LADUBHAI GOVINDJI ZAVERI Vs. T C SETH

JUDGEMENT

(1.) This is a petition under Article 226 of the Constitution. The 1st respondent who is the Collector of Central Excise and Land Customs, Bombay has made an order dated 15th June, 1959 ordering the confiscation of certain gold and levying a personal penalty of Rs. 10,000 upon the second petitioner. By this petition the petitioners have challenged the validity of that order and asked for a writ certiorari for quashing that order and a writ of prohibition against the respondents from taking any steps in the enforcement or execution of the said order and for a writ of Mandamus ordering the respondents to withdraw or cancel the said order. The second respondent is the Union of India. The 1st petitioner is the mother of the second petitioner. It is stated in the petition that the 1st petitioner in the year 1943 received certain gold from her husband who has since died. That gold was in the shape of ornaments. The second petitioner carries on the business of a goldsmith in partnership in the firm name and style of Messrs. Natwarlal Govindji Zaveri, in Bombay and has a jewellery shop at Matunga, Bombay. According to the petitioners, in December, 1957 the 1st petitioner gave to the second petitioner gold weighing approximately 520 tolas for being melted and converted into bars. The second petitioner then had the said ornaments melted in his shop and converted the gold into three bars. The second petitioner thereafter handed over the three bars to the 1st petitioner in whose possession the same remained. In April, 1958 the 1st petitioner wanted to advance a loan of Rs. 60,000 to one Shamji Vishram who is the uncle of the second petitioner. As the loan was to be advanced, the 1st petitioner on the 28th April, 1958 gave the said three bars of gold to the second petitioner for sale. The second petitioner in order to obtain better value for the said gold had the said three bars sent to the National Refinery at Zaveri Bazar, Bombay on 25th April, 1958 through his employee, one Chhotalal P. Bhimani. The said Chhotalal took the said three bars to the said National Refinery and there handed over the said bars to be melted down and recast into one bar. Thereafter when the said Chhotalal was waiting at the National Refinery the officers of the Customs Department apprehended Chhotalal and subsequently seized the said gold. Thereafter the 1st respondent issued a show cause notice, dated 22nd October, 1958 against both the petitioners and the said Chhotalal. The said show cause notice recites that the said gold appeared to have been imported into India and was not covered by a licence as required by the Government of India, Ministry of Finance Notification No. 12(11) F. 1/48, dated 25th August, 1948 (as amended), issued under Section 8(1) of the Foreign Exchange Regulations Act, 1947 that the Notification is deemed to have been issued under Section 19 of the Sea Customs Act and that the actions of the petitioners and the said Chhotalal attracted the operation of Section 167(8) of the Sea Customs Act and calls upon each of the two petitioners and the said Chhotalal to show cause why a penalty should not be imposed and the said gold should not be confiscated under Section 167(8) of the said Act. By their Attorney's letter dated 15th January, 1959 the petitioners showed cause against the said show cause notice. Thereafter the 1st respondent granted to the petitioners and the said Chhotalal a personal hearing on 27th May, 1959 and ultimately issued his said order dated 15th June, 1959. The various grounds of challenge to the said order are contained in Paragraph 11 of the petition.

(2.) The respondents in the affidavit in reply filed on their behalf have raised a preliminary objection as to the maintainability of this petition which is contained in Paragraph 3 of the affidavit. That preliminary objection is that there are adequate remedies by way of appeal and revision provided for under the Sea Customs Act and that without recourse to the said remedies the petitioners are not entitled to file this petition. In Paragraph 11(c) of the petition, however, the petitioners challenge the validity of Section 178A of the Sea Customs Act. Because of that challenge to the validity of the said section of the Sea Customs Act, it must be held that the said preliminary objection is not tenable. Of course, as regards that challenge to the validity of that section so far as I am concerned, I am bound by the judgment in Pukhraj V/s. D.R. Kohli,1959 61 BLR 1830. In view of that judgment, which is a judgment of a Division Bench of this Court, the point was not even canvassed before me as, so far as I am concerned, I must hold that the said Section 178A is not invalid by reason of the provisions contained in Article 19(f) and (g) of the Constitution.

(3.) Mr. Sorabji, the learned Counsel for the petitioners, contended that the 1st respondent who conducted the inquiry in this case has not in fact invoked the provisions of the said Section 178A. He contended that, therefore, the burden of proof that the gold in question was not smuggled gold was not on the petitioners but was on the Customs Department. Now, it has been held in the said Pukhraj' s case that what is enacted in Section 178A is a rule of evidence and whether it can or should be invoked or not is to be determined by the officers conducting the inquiry, whether the seized goods should be confiscated and whether any personal penalty should be levied under Section 167(8). It has also been held in Pukhraj' s case that that inquiry begins with the show cause notice. Now, the show cause notice in this case gives no indication whatever that Section 178A was or was likely to be invoked. I should not be understood to hold that the show cause notice itself must in every case state that the officer conducting the inquiry intends to invoke the provisions of that section in the case in which that show cause notice has been issued. I am merely noting it as a matter of fact. In contrast it cannot go unnoticed that the show cause notice issued in the said Pukhraj' s case did state, as appearing from Page 1232 of the said report, that the person to whom the same had been issued was called upon to produce his evidence, on which he intended to rely in support of his defence "as per Section 178A of the Sea Customs Act, 1878 ".