Bhagwati Prasad Soni @ Bhagwati Prasad Tosawar vs. The Assistant Commissioner Centralexcies& Ors

Facts

The petitioner, Bhagwati Prasad Soni, filed a writ petition challenging the inaction of the Central Excise authorities in releasing 516.300 grams of gold seized on January 12, 1979, from his premises. The gold was found in an almirah in his father, Dura Ram Soni's, bedroom, which the petitioner was using. Adjudication proceedings were initiated, culminating in an order on January 3, 1981, by the Collector, Central Excise. The petitioner was issued a show-cause notice for contravention of provisions of the Gold (Control) Act, 1968. The petitioner admitted the gold was seized from his father's almirah but claimed he was sleeping there in his father's absence. The adjudicating authority found the gold to be in the petitioner's custody and ordered its confiscation, release upon payment of a fine of Rs. 42,000. This order was challenged before the Appellate Tribunal, which reduced the penalty to Rs. 50,000 but otherwise confirmed the order. Subsequent proceedings, including a reference application and a writ petition, were dismissed. The petitioner has been seeking the release of the gold, but the respondent authorities have imposed new conditions, including a 'No Objection Certificate' from all successors of the deceased father.

Held

The Court held that the action of the respondent authorities in not releasing the seized gold in favour of the petitioner is arbitrary and illegal. The Court found the condition of producing a 'No Objection Certificate' from all successors of the late Dura Ram Soni to be irrational and unsustainable in law. The reasoning was that during the lifetime of Sri Dura Ram Soni, the Adjudicating Authority had passed an order for the release of the seized gold in favour of the petitioner, and this order had not been interfered with by any higher forum. Therefore, the Court allowed the writ petition. The operative directions were that the petitioner must deposit the fine amount of Rs. 42,000 and penalty of Rs. 50,000, along with identity documents and proof of payment as per condition (i) of the intimation dated 6th/7th September 2018, within two weeks. The petitioner must also submit an Indemnity Bond equal to the value of the seized gold. The respondent authorities are directed to release the seized gold within four weeks of the petitioner's compliance. No issue was expressly left undecided.

Key Issues

1. Whether the respondent authorities have acted arbitrarily and illegally by not releasing the seized gold in favour of the petitioner, despite a final adjudication order and subsequent modifications by the Appellate Tribunal directing its release upon payment of fine and penalty. 2. Whether the imposition of a new condition requiring a 'No Objection Certificate' from all successors of the deceased owner of the premises (petitioner's father) is legally sustainable, given that the original adjudication order was passed in favour of the petitioner and has not been set aside. Petitioner's arguments: The petitioner contended that the respondent authorities are acting arbitrarily by not releasing the seized gold, which was ordered to be released in his favour by the adjudicating authority and confirmed by the Appellate Tribunal. He argued that the new conditions, particularly the requirement for a 'No Objection Certificate' from his father's successors, are irrational and unsustainable as they were not part of the original orders. He highlighted that the adjudication order was passed in his favour during his father's lifetime and was never challenged by the respondents on this ground. Revenue's arguments: The respondent authorities, represented by Mr. Dey, stated they are willing to release the gold subject to three conditions: (i) proof of payment of fine/penalty, (ii) documents proving identity as claimant, and (iii) a 'No Objection Certificate' from all successors of the late Dura Ram Soni. Mr. Dey justified the third condition by stating that the petitioner had retracted his statement about ownership, and since his father had expired, the NOC was necessary. He had no answer when questioned why the adjudication order was passed in the petitioner's favour if the gold belonged to his father.