GOPALDAS UDHAVDAS AHUJA Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS petition under Article 226 of the Constitution takes exception to an order of confiscation together with the imposition of a penalty purporting to fall under sections 71 and 74 of the Gold (Control) Act, 1968- hereinafter referred to as the Act.

(2.) PETITIONERS are the son and widow respectively of one Udhavdas Ahuja. The said Udhavdas was married twice-first to mother of the first petitioner who died on 19-2-1950 and next to the second petitioner on 1-7-1950. Petitioner No. 1 was born on 16-2-1950. From the second petitioner Udhavdas had a daughter named Mohinin who was born on 21-2-1951. Udhavdas mother Bhojibai expired on 4-7-1951. During his life-time, Udhavdas, his mother, wives, petitioner No. 1 and Mohini until her marriage, all constituted an undivided Hindu Family. Udhavdas as also the family were well to do and celebrated Mohinis marriage which took place on 2-5-1974 with great pomp. On 28th August, 1974, the residence of the petitioners was raided by Officers belonging to the Income-tax Department. In the course of this raise different articles were found and they were seized as detailed in the annexures to the panchanama at Ex. A dated 28-8-1974. The first annexure to Ex. A also marked as Annexures "a refers to certain receptacles contain in gold, jewellery, ornaments and silver utensils. These were opened up in the presence of another set of panchas on 30-8-1974. The primary gold and gold scavengers which were part of the articles dumped into a trunk on 28-8-1974 were made over to the Superintendent, Central Excise Gold Circle, Bombay. This was done under Ex. B Various proceedings were initiated against the petitioners, one of them being a notice to show cause why action should not be taken against them for the contravention of provisions of the Gold (Control) Act, 1968. Replies were given to this note by both the petitioners. The defence set up by them was that the primary gold and gold sovereigns were secreted in one locket on the tip of one of the cupboards. The locker was invisible when viewed from the exterior. The key thereof was not with the petitioners. The top of the cupboard had to be unscrewed and it was then that the locker came to light. To open the same, a Locksmith had to be commissioned and it was he who had fabricated a key for the opening of the locker. This showed that the niche chosen for the secreting of the gold coins and primary gold was not known to the petitioners, who for that reason, must be taken to be unaware of the existence of the said gold and gold d coins. They could not therefore, be said to have rendered the gold and gold coins liable for confiscation. They were entitled to the benefit provided for innocent possessors of gold vide the Proviso to section 71 (1) of the Act. The defence was negatived by the Collector of Customs. His initial verdict was set aside in appeal and by the matter was remanded back. The Collector Re-affirmed the conclusion reached by him and made the punishment somewhat more stringent than what it formerly had been. A fresh appeal was preferred and the petitioners could succeed to the limited extent of penalty having been reduced and an option being given to them to redeem some of the articles which had been confiscated. The revision preferred by the petitioners against the appellate verdict proved of on avail and that is how the petitioners came to this Court under Article 226 of the Constitution.

(3.) PETITIONERS contend that having regard to the facts of the case it had to be head that they were innocent possessors of the primary gold and gold coins figuring in this case. Therefore, they had to be given the benefit of the Proviso to section 71 (1) of the Act. The authorities had barred seriously in coming to the contrary conclusion. The order of confiscation as also the penalty had to be aside. Counsel representing the respondents justifies the order passed and in the alternative submits that in no case will the petitioners be free from the order of confiscation (coupled with the option to redeem) in relation to four golden idols weighing 258. 600 gms.