1981 (9) TMI 125 - HC - Central Excise

Seizure - Voluntary disclosure - Gold confiscated before declaration - Immunity from prosecution

Issues Involved:
1. Full and proper disclosure under the Voluntary Disclosure of Income and Wealth Act, 1976.
2. Ownership and possession of gold and gold jewellery at the time of declaration.
3. Seizure under the Gold Control Act.
4. Pending proceedings under the Gold Control Act.
5. Compliance with Section 16(1)(A) of the Voluntary Disclosure of Income and Wealth Act, 1976.
6. Discrepancy in the declared quantity of gold.
7. Maintainability of the writ petition by the first respondent.

Detailed Analysis:

1. Full and Proper Disclosure:
The court held that there was a full disclosure as required by Sections 14 and 15 of Act 8 of 1976. The Income-tax Department accepted this disclosure, and thus, it was not open for the Collector of Central Excise to contest the validity of the disclosure.

2. Ownership and Possession:
The court determined that since the Income-tax authorities had not exercised the power of sale over the seized gold and jewellery, the first respondent continued to be the owner and possessor of the property. Therefore, the first respondent was deemed to own and possess the gold and jewellery at the time of making the voluntary disclosure.

3. Seizure under the Gold Control Act:
The court found that the seizure was not made under the Gold Control Act. The involvement of Central Excise inspectors in assisting the Income-tax authorities did not constitute a seizure under the Gold Control Act. Additionally, even if there was a seizure by the Gold Control officer, it ended after six months as per Section 66(3) of the Gold Control Act, rendering no subsisting seizure at the time of the declaration.

4. Pending Proceedings:
The court concluded that no proceedings were pending under the Gold Control Act at the time of the declaration. The mere fact that a letter was sent to record a statement did not constitute a proceeding. There was no accusation, charge, or show cause notice issued to the first respondent, which are necessary to commence a proceeding under the Gold Control Act.

5. Compliance with Section 16(1)(A):
The court held that the first respondent complied with Section 16(1)(A) of Act 8 of 1976. The necessary entries were made in the accounts, registers, and documents maintained under the Gold Control Act, and these were verified by the Central Excise authorities. Therefore, the first respondent fulfilled the requirements for immunity under the Gold Control Act.

6. Discrepancy in Declared Quantity of Gold:
The court rejected the appellant's argument regarding the discrepancy in the weight of gold. The discrepancy arose due to differences in the weighing methods of the Income-tax and Central Excise departments. The court found that the declaration under Act 8 of 1976 covered the entire quantity of gold seized by the Income-tax department.

7. Maintainability of the Writ Petition:
The court held that the writ petition was maintainable. The first respondent, as a member of the Association of Persons (A.O.P.) and as the person making the declaration under Act 8 of 1976, was entitled to the return of the seized gold and jewellery. The court dismissed the appellant's contention that the writ petition was not maintainable because the declaration was made by the first respondent's son.

Conclusion:
The court dismissed the writ appeal, affirming that the first respondent was entitled to the release of the seized gold and jewellery, subject to the payment of all subsisting tax liabilities. The court also provided directions for the release of the gold and jewellery in a manner that would facilitate the payment of tax arrears by the first respondent. The request for leave to appeal to the Supreme Court was refused as no substantial question of law of public importance was involved.

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