Manoj Saw Alias Manoj Kumar vs. The State Of Bihar And Ors
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The petitioner, Manoj Saw, operates a business named Jagdamba Galla Bhandar and is GST registered. Authorities raided his shop and seized 123 quintals of wheat, suspecting it to be government subsidized wheat meant for public distribution. This led to the registration of Lakhisarai P.S. Case No. 722 of 2018 under Section 7 of the Essential Commodities Act, 1955. Subsequently, a confiscation proceeding was initiated, resulting in Confiscation Case No. 60 of 2018, pending before the District Magistrate, Lakhisarai. The petitioner received a notice in this confiscation case, which he is challenging. He also seeks the release of the seized wheat, fearing it will get damaged and lose value.
Held
The Court held that the prayer for quashing the confiscation notice cannot be allowed at this stage, as it would amount to quashing the entire confiscation case. The petitioner has the opportunity to file a show cause within 30 days, and the District Magistrate is directed to consider it and pass an appropriate order within three months of filing the show cause. Regarding the release of wheat, the Court found the petitioner's submission reasonable. It directed the petitioner to make an application for release of foodgrains to the District Magistrate-Collector, Lakhisarai, who shall decide it independently within 15 days. The District Magistrate may direct release on terms or, if not releasing, may auction the wheat within 30 days, depositing the proceeds in the treasury. The Court emphasized that the wheat should not be allowed to get destroyed. Before release or auction, samples must be taken and tested for the criminal case. The writ application was disposed of with these directions.
Key Issues
1. Whether the High Court should quash the notice dated 04.12.2018 issued in Confiscation Case No. 60 of 2018, thereby interfering with the ongoing confiscation proceedings before the District Magistrate? Petitioner's argument: The seized wheat is likely to get damaged and lose its consumable value, especially during the rainy season, if not released. Therefore, it should either be released on suitable terms or auctioned, with the proceeds deposited in the treasury, pending the outcome of the confiscation proceeding. Revenue's argument: The petitioner has an adequate remedy to show cause before the confiscating authority and satisfy them why the wheat should not be confiscated. Interference at this stage is not warranted. The petitioner can also file an application before the Collector/Confiscating Authority seeking release of the foodgrains.
Sections Cited
Section 7 of the Essential Commodities Act, 1955
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Cause title — parties, addresses and appearances
ORAL ORDER 2 04-07-2019 Heard learned Senior Counsel for the petitioner and learned counsel representing the State. Petitioner, in the present case, is seeking a writ of certiorari to quash the notice dated 04.12.2018 issued in Confiscation Case No. 60 of 2018 contained in Annexure ‘4’ to the writ application. He has also prayed for a direction to the respondent nos. 1 and 6 to release the wheat seized from the shop of the petitioner details of which is mentioned in the seizure list contained in Annexure ‘1’. It is the case of the petitioner that he is running his 2/5 own private business in the name and style of Jagdamba Galla Bhandar having GST registration with the Commercial Taxes Department. The allegation against him is that when the godowns of (1) Om Prakash Saw, (2) Binod Saw and this petitioner were raided on secret information by the informant and other officers, they seized 123 quintals of wheat which allegedly seem to be the government subsidized wheat meant for public distribution. Seizure was thus made, FIR giving rise to Lakhisarai P.S. Case No. 722 of 2018 dated 07.11.2018 has been registered under Section 7 of the Essential Commodities Act, 1955. A confiscation proceeding has also been initiated giving rise to Confiscation Case No. 60 of 2018 which is pending consideration before the District Magistrate, Lakhisarai (respondent no. 1). In connection with the said confiscation case notice has been now served upon the petitioner which is under challenge in this case. Learned Senior Counsel for the petitioner submits that during pendency of the confiscation proceeding if the wheats in question are not released, those are likely to get damaged and over the period particularly during the rainy season they would lose their consumable values. Learned Senior Counsel has, thus, submitted that either those goods be allowed to be released in 3/5 favour of the petitioner on such terms and conditions which may be deemed just and proper or be sold out in market by auction sale in accordance with law and the money be deposited in the treasury subject to result of the confiscation proceeding, but in no case the wheats are allowed to get damaged. Learned counsel for the State is present and has opposed the prayer for quashing of the noticed dated 04.12.2018 as according to him petitioner has an opportunity to show cause in the confiscation case and to satisfy the confiscating authority as to why the wheats in question are not liable to be confiscated, therefore no interference is required at this stage. Learned counsel also submits that the petitioner has a remedy by filing
an appropriate
application
before
the Collector/Confiscating Authority seeking release of foodgrains. In the given facts and circumstances of the case, this Court is of the considered opinion that so far as the first prayer of the petitioner for quashing of the confiscation notice is concerned, the same cannot be allowed at this stage because that would amount to quashing the confiscation case itself. The petitioner has an opportunity to appear before the Confiscating Authority and file a show cause and plead all such points which are available to him. If the petitioner submits his show cause 4/5 pursuant to the aforesaid notice within 30 days from today, the District Magistrate-cum-Collector, Lakhisarai is directed to consider the same and proceed with the confiscation case to pass an appropriate order within a period of three months from the date of filing of the show cause.
As regards release of wheats, this Court is of the considered opinion that the submission of learned Senior Counsel is a fairly reasonable submission. In a confiscation case ultimately a civil liability is fixed upon a person who is liable to compensate the State to the extent of the value of the goods seized but in the nature of the present case where the goods seized remain under seizure and get destroyed for the period nobody is going to be benefited. The ultimate looser will be State and, therefore, this Court grants liberty to the petitioner to make an application before the District Magistrate-Collector, Lakhisarai for release of the foodgrains on such terms and conditions which may be deemed just and proper, the District Magistrate, Lakhisarai shall take an independent decision in the matter on the application of the petitioner within a period of 15 days from the date of the filing of the said application and in ultimate analysis he may either direct for release of foodgrains on such terms and conditions which he may deem just and 5/5 proper to protect the interest of the State. However, in case the District Magistrate decides not to release the foodgrains for any cogent and reasonable ground, he may proceed to sale the wheat in accordance with law within next 30 days and whatever amount is obtained from the auction sale of the wheat shall be deposited in the treasury which the petitioner may claim if he ultimately succeeds in the confiscation proceeding but in no case wheat should be allowed to get destroyed. Since the criminal case is still pending, the District Magistrate shall before release or auction sale, as the case may be, of the wheats take appropriate steps to keep the samples of the wheats, get them tested and take all such steps which may be required by the prosecution in connection with criminal case but all these exercise be completed within the aforesaid period. This writ application stands disposed off with the aforesaid observations and directions.
arvind/-ved (Rajeev Ranjan Prasad, J) U
Reproduced from the public record of the Patna High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.