1984 (8) TMI 203 - HC - Central Excise

Issues Involved:
1. Validity of possession of gold bars under the Gold (Control) Act, 1968.
2. Requirement of declaration for primary gold.
3. Confiscation of gold under Section 71(1) of the Act.
4. Constitutionality of confiscation under the Act.

Issue-wise Detailed Analysis:

1. Validity of possession of gold bars under the Gold (Control) Act, 1968:
The petitioners claimed that the gold bars were gifted to them by their father in 1959, evidenced by a document of the same date. The gold bars were seized during a raid by Central Excise Officers in 1974, leading to proceedings under the Gold (Control) Act, 1968. The initial authority held that the possession of gold bars violated Section 8(1) of the Act, leading to their confiscation under Section 71(1). The appellate and revisional authorities upheld this decision. The petitioners argued that the Act did not explicitly prohibit possession of gold and that they were exonerated under Section 16(ii), which should preclude action under Section 8(1).

2. Requirement of declaration for primary gold:
The court examined various definitions and provisions under the Act, including 'article,' 'gold,' 'ornament,' and 'primary gold.' It noted that Section 16 of the Act, which deals with declarations, does not specifically require declarations for primary gold, except as mentioned in Section 12. Section 8(1) imposes a ban on owning or possessing primary gold unless otherwise provided in the Act. The court clarified that Section 16(ii) pertains to gold required to be included in a declaration, which does not apply to primary gold unless it falls under Section 12. Therefore, the petitioners' exoneration under Section 16(ii) does not exempt them from the prohibition under Section 8(1).

3. Confiscation of gold under Section 71(1) of the Act:
Section 71(1) of the Act mandates confiscation of any gold that contravenes the provisions of the Act. The court emphasized that the ban on primary gold ownership under Section 8(1) is unequivocal unless an exception under Section 12 applies. Since the petitioners did not claim that their gold bars fell under Section 12, their possession was illegal, warranting confiscation. The court referenced a Delhi High Court judgment (Vipin Maneklal v. Sushil Kumar) which supported the view that Section 8(1) does not allow retention of primary gold through declarations under Section 16(ii).

4. Constitutionality of confiscation under the Act:
The petitioners argued that the confiscation violated constitutional provisions related to property rights. However, the court noted that the cases arose before the Forty-Fourth Amendment, which deleted property rights provisions from the Constitution. It held that possession of primary gold in violation of the Act renders it contraband, stripping it of property rights and making it subject to confiscation under Section 71(1). The court found no merit in the constitutional challenge, aligning with the Delhi High Court's view that confiscation of contraband does not infringe on property rights.

Conclusion:
The court dismissed the writ petitions, upholding the confiscation of gold bars under Section 71(1) of the Gold (Control) Act, 1968, and rejecting the constitutional challenge. The petitioners were ordered to pay costs of Rs. 1000/-.

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