1959 (12) TMI 49 - HC - Customs

Summary

Issues Involved:
1. Validity of the order of confiscation of gold passed by the Additional Collector of Customs.
2. Denial of the right to cross-examine witnesses.
3. Application of the principles of natural justice.
4. Legality of the confiscation of mixed smuggled and unsmuggled gold.
5. Right to a personal hearing.
6. Application of Section 178-A of the Sea Customs Act.

Issue-Wise Detailed Analysis:

1. Validity of the order of confiscation of gold passed by the Additional Collector of Customs:
The petitioners challenged the validity of the order dated 13th June 1959, passed by the Additional Collector of Customs, which confiscated 103 tolas and 29 vals of gold and imposed fines in lieu of such confiscation. The petitioners argued that they were innocent purchasers for value without notice of the gold being smuggled and that the order was passed without observing the principles of natural justice.

2. Denial of the right to cross-examine witnesses:
The petitioners contended that the statements made by Bansilal Sagarmal Porwal, Dina Mangtu, and Julio Lobo were relied upon by the Additional Collector of Customs without giving the petitioners an opportunity to cross-examine these witnesses. The court noted that the statements were taken before the seizure of gold and that the petitioners were not given a chance to test the veracity of these statements, which violated the rules of natural justice.

3. Application of the principles of natural justice:
The court emphasized that proceedings under Section 167(8) of the Sea Customs Act are quasi-judicial and must observe the rules of natural justice. Citing Supreme Court decisions, the court reiterated that a party should have the opportunity to cross-examine witnesses whose statements are used against them. The court held that the denial of this opportunity in the present case rendered the order invalid.

4. Legality of the confiscation of mixed smuggled and unsmuggled gold:
The court examined whether the Additional Collector of Customs had the authority to confiscate gold that was mixed with smuggled and unsmuggled gold. The court found that the smuggled gold had been fused with unsmuggled gold, making it impossible to separate the two. The court ruled that the right to confiscate smuggled goods does not extend to unsmuggled goods, and the entire quantity of mixed gold could not be confiscated.

5. Right to a personal hearing:
The court discussed whether the petitioners had a right to a personal hearing. It was noted that while a written representation was submitted, the petitioners were not given an oral hearing. The court referred to previous judgments, indicating that the right to be heard does not necessarily include the right to an oral hearing. However, the court found that the denial of the opportunity to cross-examine witnesses was a more significant breach of natural justice.

6. Application of Section 178-A of the Sea Customs Act:
The Additional Collector of Customs did not rely on the presumption under Section 178-A of the Sea Customs Act for the adjudication. The court did not address the constitutional validity of Section 178-A, as it was not invoked in this case. However, the court mentioned that it was bound by a previous decision upholding the validity of Section 178-A.

Conclusion:
The court set aside the order of the Additional Collector of Customs, dated 13th June 1959, due to the violation of the principles of natural justice. A writ of mandamus was issued to restore possession of the seized gold to the petitioners. The petition against the Union of India was dismissed as it was not pressed by the petitioners. The respondents were ordered to pay the petitioners' taxed costs.