- (1.) THIS is a petition under Article 226 of the Constitution praying for the issue of a writ of certiorari or other appropriate writ to quash the order of the Collector of Customs, Madras in O.S. 107 of 1958/RD-MT dated 12th May, 1958 confiscating 97 pieces of diamond valued at Rs. 4987/- under Section 167(8) of the Sea Customs Act, 1878 read with Section 3(2) of the Imports and Exports Control Act.
(2.) THE petitioner is a dealer in diamonds on a small scale. THE nature of his business is described thus in the following words contained in his affidavit : "I have no business of my own. My business is carried only in the bazar looking at prospective sellers or buyers" THE petitioner and his friend one Ratilal Kalidass Mehta were walking along the street near the Bullion Market Post Office at Madras, on 18th February, 1958. THE petitioner told his friend that he had some diamonds to sell where upon the friend wanted to have a look at them. THE petitioner took a packet containing 42 stones of diamonds and handed it over to his friend. Just at that time a van belonging to the Customs Department carrying customs officials passed that way. Ratilal was scared and frightened at the sight of the customs officials and returned the packet to the petitioner. THE Customs officials who were in the van intercepted the petitioner and his friend and interrogated them. THE petitioner stated that he was a broker and that he always carried a few diamond stones for sale. He also produced the packet of diamonds. THE petitioner was taken to the Custom House and when his person was searched a few more packets of diamonds were found in his purse. In all six packets were recovered from the petitioner and the six packets contained 97 stones of various description. THE residence of the petitioner No. 7, Tholasingam Street, Madras-1 was searched but nothing was recovered by the Department. THE safety deposit locker No. 153 at the Indian Bank taken on rent by the petitioner was also searched but no precious stones were recovered. THE petitioner, was unable to produce any voucher to show how he came into possession of the diamonds recovered from him. He merely stated that he was a broker and that he purchased the diamonds piece-meal from various dealers in the city. It is indeed significant that not a solitary voucher was produced to support the version of his alleged purchase. THE petitioner also gave a statement to the Customs authorities on the same day reiterating his story of purchase from dealers in the City. On 1st March, 1958, a show cause notice was issued to the petitioner calling upon him to show cause why action should not be taken under Section 167(8) of the Sea Customs Act, 1878 read with Section 3(2) of the Imports and Exports Control Act, 1947. The petitioner sent an explanation on 17th March, 1958. Therein he submitted that the diamonds recovered from him were not illicitly imported, that he was only a broker, and that he purchased the diamonds from various persons with a view to sell them a small margin of profit. He further submitted that the diamonds were all 'old cut stones' previously used by others. The Assistant Collector of Customs gave a personal hearing to the petitioner on 29th March, 1958. The petitioner took time till 31st March, 1958, to prove his case namely, purchase from other dealers in the City. There was an enquiry on 31st March. 1958, by the Assistant Collector in the presence of the petitioner who was represented by Counsel. The stones were examined under a magnifying glass. The petitioner categorically stated that all these 97 stones were purchased from about 17 persons but curiously enough he was unable to remember even the name of anyone of them. He then stated that he might be able to contact one or two sellers through a goldsmith (whose identity was however not disclosed) to give evidence to substantiate his case of purchase. Of course he did not even remember the name of the goldsmith. The petitioner again pressed for a further opportunity to produce some of the persons from whom he alleged to have purchased the stones. Such opportunity was given to him but the petitioner could not produce even a single person from whom he alleged he had purchased the diamonds in question, though according to him there were as many as 17 persons with whom he had transactions. On 18th April 1958 another show cause notice was issued to him by the Department stating that the burden was upon the petitioner to prove that the diamonds were not smuggled goods under Section 178A of the Sea Customs Act, 1878. The petitioner gave a further explanation on 3rd May, 1958 and pleaded that he committed a mistake in not maintaining account books, and not obtaining proper receipts from persons who sold the stones, and ultimately confessed that he had no means of establishing that the diamonds were not smuggled diamonds. The Collector of Customs passed the order of confiscation on 12-5-1958. It is this order which is challenged in this writ petition
(3.) THE only contention urged by the learned counsel for the petitioner is that there are no materials to invoke the aid of Section 178A of the Sea Customs Act, 1878 and that the burden of proving that the seized goods were contraband lay only on the Department. It is contended that the seizure of the diamond stones was merely on suspicion, that the stones might have been illicitly imported into the country, and that there were no materials at the time of the seizure to find a reasonable belief in the mind of the seizing officer that the goods were smuggled. It is incontrovertible that Section 178A of the Act can come into operation only where goods are seized in the reasonable belief that they are smuggled goods. It is not necessary to emphasise the distinction between 'reasonable belief' and 'suspicion', as the distinction is transparently plain. Reasonable belief must rest only on facts, materials and circumstances, whatever may be the process by which such facts, materials and circumstances emerge and come to light. THEy may be derived by information supplied by informer. THEy may be gathered in a most haphazard fashion from various persons who might themselves have had no first hand information in the matter and might have heard it as mere hear-say from others. But however infirm such information or materials may be from the point of view of evidentiary value they nevertheless constitute a basis for entertaining a reasonable belief in regard to the contraband character of the seized goods. A suspicion however is only a mere conjecture, speculation or guess and is generally in the nature of intution. Persons like police officials and customs authorities engaged in detective work view things through tinted glasses from their own perspective and often smell rat. THE reasonable belief contemplated under Section 178A of the Act is not the coloured vision of a Customs official seeing contraband stuff spread throughout the territory but belief engendered on materials from which a reasonable man can infer that the goods seized under particular circumstances are smuggled goods.;