GULAB AND CO Vs. SUPERINTENDENT OF CENTRAL EXCISE PREVENTIVE TRICHY

JUDGEMENT

(1.) THIS is a petition under Article 226 of the Constitution of India for the issue of a writ of mandamus or any other appropriate writ directing such of those respondents who are in possession to return the sum of Rs. 2,38,000, seized from the second petitioner, Shahul Hameed. The facts leading to the filing of this writ petition are these :

(2.) ON information laid before the Inspector of Central Excise, Customs (Preventive), Trichy, that contraband gold was kept concealed in the premises at 3A, Estate Candy Street, Bheemanagar, Trichy, two inspectors of the Central Excise, Customs (Preventive) entered the said premises at or about 4-30 p.m. on November 1, 1972, arming themselves with an authorisation under Section 105 of the Customs Act, 1962. The Superintendent of Central Excise also joined them a little later and the search was completed by about 9 p.m. A sum of Rs. 2,38,500 was found in an open almirah in the room. ON the reasonable belief that out of the said sum of Rs. 2,38,500, a sum of Rs. 2,38,000 was not accounted for and that the said currency related to the sale proceeds of contraband gold, the excise authorities effected the seizure under Section 121 of the Customs Act. The premises was in the occupation of A. Shahul Hameed of Kayalpatnam, the 2nd petitioner herein. The search and seizure were made in the presence of two independent witnesses. ONe Anwar, a relation of the second petitioner, was also present throughout the search. The mahazar prepared was attested by two independent witnesses. A copy of the mahazar was given to the 2nd petitioner and an acknowledgment was obtained. ON November 2, 1972, statements of the 2nd petitioner herein and the said Anwar were recorded. ONe Jamal Mohammed, an advocate at Trichy, sent a telegram on November 3, 1972, to the Superintendent, Customs (Preventive), Trichy, stating that the said amount seized belonged to his client, Gulab & Co., Coimbatore, the 1st petitioner herein, and requesting for return of the same to his clients. ON November 4, 1972, another telegram was received from the counsel, appearing for the petitioners herein, Thiru M.R.M. Abdul Karim Razack, which stated that his client, Shahul Hameed, the second petitioner herein, had instructed him to state that the informer of the Customs department, one Basheer, took Rs. 500 and the Superintendent, Central Excise, seized a sum of Rs. 2,38,500, on November 1, 1972, from his client, that no warrant was shown to his client, that the action was wholly illegal, that a statement was obtained from the 2nd petitioner by threats and intimidation, that a copy of the statement was not given to him, that the entire amount belonged to Gulab Abdul Kader Malick & Co., and that unless the money is returned within two days legal proceedings will be taken against the Superintendent of Central Excise.

(3.) IT is relevant to note certain proceedings taken by the Income-tax Officer, Coimbatore, who is the assessing authority of Gulab & Co., the 1st petitioner herein. On November 16, 1972, the 1st petitioner wrote a letter to the Income-tax Officer, Coimbatore Circle, the 3rd respondent herein, requesting them to issue an estimate form for advance tax for the year 1973-74. The letter proceeded to state that on October 30, 1972, they entrusted a sum of Rs. 2,38,000, to the 2nd petitioner with an intention of starting a new business, namely, film distribution in Trichy. This amount is entered in their account books ; the customs authorities seized the money from the said Shahul Hameed on November 1, 1972, and handed over the same to the Income tax Officer, Trichy; the said Shahul Hameed had declared that the said money did not belong to him. They also produced a statement from Shahul Hameed to the eSect that the money did not belong to him and that it belonged to Gulab and Co. They further requested that since the entire amount is with the Income-tax Officer, Trichy, the advance tax payable by them may be collected from the Income-tax Officer, Trichy. The Income-tax Officer, Coimbatore, issued a notice under Section 132(5) and Rule 112 A(2) to the 1st petitioner stating that a cash amount of Rs. 2,38,500 has been seized from their people at Trichy and that he had reason to think that the money belonged to the 1st petitioner. He had also required the 1st petitioner to furnish particulars regarding the source and whether they are shown in the accounts and if so to produce evidence in support of the same on November 22, 1972. The 1st petitioner replied to this notice on November 21, 1971, stating that they had entrusted the sum of Rs. 2,38,000, to the 2nd petitioner that the sum is fully accounted for in their accounts, that the seizure was bad and illegal and requested for release of the money to them. IT was also stated in this letter that the balance of Rs. 500 belonged to the 2nd petitioner herein. On information that the Income-tax Officer, Trichy, had passed an order on February 3, 1973, holding that the money seized really belonged to the 2nd petitioner and that it represented his concealed income, the Income-tax Officer, Coimbatore, in his proceedings dated February 5, 1973, dropped the proceedings initiated by him against Gulab and Company under Section 132(5) of the Act.