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TMI Blog1975 (3) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... n the first place, the learned Advocate for the petitioners has contended that a combined show cause notice in respect of the alleged offences under the Customs Act, 1962, Foreign Exchange Regulation Act, 1947 and the Defence of India Rules, 1962 was bad in law. I am unable to accept this submission. According to the said show cause notice, dated June- 3, 1965, issued by the Assistant Collector of Customs for Preventive (I), Customs House, Calcutta (vide Annexure 'A' to the petition) on information a party of Customs Officers led by the Assistant Collector of Customs, Preventive (I) had reached the premises No. 7, Nalini Seth Road, Calcutta 7 occupied by Messrs. Shyamlal Sen Company at 7-45 p. m. on May 21, 1965 for search. In course of the search, 142 pieces of gold coins (disc) wrapped in a handkerchief were recovered and seized from inside the oven in the room on the 2nd floor. Rs. 24,900/- in Indian Currency found inside the Iron Safe placed in the guddy was also seized. Tarak Nath Sen, Debnath Sen, Jognath Sen and Mahinath Sen were found inside a room in the 1st floor of the premises. The partners could not produce any documentary evidence to show that the gold coins (disc) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... started against the petitioners and one of their employees in respect of the aforesaid search and seizure at 7, Nalini Seth Road, Calcutta on May (sic), 1967 under Section 135(ii) of the Customs Act, 1962 and under Rule 126-P (2) (ii) of the Defence of India Rules, 1962. The learned Magistrate found the petitioners guilty and convicted them under the aforesaid provisions of the Customs Act and the Defence of India Rules and sentenced the firm to pay a fine of RS. 5,000/- on each of the two counts. The learned Magistrate also sentenced the partners the petitioners Nos. 14 before me to suffer S. I. for nine months each and pay a fine of Rs. 100/- each. They were further sentenced to pay a fine of Rs. 900/-. 5. S. K. Chakrabarti and Borooah, JJ. by their judgment, upheld the conviction of the appellants under the above provisions of the Customs Act. The learned Judges found that the accused persons themselves or someone with their knowledge or on their behalf or at their request or behest had placed those gold discs inside that oven so that they might not be found out by the customs people. The said gold discs were not covered by any declaration and the same were smuggled goods. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d does not exceed two hundred rupees. 7. In the instant case, the show cause notice was issued by the Assistant Collector of Customs, Preventive (I), Calcutta and the Additional Collector of Customs passed the adjudication order confiscating the seized gold and also imposed a penalty of Rs. 10,000/- on each of the petitioners under Section 112 of the Customs Act and Rs. 5,000/- each on them under Rule 126-L (16) of the Defence of India Rules. 8. Under Section 2(8) of the Customs Act, 1962, the 'Collector of Customs' includes an Additional Collector of Customs. The learned Advocate for the petitioners did not contend before me that the Additional Collector of Customs had no jurisdiction to pass final orders in the above adjudication proceeding. According to the learned Advocate for the petitioners the show cause notice was a part of the adjudication proceeding, and, therefore, the Assistant Collector who was not competent in law to either confiscate the seized gold or to impose penalties of Rs. 10,000/- on each of them and the initiation of the adjudication was without jurisdiction and void ab initio. T have elaborately considered the point mentioned above in my judgment in Ku ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hority may have no occasion to look into the grounds before conducting the adjudication proceeding. There will be less chance of bias or formation of any prior opinion by the adjudicating authority. When Section 124(b) does not specifically provide that the person who passes the adjudication order must issue the show cause notice, I am not prepared to accept the submission of the learned Advocate for the petitioners on this point. 10. In the above view, I hold that the show cause notice issued by the Assistant Collector was perfectly legal and valid. The proceeding against the petitioners was lawfully initiated. The learned Advocate for the petitioners also made a grievance that the Additional Collector of Customs by passing the ex parte order had acted in violation of the principles of natural justice. After the petitioners showed cause to the Additional Collector of Customs they had prayed for adjournment of adjudication proceeding till the disposal of the criminal case started against them over the aforesaid search and seizure at premises No. 7, Nalini Seth Road, Calcutta. Although parallel proceedings are not forbidden the Additional Collector in his discretion had stayed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs in his fairly lengthy order has found that the above pieces of gold coins (disc) were seized from the petitioners' possession and the same were smuggled goods. When the petitioners were found to be in possession of smuggled gold under Section 112 they were liable to be penalised for improper importation of the said smuggled goods. Once it was found that the petitioners were in possession of the smuggled gold they cannot question the penalty imposed under Section 112 as erroneous on the face of the record. The question whether the petitioners were in possession of any gold was one of fact and the petitioners did not file any appeal against any adjudication order, T cannot enter into the said question in the absence of any error of jurisdiction on the part of the adjudicating authority. The petitioners did not claim that they had made any return under Rule 126-F of the Defence of India Rules (Gold Control). Therefore, the penalty under Rule 126-L for their alleg-ed omission to do the said act cannot be deemed to be without jurisdiction. 12. The Additional Collector of Customs has imposed a penalty of Rs. 10,000/-each under Section 112 of the Customs Act on the partnership ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tinues. The Indian Act, like the English Act, avoids making a firm a corporate body enjoying the right of perpetual succession.' Again the Supreme Court in The Commr. of Income-tax, West Bengal v. A. W. Figgis Co., while considering the effect of change in the constitution of a firm in the context of the Income-tax Act, 1922 recognised that 'under the law of partnership a firm has no legal existence apart from its partners and it is merely a compendious name to describe its partners.' 15. The Supreme Court again in Duli-chand Laxminarayan v. Commr. of Income-tax, Nagpur, held that a partnership firm cannot enter into a partnership with another firm or Hindu undivided family or individual. S. R. Das, J, (as he then was) at page 358 observed: "It is clear from the foregoing discussion that the law, English as well as Indian, has for some specific purposes, some of which are referred to above, relaxed is rigid notions and extended a limited personality to a firm. Nevertheless, the general concept of partnership, firmly established in both systems of law, still is that a firm is not an entity or "person" in law but is merely an associalion of individuals and a firm name i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtner comprising a firm would be liable for contravention of a provision of law by their firm. 17. Thus, these decisions make it clear that although a firm in mercantile usage has a personality of its own, strictly in the eye of law, it is not a legal entity like a natural person. Therefore, the rights and obligations of a firm are really rights and obligations of the individual partners of the firm. In the instant case, according to the findings made by the Additional Collector of Customs in his adjudication order the petitioners 2 to 4 carrying on business as a partnership firm had contravened provisions of the Customs Act and the Gold Control Rules and were liable for penalties under Section 112 of the Customs Act and under Rule 126-L (16) of the Defence of India (Gold Control) Rules. Therefore, no exception can be taken to imposition of penalties individually upon them. But since the firm is not a legal entity and Section 140 of the Customs Act was inapplicable to the adjudication proceeding, the Additional Collector of Customs by imposing penalties also upon the firm has really twice punished the petitioners Nos. 1 to 4 for the same sets of acts. Therefore, although I propo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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