TMI Blog1982 (3) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... nt detained the parcel and took charge thereof at the Delhi Railway Station. This was on the evening of 30-8-1958. It appears to be common ground that on the same day officers of the Department visited the business premises of the petitioner in Delhi and all the relevant books of account and other papers of the petitioner were scrutinised and the relevant entries checked up and duly initialled. A statement of the agent of the Delhi branch of the petitioner was also recorded who stated that the goods were being sent to Bombay in order to avail of a difference of 8 annas per tola between the prices of gold at Delhi and at Bombay. The books of account of the petitioner and certain other relevant papers were, however, actually seized by the officers of the Department only on the 1st September, 1958. 3. Some time afterwards i.e. on 24-12-1958 the Assistant Collector of Central Excise issued a notice to the petitioner in the form of a memorandum. The notice stated that information had been received that the petitioner were engaged in sending to Bombay large quantities of gold believed to be smuggled and that further market enquiry had revealed that they were engaged in the purchase of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to say : "The above facts and the failure of the party to account for the gold properly led to a reasonable belief that the gold was smuggled into India from a Foreign Territory......and as such the same was seized by the Customs for taking action under the Customs Law". The order then proceeded to discuss the further proceedings in the case and then to a discussion of the evidence regarding the 8 pieces of gold which were confiscated. In respect of 101-6-14 tolas, the petitioner had pleaded that the goods had been purchased from one Ram Gopal who had sold the goods on behalf of one Bindraban. Ram Gopal was not produced but Bindraban's accounts were said to contain the necessary entries in respect of the sale to the petitioner. Bindraban was said to have melted old ornaments and got 132-4-2 tolas after refining but said to have sold 101-6-4 tolas to the petitioner. In regard to the another piece weighing 20-2-½ tolas the petitioner's case was that it has been purchased from Mahavir Prashad, a bullion merchant of Delhi. The transaction was confirmed by Mahavir Prashad but the broker through whom the sale was said to have been effected denied the transaction and Mahavir Prashad al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the total contents were 1000.9. The petitioner wrote both to the Government Mint and to the Central Board of Revenue pointing out the discrepancy in regard to the second of the above reports. It also offered to send to the Mint another piece of gold for analysis and asked for the charges therefor. It also requested the Central Board to send the pieces of gold to the Government Mint at Bombay for analysis and assay result. But the Mint at Calcutta did not reply to the petitioner and the Central Board replied to the petitioner say that "the analysis reports copies of which have been supplied to you by the Collector are quite clear and self-explanatory" and that there was no occasion for further analysis. 6. The appeal was disposed of by the Central Board of Revenue on 31-12-1963. The order of the Central Board touched upon only two points. In the first place it was stated that the plea of the petitioner that the appellant's books having been taken over by the Customs immediately after the seizure, the petitioners did not have opportunity to manipulate the entries in the books or to persuade other people to make corresponding entries in their books to tally with the appellant' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llery. The petitioner's contentions in respect of each of the pieces confiscated was considered by the Central Government but it came to the conclusion that the petitioners had not been able to prove clearly the proper acquisition of the impugned gold and had not discharged the burden cast on it under Section 178(A) to show that the gold was legally imported. The confiscation of gold was upheld as a consequence. In the result the revision application was dismissed except for the relief in respect of penalty already referred to. 8. The petitioner has thereupon come to this Court again with prayers for the issue of a writ of certiorari to quash the order of the Government of India dated 20-10-1970, in so far as it confirms the order of the Central Board dated 31-12-1963 and the issue of a writ directing the respondents to release the gold pieces weighing 235-6-4 tolas in question and the zinc slab weighing 8 seers. 9. On behalf of the respondents no counter affidavit has been filed and the writ petition has therefore to be disposed of in the light of the averments made in the writ petition and the findings in the various orders passed by the authorities. 10. On behalf of the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he basis of which the respondents could have disbelieved the entries in the petitioner's books of account, the entries in the books of account of various sellers and the affidavits that were filed by them and proceeded to reject the detailed explanation given by the petitioner at every stage. 11. On the other hand learned Counsel for the respondents sought to support the orders of the respondents in various ways. He submitted that the orders clearly show that there was information before the authorities on the basis of which the goods were detained. He points out that there is no obligation on the part of the respondents to disclose their source of information and that the fact that there was such information is fully borne out by the memorandum issued by the Assistant Collector as well as by the appellate and revisional orders. He submitted therefore that this was a case in which the conditions of Section 178A were fulfilled. He also contended alternatively that even assuming as contended for by the petitioner that the reasonable belief that the goods represented smuggled goods came only much later there was nothing wrong in the present case. He submitted that the seizure of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should not be interfered with and the writ petition should be dismissed. 