M G ABROL Vs. AMICHAND VALLAMJI

JUDGEMENT

(1.) THIS is an appeal filed by the Additional Collector of Customs, Bombay, and the Union of India, against the order passed by Mr. Justice K. T. Desai, by which the order passed by the Additional Collector of Customs confiscating certain quantity of gold belonging to the respondents was quashed, and a writ of mandamus was issued requiring the Additional Collector to withdraw the order that he had passed.

(2.) THE respondents carry on business in Bombay as dealers in bullion in partnership in the firm name and style of Messrs. Ambalal Amichand and Co. at 101 Shaikh Memon Street, Bombay. In the petition that they filed in this Court, they stated that they were one of the leading bullion merchants in the city and used to buy and sell gold in a largo way in diverse forms. It was alleged that on 12-9-1955 respondents in the usual course of their business sent about 385 tolas of gold from their stock to the Bombay Bullion Association Refinery for the purpose of melting and assaying. It was further alleged that as the respondents required more gold of the same lineness they sent a further quantity of 1151 tolas of gold from out of their stock with one of their employees named Jitendra Bhagwandas, to have the same melted with the earlier lot in order to have one lot of uniform fineness with one certificate of assaying. The petition went 011 to allege that as their employee Jitendra was about to hand over the 151 tolas of gold to an employee of the Refinery for being put in the same crucible in which the earlier lot of 385 tolas of gold had been put, he was stopped by one B. M. Kamat, an officer in the Customs Department. It was further alleged that Kamat took charge of the said 151 tolas of gold within the premises of the Refinery and that thereafter Kamat and the said Jitendra went to the respondents' shop with the said 151 tolas of gold. The respondents alleged that Kamat, alter going to that shop, checked the stock of gold with their stock as shown in their books of account and other documents and found that there was a shortage of about 24 tolas of gold, which had to be explained by tho respondents. The said Kamat, according to the respondents, made the alleged shortage of gold of about 24 tolas an excuse to seize the entire quantity of gold weighing 151 tolas. A panchnama was thereafter made on the same day in connection with the said seizure of gold. According to the respondents, the panchnama recited that the panchas were called by Customs Inspector Mr. Kishinchand N. Vazirani and Customs Preventive Officers M/s. B. M. Kamat and G. S. Shiroor and P. M. Ranade in the Rummaging Division, New Customs House, Bombay, to witness the taking over of the gold bullion from Amichand Vallamji. In the said panchnama the gold was staled to consist of three lots: (1) Three pieces of odd shapes and sizes weighing approximately 64 tolas stated by the respondents to have been purchased from Shantilal Kalidas on Saturday the 10th September 1955; (2) Two pieces of odd shapes and sizes weighing approximately 46 tolas, stated to have been purchased by the respondents from the said Shantilal Kalidas on 12th September 11955; and (3) Two pieces of odd shapes and sizes weighing approximately 41 tolas, stated to be forming part of the quantity purchased by the respondents from Mulchand Jitaji on 9th September 1955. The respondents thereafter quoted a passage from the panchnama showing that all those three pieces of gold were taken charge of by the Customs Officers to facilitate inquiries after they were placed in a cloth bag, which was sealed by Amichand with his key as desired by Amichand himself. The respondents further went on to allege in the petition that the said Shantilal Kalidas and Mnlchand Jitaji were well known bullion merchants in the market, doing business for a number of years past and were registered dealers under the Bombay Sales Tax Act. They alleged that the statement of the said Shantilal Kalidas was recorded by the Customs Officer on the very same day, that the books of the said Shanti- lal Kalidas and the said Mulchaud were produced, which showed the purchase of the aforesaid gold by the respondents; and that on 16th September 1955, 41 tolas of gold which had been purchased from Mulchand Jitaji out of the three lots which were seized by the Customs Officers, were released by the Customs Department, the Customs Officers being satisfied that that gold was not smuggled. Accord-Sing to the respondents, the Assistant Collector of Customs, Preventive Department, issued a show cause notice on 9th August 1956 against the firm of Ambalal Amichand and Co. to show cause why the balance of the gold should not be confiscated. In the notice it was stated that the said Jitendra was noticed by an Intelligence Officer of the Customs House rushing hurriedly straight to the place where gold was melted in the Bombay Bullion Relinery, without waiting near the counter where gold was weighed before melting. Inasmuch as his behaviour appeared to be suspicious, the notice went on to state, he was followed by the Intelligence Officer inside the Refinery where he was seen taking out some gold pieces in the form of Rawa and handing over the same to one of the servants of the Refinery for placing the same in the furnace. Jitendra was questioned as to why he did not get the gold weighed, to which he replied that the gold pieces which he was handing over were in addition to the gold which had already been handed over to the Refinery for melting. It was further stated in the notice that a casual perusal of the account books of the shops from where the gold was purchased by Messrs. Ambalal Amichand and Co. showed the acquisition of some quantity of gold in excess by the latter, and that as Messrs. Ambalal Amichand and Co. could not give a satisfactory explanation to the Customs Officers regarding the discrepancy found in the accounts, all the three lots of gold were brought to the Customs House and taken over in the presence of the panch witnesses for taking suitable action under the Sea Customs Act. It was further stated in that notice that two out of the aforesaid lots of gold could not be released for reasons following:

(3.) THE respondents by their petition contended that the said order dated 27th October 1956 was bad, illegal, void and inoperative in law and prayed, for the issue of a writ of certiorari or a writ in the nature of certiorari, or a direction, order or Other appropriate writ under Article 226 of the Constitution of India against the first appellant, the Additional Collector of Customs, calling for the records of the case relating to the said order dated 27th October 1956 and quashing and setting aside the same. They also prayed for the issue of a writ of mandamus or a writ in the nature of mandamus, or a direction, order or other appropriate writ under Article 226 of the Constitution of India against the appellants ordering the appellants to withdraw and set also the said order dated 27th October 1956 and to return to the respondents the said gold wrongfully confiscated by the appellants. The Collector of Customs filed an affidavit in reply denying the allegations made by the respondents in the petition. In the course of this affidavit, in paragraph 8 thereof it was inter alia stated: