1971 (8) TMI 225 - HC - Central Excise

Summary

Issues Involved:
1. Legality of the search and seizure conducted by the Excise Department.
2. Compliance with the Gold Control Act, 1968, and associated rules by the petitioner.
3. Jurisdiction and authority of the Excise Department to seize the petitioner's entire stock.
4. Availability and adequacy of alternative remedies for the petitioner.

Detailed Analysis:

1. Legality of the Search and Seizure:
The petitioner, a licensed dealer under the Gold Control Act, 1968, had his business premises searched by the Excise Department on 27th April 1971. The search led to the seizure of 2583 pieces of gold ornaments weighing 22151.370 grams, as well as the discovery of a piece of foreign gold. The search was conducted under a search authorization issued under Section 105 of the Customs Act, 1962. The petitioner challenged the search and seizure, arguing that it was unjustified and illegal.

2. Compliance with the Gold Control Act, 1968:
The petitioner admitted that accounts were not written from 18th April 1971 and that the prescribed forms (GS-10, GS-11, GS-12) were not maintained. The petitioner argued that although entries were not made in the forms, relevant vouchers were available for inspection, and the posting of transactions was to be done within a few days. The court noted that under Section 55 of the Gold Control Act, every licensed dealer is required to maintain complete accounts of gold owned, possessed, or otherwise acquired. The petitioner failed to do so, thereby contravening Section 55 of the Act.

3. Jurisdiction and Authority to Seize Entire Stock:
Section 66 of the Gold Control Act empowers a Gold Control Officer to seize gold in respect of which any provision of the Act has been contravened. The court found that the seizure of the petitioner's entire stock was beyond the scope of Section 66. The officers should have seized only those ornaments that were not accounted for in the account books. The court held that the seizure of the entire stock was illegal and without jurisdiction, as no contravention of the Act was alleged in respect of the accounted-for ornaments.

4. Availability and Adequacy of Alternative Remedies:
The respondents argued that the petitioner had an adequate remedy available under the Act by way of filing an appeal and revision. The court, however, held that the existence of an alternative remedy does not oust the jurisdiction of the High Court to grant relief under Article 226 of the Constitution. The court noted that the power of seizure is a serious inroad on the fundamental right of property and must be exercised strictly according to law. Since the seizure was found to be without jurisdiction, the petitioner was entitled to relief under Article 226.

Conclusion:
The writ petition was allowed, and the court directed the opposite parties to return the seized ornaments to the petitioner forthwith. The petitioner was also awarded costs. The court emphasized that while the petitioner had contravened Section 55 of the Act by failing to maintain accounts, the seizure of the entire stock was illegal and beyond the jurisdiction of the Excise Department. The Department was free to take any other action or proceedings against the petitioner for the said contravention of the Act.