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TMI Blog1982 (1) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner's factory at Banastarim, Goa, office premises at Panjim and office premises at Bombay and seized a large number of documents as well as 283.6 metres of cotton coated fabrics valued Rs. 5,672/- under three special panchanamas. Thereafter, investigations began to be carried out by the respondents and statements of the partners of the aforesaid firm were recorded from time to time. On 4th August, 1980, respondent No. 2 served a notice on the petitioner requiring them to show cause why the six months period for investigation should not be extended. Petitioners, in their reply dated 12th August, 1980, submitted that respondents had more than sufficient time for investigations and whatever documents required therefor had been either seized or made available, and as such, there was no reason for the sought extention. A personal hearing of the petitioners in connection with the said show cause notice was fixed at Bombay on 19th August, but petitioners could not attend the said hearing having sought on adjournment. The sought extention was granted and the seized documents were not returned to the petitioners despite requests made by them on the grounds that they were required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner's claim that the retention of documents is unreasonable and illegal. In the circumstances, — Mr. Andhyarujina contended - it was incumbent upon the petitioners to disclose to this Court that certain reliefs relating to inspection of the seized documents had been asked for and obtained from the Bombay High Court and their failure to discharge a duty cast on them to be frank and forthright with the Court amounts to a suppression of material facts that, as held by the Supreme Court in Krishna Khanna v. A.D.M. Kapoor [1975 (2) SCC 361] disentitles them to any relief. Furthermore, petitioners were also bound by the Rules framed by this Court to disclose that another petition had been filed on the same subject-matter, though not on identical issues, and these Rules had been violated by the above suppression. 5. As observed in Krishna Khanna's case above, "it is a well settled proposition of law and this proposition should apply equally in the field of administrative law, that when a party approaches a tribunal for discretionary relief, he must, not only come with clean hands but must also show the utmost good faith and disclose all material facts having a bearing on the exercise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial facts having bearing on the exercise of its discretion by this Court. Therefore, I find no force in the respondents' submission that petitioners are not entitled to any relief on account of their failure to disclose to this Court the filing of the Bombay Writ Petitions. Similarly, as the subject-matter of the Bombay petitions and of the present petition are different and not the same, I am unable to hold that petitioners violated the Rules framed by this Court in respect of the filing of petitions under Article 226 of the Constitution and as such, are not entitled to any relief. 7. I shall now address myself to the questions posed by the petitioners, namely : (i) whether the Notification No. 68/63, dated 4-5-1963 is ultra vires Section 12 of the Excise Act, 1944 insofar it confers the power under Section 110(3) of the Customs Act, 1962; and (ii) whether the provisions of Section 110(3) of the Customs Act, 1962 and void and ultra vires Articles 14 and 19(1)(g) of the Constitution inasmuch as they constitute unreasonable restriction on the freedom to carry on the trade and also are arbitrary. As regards the first point, it was argued by Mr. Ashok Dessai that, the power of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s might be considered necessary and desirable by the Central Government for the purpose of implementation and enforcement of Section 3 of the Act. Hence, as the Sea Customs Act has not been incorporated in the Excise Act, it would not be correct to argue that since the said Act does not provide for the seizure of documents, as the Chapter headings and relevant provisions thereof show, the Notification No. 68/63 is ultra vires Section 12 of the Excise Act because the said Notification confers on the Excise Officers the power to seize documents under Section 110(3) of the Customs Act, 1962. In the circumstances, it would not be necessary to deal with the arguments advanced by Mr. Dessai on basis of the provisions of the Sea Customs Act and its Chapter headings. It would not, however, be out of place to note that, as rightly pointed out by Mr. Andhyarujina, provisions relating to search and seizure, being meant for the detection and prosecution of offences, are generally inserted in any procedure relating to offences and provisions of Sections 105 and 110 of the Customs Act, 1962 relate to search and to seizure of things and documents for the purpose of detecting and investigating off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 935), it was observed :- "Some of the High Courts have thought that this Court had decided in these cases that maximum penalty permissible under the provision is Rs. 1,000/-. The fact is that the question was never required to be decided in any of these cases and could not therefore, have been, or be treated as, decided by this Court. In Leo Roy Frey v. Superintendent, District Jail, Amritsar, 1958 SCR 822 at P. 827 : (AIR 1958 S.C. 119 at P. 121), this Court observed that, `No question has been raised as to the maximum amount of penalty that can be imposed under Section 167(8) and we are not called upon to express any opinion on that point'. This would show that this Court has taken notice of the fact that the High Courts were interpreting the judgment in F.N. Roy's case, 1957 SCR 1151 : [(S) AIR 1957 S.C. 648] and the other cases in a manner which was not intended and desired to strike a note of warning against the misconception. None of these cases is authority for the proposition that the maximum penalty which can imposed under Item 8 in Section 167, is Rs. 1,000/-. The argument that this Court has already held that the maximum of penalty that can be awarded under it is Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 944 confers an unfettered right to appeal to a person aggrieved by any decision or order and Section 129 of the Customs Act requires the appellant to deposit the duty or the penalty pending the appeal. Their Lordships observed that Section 129 of the Customs Act whittles down the right of appeal under Section 35 of the Central Excises and Salt Act and cannot therefore be considered as procedure relating to appeal within Section 12 of the Central Excises and Salt Act. Accordingly, it was held that the said Notification applying Section 129 of the Customs Act is not valid. Searches and