Pradyot Kumar Banerjee, J. - (1.) This Rule is directed against an order of confiscation made by the Collector of Central Excise and Customs, West Bengal under Rule 126 M of the Defence of India Rules, 1962 (Part XIIA Gold Control). It appears that a show cause notice was issued on 3rd April, 1968 under the Gold Control Rules framed under the Defence of India Rules. There was a search and seizure of the golds and gold ornaments etc. on 13th September, 1966 and 14th September, 1966 from the petitioner admittedly under the Customs Act, 1962. In the meantime, there was ex-parte order extending the time for issuing the show cause notice on 10th March, 1967, 10th May, 1967 and 2nd June, 1967 under the Customs Act, 1962. In pursuance of the show cause notice issued on 3rd April, 1968 under the Defence of India Rules (Gold Control--Part XIIA) the order of confiscation was made on 18th November, 1970. Thereupon the petitioner moved this Court and obtained the present rule without going in appeal to the appellate authority. The show cause notice is annexure "B" to this petition. The show cause notice was purported to have been given under the provision of Defence of India Rules, 1962 (Gold Control-Part XIIA) for contravention of the said rule and it was stated therein that the petitioner was asked to show cause why penalty should not be imposed on them under Rule 126 L(16) of the Defence of India Rules and why the gold and gold ornaments etc. in which offence appears to have been committed should not be confiscated under Rule 126 M(1) of the Defence of India Rules, 1962 (Part XIIA). In the statement of allegation it is stated, inter alia that the gold and gold ornaments etc. and other articles were seized by the Customs Officer on the reasonable belief that the provision of the Customs Act, 1962 have been violated in respect of them. On receipt of the report from the seizing officer, the Gold Control aspect of the case was examined and it was reasonably believed that the provisions of Defence of India Rules, 1962 (Part XIIA--Gold Control) have also been violated in respect of the gold and gold ornaments as described in the statement allegations." The petitioners replied to the show cause notice and after the hearing the Collector of Customs & Excise, West Bengal, by order dated 18th November, 1970 the following order was passed. "Having regard to the facts and circumstances of the case, I order under Rule 126M(1) of the Defence of India Rules, 1962 (Part XIIA - Gold Control) absolute confiscation of 16 gold guineas, 2 United States Gold coins, 3 Indian gold mohurs, 1 Nepalese gold coin and 26 ancient gold coins weighing in all 351.17 grammes together with one crude bangle weighing 133.47 grammes. I also order confiscation of gold ornaments weighting in all 39.5889 grammes gross and 39.08 grammes net under the aforesaid rule. I however, allow Shri Mahadeolal Khaitan an option to redeem the aforesaid gold ornaments on payment of a fine of Rs. 700/- (Rupees seven hundred only) under Rule 126 M(8) ibid with 3 months. I also impose penalty of Rs. 8000/- (Rupees eight thousand only) on Shri Mahadeolal Khaitan and of Rs. 3000/- (Rupees three thousand only) on Shri Narendraput Singh Dugar under Rule 126 L (16) of the said rules."
(2.) Before I deal with the case of the parties, following dates regarding the legislative enactment touching the case are relevant. In 1962, Defence of India Rules were promulgated. On 9th January, 1963 part XIIA was inserted in the Defence of India Rules which contained Rule 126A to Z. In 1965, Gold Control Act was passed but the said Gold Control Act was not brought into force as no notification was made under S.(3) of the said Act. On 29th June, 1968, Gold Control Ordinance, 1968 was promulgated. The said Ordinance repealed part XIIA of the Defence of India Rules, 1962 but there was a saving clause in the said ordinance by which part XIIA of the Defence of India Rules was sought to be kept alive. On 24th August, 1968, Gold Control Act, 1968 was passed which was brought into force on 1st September, 1968 by notification of the Union of India under Section 1(3) of the Act. The said Gold Control Act provided some saving clauses in Section 116(2) of the Gold Control Act. The said Section 116(2) is in the following terms: "116(2). Notwithstanding such repeal, anything done or any action taken, including any notification order or appointment made, direction given, notice licence or certificate issued, permission, authorisation or exemption granted, confiscation adjudged, penalty or fine imposed, or forfeiture ordered, whether under the Gold (Control) Ordinance, 1968, or part XIIA of the Defence of India Rules 1952, shall in so far as it is not inconsistent with the provisions of this Act, be deemed to have been done, taken, made, given, as the case may be, under the corresponding provision of this Act, as if this Act had commenced on the 29th day of June, 1968."
(3.) Mr. Dipankar Ghosh on behalf of the petitioner challenges the show cause notice and the order of confiscation on four grounds. Firstly it is argued by Mr. Ghosh that the seizure of gold being under the Customs Act, the said seized gold etc. cannot be confiscated under Rule 126 M as there being no seizure under the Rule 126 L of the Defence of India Rules. Secondly it is contended that the formation of opinion under Rule 126 L(b) of the Defence of India Rules not being in the mind of the seizing officer at the time of seizure, there was no seizure in the eye of law under the Gold Control Rule and as such there cannot be any order or confiscation under Rule 126 M of the Defence of India Rules. It is argued by Mr. Ghosh that the notice under the Gold Control Rules as hereinbefore stated does not survive as it is inconsistent with Section 79 of the Gold Control Act, 1968 and therefore not saved by Section 116(2) of the said Act. Even assuming that the order of confiscation is saved under Section 71 of Gold Control Act, but the said section was struck down by the Supreme Court in the case AIR 1971 SC 1170 (Badri Prasad v. Collector, Central Excise) . Mr. Ghosh lastly argued that Rules 126 L and 126 M of the Defence of India Rules Part XIIA ate ultra vires the Constitution of India partly on reasoning given in the Supreme Court judgment in the case while it struck down Section 71 of the Gold Control Act.;