JUDGEMENT
AYYANGAR, -
(1.)THE Judgment of the court was delivered by
(2.)THE Sea Customs Act, 1878 (Act 8 of 1378) (referred to hereinafter as the 'Act), was amended by s. 14 of Act 21 of 1955 by the introduction of s. 178A reading: '178A. (1) Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be on the person from whose possession the goods were seized. (2) This section shall apply to gold, gold manufactures, diamonds and other precious stones, cigarettes and cosmetics and any other goods which the central government may, by notification in the Official Gazette, specify in this behalf. (3) Every notification issued under Sub- section (2) shall be laid before both Houses of Parliament as soon as may be after it is issued.'
It is the constitutional validity of this section that is the common point which arises in these several cases which have been heard together. We have heard on the merits only Civil Appeals 408 to 410 of 1960 and the other cases were posted before us in order that Counsel appearing for the parties in them,. might have an opportunity to be heard upon the common question mentioned earlier. We shall, therefore, refer only to the fact,% of Civil Appeals 408 to 410 of 1960 in dealing with these petitions. Civil Appeals 480 to 410:
These appeals come before us on a certificate granted by the High court of Madras under Arts.132(1) and 133(1)(c) of the Constitution and are directed against the judgment and order of the High court in two Writ Petitions filed before it by Nathella Sampathu Chetty-the sole proprietor of a business in gold and silver, bullion, jewellery etc. carried on in the name of Nathella Sampathu Chetty and Sons (referred to hereafter as the respondent).
The facts giving rise to these appeals are briefly as follows : On the morning of 26/06/1956, one Nandgopal-an employee of the respondent-alighted at the central station in Madras from the Bombay Express. Nandgopal was intercepted and questioned by a Head Constable of the State Police Service attached to the Prohibition Intelligence Department. Nandgopal admitted that he was in possession of gold which he was bringing for his firm-the respondent-from Bombay. The Head Constable immediately contacted the officers of the Preventive Section of the Customs Department who were on duty at the central station who interrogated Nandgopal and Eeized from him four blocks of gold weighing in all about 1,000.00 tolas. Enquiries were made to verify the story narrated by Nandgopal as to the source fromhich he obtained the gold and thereafter the Collector of Customs being prima facie of the view that the gold seized had been smuggled, issued notice to the respondent to show cause why the said gold should not be confiscated. The respondent offered his explanation but the Collector held that the respondent had not discharged the onus of proving that the gold was not smug led-an onus Customs Act and directed the confiscation of the gold. The respondent thereupon filed a petition (Writ Petition 384 of 1957) under Art. 226 of the Constitution before the High court of Madras for the issue of a writ of certiorari or other appropriate writ for quashing the order of the Collector of Customs on various grounds to which we shall advert later, including the constitutional validity of a. 178A.
While this writ petition was pending, the respondent filed another petition (,Writ Petition 660 of 1958) for a writ of mandamus directing the Collector to return the gold seized and confiscated by him.
(3.)THE two writ petitions were heard together and by an order dated 11/09/1958, the learned Judges of the High court held, allowing Writ Petition 384 of 1957, that s. 178A of the Sea Customs Act was void under Art. 13 of the Constitution. THEy further held that even if s. 178A were valid, the condition precedent for invoking the rule as to the burden of proof prescribed by the section had not been complied with, in that the customs officer who effected the seizure which preceded the adjudication did not entertain 'a reasonable belief that the gold was smuggled', with the result that the order of confiscation was invalid. Besides, the learned Judges were also of the view that s. 178A of the Sea Customs Act could not be invoked in adjudicating a contravention of a notification under the Foreign Exchange Regulation Act which imposed restrictions on the import of gold. Though on these conclusions the order of the Collector confiscating the gold was set aside, the learned Judges held that the respondent was not entitled to an order for the return of the gold, but only to a direction to the Collector to hear and determine the question about the gold seized being smuggled gold without reference to the rule as to onus of proof enacted by s. 178A. THE appellant, the Collector of Customs, Madras, obtained leave from the High court under Arts. 132 and 133 of the Constitution, to appeal to this court against the orders in writ petition No. 384 of 1957 and No. 660 of 1958 (Civil Appeals 408 and 409) and a similar order was passed in an application for a certificate by the respondent who felt aggrieved by the refusal of the court in Writ petition No. 660 of 1958 to direct an immediate return of the gold seized (Civil Appeal 410). THE three appeals have been consolidated as they arise out of the same transaction.
We shall first take up for consideration Civil Appeals 408 and 409 of 1960 filed by the Collector of Customs, because unless those appeals fail there would be no need to decide the relief to which the respondent would be entitled in Civil Appeal 410 of 1960. In order to appreciate the contentions, raised, it would be necessary to set out the statutory provisions which form the background of the impugned provision s. 178A of the Sea Customs Act. The Foreign Exchange Regulation Act, 1947 (Act' 7 of 1947), was brought into force on 25/03/1947, by a notification issued by the central government under s. 1(3) of that Act. The preamble to the Act recites: 'It is expedient in the economic and financial interests of India to provide for the regulation of...... the import and export of currency and bullion.' Section 8 of this Act refers to the import of gold the commodity with which these appeals are concerned. It enacts: '8(1). The central government may, by notification in the official Gazette, order that subject to such exemptions, if any, as may be contained in the notification, no person shall except with the general or special permission of the Reserve Bank and on payment of the fee, if any, prescribed bring or send into India any gold or silver or any currency notes or bank notes or coin whether Indian or foreign, Explanation.-The bringing or sending into any port or place in India of any such article as aforesaid intended to be taken out of India without being removed from the ship of conveyance in which it is being carried shall nonetheless be deemed to be a bringing, or as the case may be sending, into India of that article for the purposes of this section.' Gold is defined in s. 2(f) of this Act thus: ' 'gold' includes gold in the form of Coin, whether legal tender or not, or in the form of bullion or ingot, whether refined or 'not and Jewellery or articles made wholly or. mainly of gold.' These provisions have to be read in conjunction with the provisions of the Sea Customs Act which form, as it were, integrated provisions in relation to the import and export of, among other commodities, gold, and s. 23A of the Foreign Exchange Regulation Act which was introduced by an amendment of 1952 effects this co-ordination. This section reads: '23A. Without prejudice to the provisions of section 23 or to any other provision contained in this Act the restrictions imposed by subS. (1) and (2) of section 8, subsection (1) of section 12 and clause (a) of sub-sec- tion (1) of section 13 shall be deemed to have been imposed under section 19 of the Sea Customs Act, 1878, and all the provisions of that Act shall have effect. accordingly, except that section 183 thereof shall have effect as if for the word shall' therein the word 'may' were substituted. ' Turning now to the Sea Customs Act. s. 167(8) enacts- '167. The offenses mentioned in the first column of the following schedule shall be punishable to the extent mentioned in the third column of the same with reference to such offenses respectively:
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Section 19 referred to here reads '19. The central government may from time to time, by notification in the Official Gazette, prohibit or restrict the bringing or taking by sea or by land goods of any specified description into or out of India across any customs frontier as defined by the central government.'
The other provisions which have a bearing upon the points arising for discussion with reference to the validity of the impugned s. 178A of the Sea Customs Act are : 's. 178. Any thing liable to confiscation under this Act may be seized in any place, in India either upon land or water, or within the Indian Customs waters, by any officer of Customs or other person duly employed for the prevention of smuggling.' 'Is. 181. When anything is seized, or any person is arrested, under this Act, the officer or other person making such seizure or arrest shall, on demand of the person in charge of the thing so seized, or of the person so arrested, give him a statement in writing of the reason for such seizure or arrest.' 's. 182. In every case, except the cases mentioned in section 167, Nos. 26, 72 and 74 to 76, both inclusive, in which, under this Act, anything is liable to confiscation or to increased rates of duty; or any person is liable to penalty, such confiscation, increased rate of duty or penalty may be adjudged (a) without limit, by a Deputy Commissioner or Deputy Collector of Customs, or a Customscollector; (b) up to confiscation of goods not exceeding two hundred and fifty rupees in value and imposition of penalty or increased duty, not exceeding one hundred rupees, by an Assistant Commissioner or Assistant Collector of Customs; (c) up to confiscation of goods not exceeding fifty rupees in value, and imposition of penalty or increased duty not exceeding ten rupees, by such, other subordinate officers of customs as the Chief Customs-authority may, from time to time, empower in that half in virtue of their office: Provided that the Chief Customs authority may, in the case of any officer performing the duties of a Customs-collector, limit his powers to those indicated in clause (b) or in clause (c) of this section, and may confer on any officer, by name or in virtue of his office, the powers indicated in clauses (a), (b) or (c) of this section.' '183. Whenever confiscation is authorized by this Act, the officer adjudging it shall give the owner of the goods an option to pay in lieu of confiscation such fine as the officer thinks fit.'