1982 (9) TMI 233 - HC - Central Excise

Summary

Issues:
1. Seizure of gold jewellery by the third respondent under the Gold (Control) Act, 1968.
2. Legality of the seizure and the justification provided by the third respondent.
3. Compliance with the Gold Control Act and Rules regarding maintaining accounts and balance.
4. Reasonable cause for the seizure of the gold jewellery by the third respondent.
5. Justification for the seizure of 495 pieces of gold jewellery versus 66 pieces of gold jewellery.

The petitioner, a licensed dealer in Gold, conducted business in Gold Jewellery from his licensed premises in Nellore and also from outside. The third respondent seized 561 pieces of gold jewellery from the petitioner, alleging contravention of the Gold (Control) Act, 1968. The petitioner filed a Writ Petition seeking the return of the seized gold jewellery, challenging the legality of the seizure. The third respondent justified the seizure on the grounds that the petitioner was not authorized to conduct business outside his licensed premises and failed to maintain proper accounts as required by the Gold Control Act and Rules. The third respondent contended that the petitioner's failure to strike a balance in the G.S. 12 Account and the lack of entries for 66 pieces of gold jewellery justified the seizure.

The key question was whether the third respondent had reasonable cause to believe that the petitioner contravened the Gold Control Act concerning the seized gold jewellery. The court found that the seizure of 495 pieces of gold jewellery lacked justification as they were properly entered in the G.S. 12 Account, and the failure to strike a balance alone did not warrant seizure. However, regarding the 66 pieces of gold jewellery not accounted for in the G.S. 12 Account, the court held that it provided sufficient reason for the third respondent to believe a contravention had occurred. Despite this, the court ruled that the reasonable belief regarding the 66 pieces of gold could not justify seizing all the gold jewellery. Consequently, the court set aside the seizure order for 495 pieces of gold jewellery but confirmed the seizure for the 66 pieces of gold jewellery.

In conclusion, the court found the seizure of 495 pieces of gold jewellery unjustified due to proper accounting, while the seizure of 66 pieces of gold jewellery was deemed justified based on non-compliance with accounting requirements. The judgment highlighted the importance of maintaining accurate records and the need for a valid basis to justify seizures under the Gold Control Act.