1990 (12) TMI 97 - HC - Central Excise

Summary

Issues:
Service of notices in accordance with Section 79 of the Gold (Control) Act, 1968.

Analysis:
The case involved the seizure of three gold bars from the possession of the petitioners by Central Excise Officers. The investigation led to the issuance of show cause notices under Section 79 of the Gold (Control) Act. The notices were dispatched but returned due to non-availability of the addressees. They were eventually served after an extension was granted by the Collector of Central Excise. The main issue was whether the service of notices complied with the Act's provisions, specifically the timeline for serving notices after the seizure.

The petitioners argued that the service of notices on 18-5-1985, one day after the six-month period from the seizure, was in violation of Section 79. They also challenged the extension granted without giving them an opportunity to make representations. The petitioners relied on a Supreme Court decision emphasizing the need for safeguards when granting extensions under the Act.

The respondents explained the reasons for the delay in serving the notices and defended the extension granted by the Collector. They contended that the extension was communicated to the parties, although the petitioners claimed they were not given an opportunity to respond to the extension. The court had to determine whether the service of notices adhered to the mandatory provisions of Section 79, considering the guidelines set by the Supreme Court.

Referring to previous Supreme Court decisions, the court highlighted the importance of adhering to procedural safeguards when granting extensions under similar provisions in other statutes. Despite a one-day delay in serving the notices, the court held that it was fatal due to the mandatory nature of the provisions. The court criticized the department for not obtaining an extension order in line with the Supreme Court's guidelines, emphasizing the need to understand and implement the law as interpreted by the highest court.

Ultimately, the court ruled in favor of the petitioners, finding that the service of notices did not comply with Section 79 of the Gold (Control) Act. The writ petitions were allowed, ordering the return of the primary gold seized from the first petitioner's possession within two months from the date of the order.