K.C.Agarwal, J. - (1.) THE officers of the Customs and Excise Department searched the house of the Respondent No. 1 on October 4, 1974 and seized several items of gold and silver which are enumerated in Annexure '3' to the counter -affidavit. These articles were found kept by the authorities in two locked steel boxes and one gunny bag and three dibias. Apart from the silver ornaments and silver, the details of the articles of gold are these : Primary gold....21 gms. Gold ornaments...1501 gms.
(2.) BEFORE any show cause notice was issued to the Respondent to show cause against the proposed action, the Respondent No. 1 filed an affidavit on 20 -11 -1974 stating that the two boxes found in his possession were received from Chhotey Lal and Sangam Lal Respondents No. 2 and 3, for safe custody, and that articles kept in these boxes did not belong to him. Sangam Lal also filed an objection before the authorities asserting that the gold and silver ornaments seized by the authorities belonged to him, and that they had been kept with Respondent No. 1 for safe custody. It however, appears that the Customs and Excise Authorities, thereafter, issued a notice, which is Annexure '3' to the counter -affidavit, on March 31, 1975, calling upon the Respondent No. 1 against the action proposed to be taken against him for the contravention of Sections 8, 61 and 27 read with Sections 71, 74 of the Gold Control Act, 1968. In this notice, the case taken by the Department was that the fact of possession of primary gold by Respondent No. 1 along with other articles of gold ornaments indicated that the Respondent No. 1 was carrying on business of gold dealer without obtaining a licence, as required by Section 27 of the Act. It seems that instead filing a reply to the aforesaid notice, Respondent No. 1 along with Respondents No. 2 and 3 rushed to this Court and filed the writ petition, giving rise to the present appeal, for a writ of mandamus directing the authorities to hand over the gold, and gold and silver ornaments, which had been seized from possession of Respondent No. 1 on October 4, 1974. The main ground on which the writ petition was filed was that as the quantity of primary gold and gold ornaments possessed by Respondent No. 1 was less than the prescribed limits he was entitled to the return of the same. With regard to silver and silver ornaments, the case of Respondent No. 1 appears to be that as Customs and Excise authorities had no authority to seize these items under the Gold Control Act, the seizure of these items was illegal. The learned Single Judge accepted the case of the Respondent No. 1, holding that quantity of primary gold and gold ornaments found in possession of Respondent No. 1 being within the prescribed quantities under Section 16(5), the Respondent No. 1 was entitled to their return. As he was also of the opinion that the seizure of silver and silver ornaments was not authorised, he held, that the Respondents No. 1 was entitled to get back the same. Aggrieved, the Customs and Excise Department has filed the present appeal.
(3.) THE submission made on behalf of the Appellants before us was that as the Act completely prohibits the possession of primary gold, the view taken by the learned Single Judge that Respondent No. 1 could lawfully keep 21 gms. of primary gold is erroneous. It was further urged, that as the Respondent No. 1 was carrying on the business of a gold dealer without obtaining licence, the authorities were entitled under Section 71 to take action against him for the breach of Section 27.;