12. It will be seen that the controversy between the parties centres around two principal contentions. The first is whether before the seizure was effected there was a reasonable belief in the mind of the seizing officers that the goods in question represented smuggled goods. The second is as to whether the conclusion arrived at by the authorities can be said to be based on no material or based on irrelevant material or to have been arrived at by ignoring relevant and admissible material already on record or to be perverse or unreasonable in the light of the facts brought on the record. So far as the first question is concerned, the petitioner's contention is mainly based on findings of the Collector of Central Excise. Learned Counsel for the petitioner drew my attention to the decision of the Bombay High Court in M.G. Abrol and another v. Amichand Vallamji and others, AIR 1961 Bombay 227 and also the decision of the Gujarat High Court in Bapalal Khushaldas Gosalia v. R. Prasad, Collector of Central Excise Basora and another, AIR 1965 Gujarat 135. In both these decisions it has been pointed out referring to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s so. It is therefore not possible to accept the contention that no seizure took place at the railway station and that it took place only subsequently. But this is an alternative contention put forward by the learned Counsel. He also vehemently argued that in the present case there was on record information justifying the seizure at the railway station itself and I am inclined to agree with this contention. There is no doubt a certain amount of difficulty in this case because the respondents have not filed the counter affidavit nor have the records been produced before this Court. There is therefore no first-hand information before me to indicate the precise circumstances in which the seizure took place. But I am of opinion that there is enough on record to justify the conclusion that the seizure was made only in the reasonable belief that the goods constituted smuggled goods. The seizing officer in his notice dated 24-12-1958 clearly states at the outset that information had been received regarding the transportation of what was believed to be smuggled gold from Delhi to Bombay and that the petitioners were also engaged in such transactions. The memorandum also makes it clear that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inding in this regard in paragraph 4 of its order. In these circumstances I am of opinion that though it is true that there should be some information and not mere suspicion on the basis of which goods are seized, such information existed in the present case. It is a pity that the respondents have not substantiated this by filing the counter affidavit but in my opinion the orders of the Assistant Collector as well as the Central Government clearly bring out the point at issue. I am therefore unable to accept the contention that the goods have been seized without the requirements of Section 178A being fulfilled. 13. So far as the second point in controversy is concerned, I have come to the conclusion, after examining the matter carefully, that this is a case in which the conclusion of the respondent authorities cannot be supported as it is based on no evidence and is also a conclusion which no reasonable person could raw having perused the record. I have earlier referred to the fact that when the petitioner filed an appeal to the Central Board from the order of the Collector it had explained every one of the points on which the Collector had given a finding against the petitioner. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Ram Gopal who is said to have sold the gold was not produced; (b) that there was no reason why Bindraban should make entries regarding the sales in his books of account; and (c) that there was a discrepancy in regard to the quantity sold by Bindraban. The petitioner had explained that through Ram Gopal had effected the sale to the petitioner it was on behalf of Bindraban and that Ram Gopal was not being produced because he has left the service of Bindraban. There is nothing in the circumstances of the case which would justify a disbelief of the entire sale because merely the Ram Gopal was not produced particularly because Bindraban admits the sale and there are entries in his account books regarding the sale of the gold. Similarly, I am unable to find any relevance in the criticism that Bindraban need not have made entries in his business accounts regarding the sale of the gold, when he was not a dealer in gold himself. It over looks that even though Bindraban may not have been a dealer in gold, he was the owner of a flour mill and that he will have to account to the Income-tax Authorities for the sale proceeds which had been utilised for the business. Again the petitioner explai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e various persons who had in turn got it by having certain ornaments melted in refineries. All the alleged sellers accept the position. Their account books support the transactions. The evidence of the refineries has also been placed on the record. In the teeth of such cogent and conclusvie evidence I am unable to see anything on the basis of which any reasonable person could draw an inference that the purchases had not been satisfactorily explained by the petitioner. 14. It remains to refer one more aspect of the matter and that is regarding the fineness of the gold. The Collector has not referred to this at all. It is, for the first time, the Central Board which obtained the assay report. All that it pointed out to the petitioner was that the assay report had indicated a fineness of 998.5 in one case and 999.1 in the other case. There was no suggestion at any point of time that the Central Board was going to draw from this circumstance an inference that gold of such fineness could not have been obtained legally and must therefore represent smuggled gold. The petitioner immediately pointed out certain discrepancies in the assay reports and indeed one of them clearly contains an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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