1984 (8) TMI 210 - HC - Central Excise

Summary

Issues Involved:
1. Legality of possession and confiscation of primary gold under the Gold (Control) Act, 1968.
2. Interpretation of relevant provisions of the Gold (Control) Act, 1968.
3. Constitutionality of confiscation in relation to property rights.

Issue-wise Detailed Analysis:

1. Legality of possession and confiscation of primary gold under the Gold (Control) Act, 1968:

The petitioners argued that they were gifted gold bars by their father on 4-2-1959, which were seized during a raid on 17-8-1974. The authorities initiated proceedings under the Gold (Control) Act, 1968, resulting in the confiscation of the gold bars under Section 71(1) of the Act. The petitioners were exonerated from culpability under Section 16(11) of the Act by the third respondent. However, the possession of the gold bars was deemed to fall within the mischief of Section 8(1) of the Act.

2. Interpretation of relevant provisions of the Gold (Control) Act, 1968:

The petitioners' counsel argued that the Act did not explicitly prohibit holding or possessing gold and that the petitioners should not be penalized under Section 8(1) of the Act since they were exonerated under Section 16(11). The court examined definitions and provisions, including Section 2(b) (article), Section 2(j) (gold), Section 2(p) (ornament), and Section 2(r) (primary gold). Section 8(1) prohibits possession of primary gold unless otherwise provided in the Act. Section 12 provides an exception for primary gold in public religious institutions, which must be declared. Section 16 requires declarations for articles and ornaments but not for primary gold, except as specified in Section 12. The court concluded that Section 8(1) applies to primary gold, and exoneration under Section 16(11) does not shield the petitioners from Section 8(1).

3. Constitutionality of confiscation in relation to property rights:

The petitioners contended that the confiscation violated constitutional provisions on property rights. The court noted that the cases arose before the Forty-fourth Amendment, which modified property rights. However, the court found the argument lacking substance. The possession of primary gold after the Act's commencement, without compliance with the Act's provisions, renders such possession illegal, making the gold contraband subject to confiscation under Section 71(1). The court held that confiscation of contraband does not violate constitutional property rights.

Conclusion:

The court dismissed the writ petitions, affirming the confiscation of the gold bars under Section 71(1) of the Gold (Control) Act, 1968. The court emphasized that the petitioners' exoneration under Section 16(11) did not exempt them from the prohibition under Section 8(1). The confiscation was deemed lawful and consistent with the Act's provisions. The court also rejected the argument that confiscation violated constitutional property rights, as the gold, being contraband, did not retain the legal attributes of property. The petitioners were ordered to pay costs of Rs. 1,000.