1962 (4) TMI 2 - HC - Customs

Summary

Issues Involved:
1. Legality of invoking Section 178-A of the Sea Customs Act.
2. Violation of natural justice in relying on statements recorded behind the petitioner's back.
3. Reasonableness of the Collector's order in confiscating the gold.
4. Grounds for issuance of a writ of certiorari or mandamus.

Issue-wise Detailed Analysis:

1. Legality of Invoking Section 178-A of the Sea Customs Act:
The petitioner challenged the invocation of Section 178-A, arguing that there was no "reasonable belief" that the gold was smuggled at the time of seizure. The court noted that the gold was initially detained by police and later handed over to Customs. The "reasonable belief" was based on the statement from Chunilal of M/s. Amichand Nagindas and the uncommercial conduct of the petitioner. The court held that the Collector's belief was reasonably founded on these circumstances, and thus, Section 178-A was correctly applied.

2. Violation of Natural Justice:
The petitioner contended that the Collector's reliance on Chunilal's statements, recorded behind his back, violated natural justice. The court found that the petitioner was aware of Chunilal's stance and had access to his statements. The petitioner did not request to cross-examine Chunilal, and there was no procedural irregularity or miscarriage of justice. Thus, the court rejected the claim of a breach of natural justice.

3. Reasonableness of the Collector's Order:
The court examined whether the Collector's decision to confiscate the gold was unreasonable. The Collector found the petitioner's explanations for the gold's origin and the transaction with M/s. Amichand Nagindas unconvincing. The court noted that the petitioner's business was run on borrowed capital, making it unlikely for him to incur a loss willingly. The petitioner's conduct, including sending a special messenger and incurring additional expenses, was seen as commercially irrational. The court concluded that the Collector's finding that the gold was contraband was not plainly unreasonable or perverse.

4. Grounds for Issuance of a Writ:
The court considered whether there were grounds for issuing a writ of certiorari or mandamus. The petitioner failed to demonstrate an error of law or excess of jurisdiction by the Collector. The court found no evidence of a decision made with a closed mind or in violation of natural justice. Consequently, the court dismissed the writ petition and the alternative remedy by way of mandamus.

Conclusion:
The court upheld the Collector's order of confiscation, finding the application of Section 178-A appropriate and the Collector's decision reasonable. The court also found no violation of natural justice and no grounds for issuing a writ of certiorari or mandamus. The writ petitions were dismissed.