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2017 (11) TMI 1317

Head Note / Extract:
Redemption of gold - penalty - interest on the amount of redemption fine - 240 kilograms of gold (bars etc.) was seized by the appellant's father on the ground that the seized gold was held by the appellant in contravention of Rule 126-I - What is the law governing determination of the amount of fine that could be levied and collected from the appellant in lieu of the confiscation of gold seized from him? - Whether the High Court applied the correct law in recording the conclusion that the appellant is liable to pay an amount of ₹ 11.04 crores in lieu of the confiscation of the Gold if he so chooses?

Held that: - The language of Section 73 is clear that it applies only to those cases wherein confiscation is one which is authorised “by this Act”. In our opinion, Section 73 would have no application to those cases of confiscation which are adjudged under the RULES. It would be applicable only for those cases where the confiscation is authorised by the GOLD ACT. Section 7130 authorises the confiscation of gold in respect of which “any provision of this Act or any rule or order made thereunder has been, or is being, or is attempted to be, contravened”. In other words, Section 71 authorises the confiscation of gold if there has been or is or is attempt to contravene the provisions of the GOLD ACT i.e. only such contravention occur after the commencement of the GOLD ACT but not contravention of law which existed anterior thereto - There is a distinction between acts done pursuant to the authorization of a statute and acts done pursuant to the authorization under a different statute or a statutory instrument but deemed to have been done under the earlier of the abovementioned two statutes. When a statute creates a fiction requiring certain events which took place prior to the commencement of such a statute to be deemed to have been done under the statute, such a fiction does not retrospectively authorise doing of such acts. It only takes note of the existence of certain state of affairs and creates putative state of affairs by declaring that such anterior events should be deemed to have taken place under the statute which came into existence later. Such fictions could only have limited consequences.

One of the ancillary submissions made on behalf of the appellant is that in view of the fact that the order of the Collector dated 9.12.94 gave an option to the appellant to redeem the gold by paying a fine of ₹ 2.5 crores in lieu of confiscation which had become final in view of the dismissal of the appeal of the department on 23.5.1996 - The submission of the appellant is required to be rejected for the simple reason that the determination of the amount of fine made by the tribunal was without any basis. The conclusion of the Tribunal that the fine in lieu of confiscation must be equal to the value of the gold as on the date of its seizure is not based on any principle of law. The correctness of the said conclusion was the subject matter of the reference before the High Court.

In view of the enormous delay which took place in the confiscation proceedings (50+ years), the appellant must be made to pay the interest on the amount of fine of ₹ 11.04 crores. Otherwise, it would have the effect of permitting the appellant to profit by litigation as according to the Attorney General if the appellant is permitted to take back the entire quantity of 240.040 kgs. of gold the current market value would be ₹ 72 crores (approx.) - we deem it proper to direct that the appellant would be entitled to redeem the gold by paying not only the fine of ₹ 11.04 crores but also the interest thereon calculated @ 10% p.a.

Appeal allowed in part.


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