOVERNMENT OF INDIA, MINISTRY OF FINANCE AND ORS.

JUDGEMENT

(1.) THESE writ petitions raise the same question and can be dealt with together. As the facts in all the petitions are similar, I will deal with W.P. No. 3949 of 1965. This petition is filed for the issue of Writ of prohibition prohibiting the respondents from taking any action in pursuance of the show cause notice dated 17th February, 1965 bearing Ref. No. S. Nos. 21 and 25 of 1965 issued by the Deputy Collector of Customs, Vizagapatnam.

(2.) THE respondents received information that Seth Durgaprakasa and his close relatives having their main business and residential premises at Tumsar and Nagpur had considerable quantity of hoarded gold, which had not been declared by them under the Gold Control Rules. Searches were conducted on 19th and 20th August, 1963, in the premises of the petitioners and several documents were seized. According to the respondents, the documents indicated that the petitioners committed offences punishable under Sea Customs Act, 1878 and Customs Act 1962 read with Foreign Exchange Regulation Act, 1947. It is stated that the documents showed that the petitioners had resorted to under -invoicing of Mineral Ores, particularly manganese ores to the extent of a few crores of rupees. In February, 1965, 53 show cause notices were issued to the petitioners, and 50 more subsequently. These related to the shipment of manganese ores from Vizagapatnam. According to the respondents, the extent of under -valuation is about Rs. 2,96,64,535. The show cause notice were issued by the Deputy Collector of Customs, Vizagapatnam, calling upon the petitioners to show cause in writing to the Collector of Customs as to why penalties should not be imposed upon them under Section 167(8) of the Sea Customs Act, 1878, for being persons concerned in the export of manganese ore from Vizagapatnam, in contravention of the restrictions and prohibitions, imposed under Section 19 of the Sea Customs Act, 1878 read with Section 12(1) and the notification No. 12(17)(F)1/47, dated 4th August, 1947 (as amended) issued thereunder and Section 23 -A of the Foreign Exchange Regulation Act, 1947. The writ petitions are filed praying for the issue of writ of prohibition prohibiting the respondents from further proceeding with the matter.

(3.) BEFORE setting out the contentions of the parties it is necessary to refer to the relevant provisions of the Foreign Exchange Regulation Act, 1947 and the rules and forms made thereunder, and the Sea Customs Act, 1878. The Foreign Exchange Regulations Act (VII of 1947), came into force on 25th March, 1947. The reasons for passing the Act are given in the preamble, as follows: