B.N.Banerjee, J. - (1.) The petitioner company carries on business as importer and dealer of watches. For importation of wrist watches in contravention of import control restrictions, the shop room of the petitioner, at No. 129, Radha Bazar Street, Calcutta, was searched by the Customs authorities, on October 17, 1959, and 390 pieces of wrist watches were seized. The petitioner company tried to explain the possession of the wrist watches on a twofold basis, namely, purchase of the wrist watches locally and receipt of some wrist watches from its customers for repair. In this Rule, I need not concern myself with the earlier phase of the dispute between the petitioner and the Customs authorities, when some of the seized watches were released, order of confiscation was passed in respect of the rest and then again the order was quashed on appeal for non-compliance with the principles of natural justice. Ultimately, on August 21, 1961, there was a notice served upon the petitioner in respect of 280 pieces of wrist watches, requiring the petitioner to show cause why the said watches should not be confiscated as unlawfully imported watches. The material portion of the notice is set out below: "The importation of watches into India without a valid import Trade Licence is prohibited under Section 19 of the Sea Customs Act read with Section 3(1) of the Imports and Exports (Control) Act 1947 and Govt. of India Ministry of Commerce and Industry order No. 17/55, dated 7-12-55 (as amended), the offence being punishable under Section 167(8) of the Sea Customs Act read with Section 3(2) of the Imports and Exports (Control) Act In view of the foregoing, M/s. Kanungo and Co., are required to explain the matter in writing within one week from the date of receipt of this notice. They are also called upon to show cause in writing within the same period of time why the said 280 pcs watches should not be confiscated under Section 167(8) Sea Customs Act read with Section 3(2) of the Imports and Exports (Control) Act 1947 and why penal action should not be taken against them under Section 167(8) of the Sea Customs Act."
(2.) In the earlier part of the notice, there was a long recitation as to why the Customs authorities disbelieved the story of local purchases and custody for repair of some of the watches as alleged by the petitioner.
(3.) The petitioner challenged the notice, before this Court, inter alia, on certain preliminary grounds, namely; (a) "(X) No notification has been issued under Section 19 of the Sea Customs Act and the purported notification dated 7-12-55 does not appear to have been made under Section 19 of the Sea Customs Act and is not a notification under Section 19 of the Sea Customs Act and the provisions of the Sea Customs Act are not attracted to the seized goods and the provisions of Section 167(8) of the said Act does not apply and cannot apply to the seized goods." (b) "(XI) In any case your petitioner firm was carrying on business since 1950 and the said purported notification was issued on 7-12-55 and the said notification does not apply to the facts and circumstances of the present case and your petitioner's goods seized as aforesaid." (c) "(XII) In any easy the order, dated 7th December, 1955, is not a notification under Section 19 of the Sea Customs Act and the said notification does not purport to be under the said section of the said Act and the Respondent had no jurisdiction to apply the provisions of the said order to the seized goods." and obtained a Rule, being Matter No. 216 of 1901. The said Rule was disposed of by consent, on January 25, 1962, on the following terms: "This Rule is disposed of by consent. It is agreed that the customs authorities shall decide grounds 10, 11 and 12 mentioned in paragraph 27 of the petition on which this Rule was issued as preliminary issues first of all. If the customs authorities decide the preliminary issues against the petitioner, then only they will be entitled to proceed with the case against the petitioner on merits. It is further agreed that the petitioner shall file its explanations showing cause against the charges levelled against it within a fortnight from today and the customs authorities shall take up the case against the petitioner within one week thereafter. It is also agreed that the customs authorities shall deliver a judgment on the preliminary issues and then proceed with the case, if at all. The petitioner will have liberty to move against the preliminary judgment if it likes.";