Dismissed

Collector,C.E. v. P.Madhusudan

Orissa HC16 Dec 2021SJC/72/1993

Case brief

AI extract

What is this about?

The High Court of Orissa dismissed a reference petition challenging the CEGAT's refusal to refer questions of law regarding gold confiscation. The court held that Section 79 of the Gold (Control) Act mandates notice to the actual owner, not the possessor, and since the gold belonged to the wife, no legally impermissible view was taken by not issuing such notice.

What did the court decide?

Reference petition dismissed; impugned order of CEGAT upholding refusal to refer questions.

Collector,C.E. Vs P.Madhusudan — Constitutional and Fundamental Rights | Orissa HC (2021)

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IN THE HIGH COURT OF ORISSA AT CUTTACK

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SJC No.72 of 1993

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Collector, Customs & Central …. Applicant Excise,Bhubaneswar-4 Mr. Choudhury Satyajit Misra, Senior Standing Counsel (Central) -versus-

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P. Madhusudan Patra …. Respondent Mr. S. S. Rao, Advocate

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CORAM: THE CHIEF JUSTICE

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JUSTICE A. K. MOHAPATRA

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ORDER 16.12.2021

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Order No.

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1. The present petition questions the refusal by the Customs, Excise & Gold (Control) Appellate Tribunal, (CEGAT), East Regional Bench, Calcutta by its order dated 7^th August, 1992 to refer certain questions of law arising from its order dated 19^th November, 1991 allowing the Respondent-Assessee’s appeal, at the instance of the Collector of Customs and Central Excise, Bhubaneswar, to this Court.

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The background facts are that on the basis of intelligence gathered by the officers of the Headquarters Preventive Units, Bhubaneswar, the silver shop-cum-residential premises of the Respondent, who was a proprietor of a jewelry shop in Aska and Ganjam, was raided and searched on 24^th February, 1984. Apart from gold items

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recovered from the shop, some equipments used for testing and weighing gold and gold ornaments were also seized. Thereafter, the residential portion of the joint premises was searched from where the officers recovered 1690.400 grams of new gold ornaments, which were kept in an aluminum box. That box was in the wall almirah of the bed room. The gold ornaments therein were kept in a paper slip showing the names of the customers. Apart from the above articles, one touch stone used for gold testing, 9 loose slips showing transactions of gold, one bottle containing gold dust were recovered.

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It is stated that the Respondent himself did not possess any certificate of goldsmith or even a gold dealer’s licence. He claimed that the primary gold recovered from his shop had been obtained as a result of melting of gold ornaments of his wife and were kept for preparing new gold ornaments. He claimed that he had received some gold towards his share at the time of partition from his brothers and this was recovered from his residence. Some customers had also given gold ornaments for repairing.

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Notice under Section 79 of the Gold (Control) Act, 1968 (Act) was issued to the Respondent alleging contravention of Section 8(1) of the Act. During the enquiry conducted, the affidavits of four persons were presented as evidence on behalf of the Respondent. The Additional Collector in the Order in Original dated 31^st December, 1987 came to the conclusion that 132.700 grams of

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primary gold were liable for absolute confiscation under Section 71(1) of the Act. Gold ornaments weighing 1765.700 grams were liable for confiscation under Section 71(1) of the Act. However, the Respondent was given an option to redeem the said quantify of gold ornaments on payment of fine of Rs.25,000/- in lieu of confiscation. Further, a penalty of Rs.10,000/- was levied on the Respondent under Section 74 of the Act for contravention of Section 8(1), 27(1) and 39(1) of the Act.

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The Court has been informed that as far as the gold ornaments are concerned, the Respondent redeemed the same by paying a fine of Rs.25,000/-.

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The Respondent’s appeal was dismissed by the First Appellate Authority i.e. the Collector of Customs & Central Excise (Appeals), Calcutta by the order dated 26^th September, 1988. Thereafter, the Respondent-Assessee filed an appeal before the CEGAT, Calcutta, which by the order dated 19^th November, 1991 allowed the appeal. It was observed that once the Respondent made a statement on the very first date that the primary gold was a result of melting of gold ornaments belonging to the wife, notice ought to have been issued to her under Section 79 of the Act and in the absence of such notice, the gold could not be confiscated.

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This view was reiterated in the impugned order dated 7^th August, 1992 by the CEGAT while declining to defer any question to this Court for adjudication.

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Having heard the submission of learned counsel for the parties, the Court is inclined to concur with the view expressed by the CEGAT in the matter.

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Section 79 of the Act reads as under:

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“79. Giving of an opportunity to the owner of gold, etc. No order of adjudication of confiscation or penalty shall be made unless the owner of the gold, conveyance, or animal or other person concerned is given a notice in writing-

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(i) informing him of the grounds on which it is proposed to confiscate such gold, conveyance or animal or to impose a penalty; and

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(ii) giving him a reasonable opportunity of making a representation in writing within such reasonable time as may be specified in the notice against the confiscation or imposition of penalty mentioned therein and, if he so desires, of being heard in the matter:

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Provided that the notice and the representation referred to in this section may, at the request of the owner or other person concerned, be oral:

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Provided further that where no such notice is given within a period of six months from the date of the seizure of the gold, conveyance or animal or such further period as the Collector of Central Excise or

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of customs may allow, such gold, conveyance or animal shall be returned after the expiry of that period to the person from whose possession it was seized.

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Explanation.-Where any fresh adjudication is ordered under this Act, the period of six months specified in the second proviso shall be computed from the date on which such order for fresh adjudication is made.”

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A plain reading of the above provision reveals that a notice to the ‘owner’ is a mandatory requirement prior to passing an order of confiscation of gold or levying any penalty etc. In the present case, as far as the quantity of primary gold is concerned, it has been factually determined that on the very first day of raid on the premises and his shop, the Respondent disclosed that the primary gold was obtained by melting of the gold ornaments belonging to his wife. Therefore, the officers involved in the raid were made aware that the Respondent was not claiming ownership of the primary gold but attributing it to his wife. There should have been no difficulty, therefore, for a notice to be issued under Section 79 of the Act to the wife of the Respondent on the basis of the statement made by him to the officers. For some reason, however, that was not done.

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Section 79 itself is categorical that irrespective of the person from whom possession of the gold is recovered, a prior notice would have to be issued to the ‘owner’ of such primary gold before proceeding further to confiscate the said primary gold. In other

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words, there is no explanation to the section expanding the scope of the expression ‘owner’ to include an ostensible owner or even a person from whom possession the gold or gold ornaments is recovered.

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In the circumstances, the view taken by the CEGAT is a possible view and cannot be said to be legally impermissible. Consequently, the Court is unable to find any ground to interfere with the impugned order of the CEGAT declining to make a reference of the question as urged by the Petitioner to this Court. The reference petition is accordingly dismissed.

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An urgent certified copy of this order be issued as per rules.

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(Dr. S. Muralidhar)
Chief Justice
(A. K. Mohapatra)
Judge

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M. Panda

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Collector,C.E. v. P.Madhusudan

Case brief

What is this about?

What did the court decide?

Collector,C.E. v. P.Madhusudan

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

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Coram

Case details

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