1979 (11) TMI 260 - HC - Central Excise

Summary

Issues:
Interpretation of sections 6 and 16 of the Gold (Control) Act with respect to pawnbrokers' obligations to make declarations of gold possessions.

Analysis:
The petitioners, pawnbrokers lending money on ornaments and gold articles, challenged a notice requiring them to make declarations under the Gold (Control) Act. The petitioners argued that as pawnbrokers, they were not owners of the gold items pawned to them, and thus, section 16 did not apply to them. They contended that they held the items as bailees and did not have actual possession, custody, or control as required by section 16(1). However, the court rejected this argument, stating that section 16 clearly includes persons having possession, custody, or control of gold items, irrespective of ownership. The court emphasized that pawnbrokers fall within the scope of section 16 of the Act.

The petitioners further argued that they could not accurately provide the required details in the declaration forms due to their lack of knowledge about the gold items' fineness and weight, which could lead to prosecution for making false declarations. However, the court disagreed, citing a Supreme Court decision (Badri Prasad v. Collector of Central Excise) that held pawnbrokers are obligated to submit declarations under Form No. GS 3, regardless of their knowledge about the gold items. The court clarified that Form GS 3A only required gross weight details of the items, not the fineness or exact gold quantity.

Based on the Supreme Court precedent and the clear language of the Gold (Control) Act, the court ruled in favor of the respondents, discharging the Rule and vacating interim orders. The petitioners were directed to file necessary returns within two months and comply with the Act's provisions moving forward. The court concluded that the petitioners' arguments were not tenable in light of the legal obligations imposed by the Act, as clarified by the Supreme Court precedent.