seizures undoubtedly pertain to procedure relating to the investigation of offences and as such, the ruling in Bava's case would not lend support to petitioners, case, being not applicable. So also, the Durga Prasad case where the Supreme Court held that the Assistant Collector of Customs and Central Excise has no authority under Rule 126(2) of the Defence of India Rules to order the Superintendent of Customs and Central Excise to seize and take possession of the documents in the premises of the party concerned, because the power granted to the authority empowered under Rule 156 is an ancillary or inci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the return of the seized documents. There cannot be any dispute in respect of the proposition advanced by Mr. Dessai. No doubt, if the power of seizure is wrongly exercised or if the provision is ultra vires, anything recovered by such seizure must be returned. The question that falls, therefore, for consideration is whether the Notification No. 68/63 applying Section 110(3) of the Customs Act, 1962 is ultra vires and whether, in any case, the power of seizure was wrongly exercised. In the light of the above discussion, I have no doubt in holding that the aforesaid Notification applying Section 110(3) of the Customs Act is not ultra vires Section 12 of the Excise Act, which empowers the Central Government to declare, by Notification, that any of the provisions of the Customs Act, 1962 regarding, inter alia, to procedure relating to offences be applicable in regard to like matters in respect of duties imposed by Section 3. I already observed that evasion of duty and its non-payment constitute offences under the Excise Act and Rules and I also held that searches and seizures are part of the procedure relating to the investigation of offences and that, after the enactment of the Cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covered, it would not be correct and proper to hold that the respondents are keeping the documents beyond all reasonableness. In any case, it may be noted that no harm is caused to the petitioners, for they are entitled to inspect the seized documents and to take copies thereof. I, therefore, find that in the circumstances of the case there is no wrongful exercise of the power of seizure by the respondents. 12. The second question raised by the petitioners is that the provision of Section 110(3) of the Customs Act, 1962, is void and ultra vires Article 14 and 19(1)(g) of the Constitution inasmuch as it constitutes unreasonable restrictions on the freedom to carry on the trade and further it is arbitrary. In this connection, it was argued that Section 110 of the Customs Act does not provide any protection relating to the seizure of documents as compared to the seizure of goods, for it does not require the officer to have reason to believe that the documents he desires to seize are useful for or relevant to the proceedings, and in addition, unlike what happens with the goods seized, there is no guarantee of return of the seized documents within a time prescribed and hence, such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of the Criminal Procedure relating to searches and seizures do not apply to the searches and seizures made under the Excise Act. This assumption appears to me to be entirely erroneous in view of the provision of Section 18 of the Excise Act which in terms lays down that all searches made under the Act or any rules made thereunder and all arrests made under the same Act shall be carried out in accordance with the provisions of the Criminal Procedure Code, relating to searches and arrests made under that Code. Therefore, the safeguards extended by the Code of Criminal Procedure in respect of searches accompany the searches made under the Excise Act and as such, it would not be correct to say that the power of search and seizure conferred by Section 110(3) of the Customs Act in vitiated for want of adequate protection and safeguards. In State of Rajasthan v. Rehman, AIR 1960 S.C. 210, the Supreme Court observed that the provisions of the Criminal Procedure Code relating to searches apply to the searches made by the Excise authorities. It was, however, argued that as Section 110(3) provides that the proper officer may seize any documents which in his opinion will be usefu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and seized only if they are useful for, or relevant to, any proceedings under the Act. As such, it is to be deemed that documents which are seized have to be retained by the concerned authorities until the proceedings to which they are relevant or useful are ended. There is, therefore, an inbuilt time limit in the Act itself. Naturally, however, if documents are retained without any necessity, the aggrieved party can always as observed by the Supreme Court in Seth Brother's case, AIR 1970 S.C. 292, move the competent Court for an order releasing the documents, and the concerned officer will be bound to explain in what manner any seized documents were useful and relevant to the proceedings initiated under the Act. The proceedings manifestly relate to the investigation and prosecution of offences under the Act. Such investigation and prosecution naturally takes time and if the seized documents are required for purposes of reliance or support of the investigation and prosecution, it would not be unreasonable that the concerned authorities have to keep the seized documents until the termination of such investigation and prosecution [S. Natarajan v. D. Samson, 1971 (28) SIC 319]. Besi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S.C. 300. Searches and seizures pertain to the procedure related to the investigation and detention of offences and therefore, by its very nature, the exercise of such power is adverse to giving an opportunity to the concerned person to show cause why search should not be conducted and documents and things should not be seized. Such opportunity would render the power to search and seizure meaningless and the very scope of searches and seizures would be defeated. Hence, searches and seizures without prior hearing of the persons who will be subjected to such searches and seizures stand the test of reasonableness and cannot be said to be hit on that count by Article 109(1)(g) of the Constitution. 15. It was further contended on behalf of the petitioners that the power of seizure and retention is invalid because the Excise Act does not provide for any corrective machinery by way of appeal or revision, reliance having been put in this connection in `Pandurang v. Godse; Virendra v. State of Punjab (AIR 1957 S.C. 896); Chandrakant v. Jasjitsingh (AIR 1962 S.C. 204) and K.A. Abbas v. Union of India (AIR 1971 S.C. 481). This contention, however, has no substance at all, for Sections 35 a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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