Kewal Krishan v. State of Punjab

KAPl'H, J.-This is ~.n appeal by special leave against the judgment and order of the High Court of the Punjab and raises tho constitutionality of s.l lliA of the Sc:1 Customs Act, 18iS (Act 8 of 1871'), which ha.H bellfi held by this Court to be con-stitutional in the· Colleclor of Custom.~, Jfa.dra.~ v. N at!u:lla Sarnpa.tl:n Chcll.1f ( 1).

At the time of arguments before us ~ further point was raised that in order that s. J 78A of the ~ea Customs Ac:t may become applicable, the pro-secution must. further prove that the goods which wcrn sought to h" affeckd by the order of the Cus-toms Offirer 1rnre goocls of foreign origin and them must be evidence in Rupport of the reasonablc-ne~s of thl' belief of thP Customs Offic·er that the goods were &mugglcd goods. The question now 8011ght. to he raised was not agitated in any of thn courts below.

The nppcllant on .February I I, I 958, whm1 he wa" sitting in a th ire! class compartment of the Amritsa Kalka train ~tanding on Platform No. ii of the .Amrsar n~.ilway Rta t.ion, Wall searched hy a Customs Offidal anci' S(•mc b3rn of gold were fm;nd tied round his waist. TheHe gold bars were sPized and a recovery memo was prepared. Out oftheRe gold

(!) [1%2~ 3. S.C..R. 786, bars four were of base metal and the rest were of 1162 pure gold some bearing the stamp of Johmon Mathey Kewal Eris/tan & Co. Ltd., 999-10 tolas and 2-1/4 bars bore marks of v. N.M. Rothschild & Sons 10 tolas (990-0). ·No permit Stol• of Punjab from the the Reserve Bank to import this gold was J. produced by the appellant. Under the Foreign Kapur Exchange Regulation Act, 11:147, the importation of gold witho11t such permit is prohibited and such contravention is punishable under s.23-A of the said Act read with s.167 (81) of the Sea Customs Act.

The app"llant was prosecuted under.s.23A of the Foreign Exchange Regulation Act and 167( 81) of the Sea Customs Act and his defence was that he was not in possession of the gold bars which were taken from an attache case left by a stranger under the seat where he (the appellant) was sitting. The Ad-ditional District Magistrate held the offence to be proved and convicted the appellant of the offence and sentenced him to one year's rigorous imprison-ment. An appeal to the Sessions Judge 'resulted in the reduction of the sentence to· 8 months'

rigorous imprisonment. On revision to the High Court the sentence was reduced to six months' rigorous imprisonment. The appellant has come in appeal by special leave.

The trial court accepted the testimony of the Customs Officials and held that the defence of the appellant was false and that gold worth Rs. 14,000/- was found in his possession. The learned Sessions Judge in appeal also accepted the testimony of the Cu;toms Officials and h~ld the defence to be false and canie to the conclusion that the gold was found in possession of the appellant. In the High Court the same plea was taken and was rejected.

For the first time in t.his Court it is contendod that before the presumption under s.178A can be made applicable, it must be proved by the prosecu-tion that the goods were of foreign origin, i.e. had beeH l~I i mpoited from abroad and only then does the pres-

umption under s. l i8A arise which relates only to tho Kewol Kri1hcn question of Customs duty having been paid. In St•le of Punjei other words tho contention comes to this that th~

prosecution must first prove that the goods in dis-pute in a particular case have been imported from a foreign country and once that is proved the onus then will be on the person in whoso possession tho goods :ire found that he had paid the Customs duty. Apart from the fact that this question has never been raised, that is not the effect of s.178A of the Sea Customs Act which provides:-

" l 78A. (1) Where any g1;ods to which this section applies ar<> seized under thiR Act in the reasonable belief that they are smuggled goods, th.) burden of proving that they are not smuggled goods shall be on the person from whose possession the goods were seized.

(2) This section shall apply to gold, gold manufactures, diamonds and other precious ston~s, cigaretters and cosmetics and any other goods which th" Central Government may, by notification in the Official Gazette, sperify in this behalf.

(3) Every notification isgued under sub. section (2) shall he laid before both Houses of Parliament as soon as may be after it is iRBued".

Two Customs officers appeared a.s witnesses, Inspec-tor Satnam Singh and Deputy Superintendent A.N. Kapur, the former is an Inspector of Land Customs and the latter a Deputy Superintendent of Customs. There is nothing to indicate in their cross-examina-tion that the officern did not have a reasonable belief that the goodH werti smuggled goodR and tho question that the officers di1! not have reaimna.- hle belief is not suggested either from the cross-ll;amina.tion of these witnesses of from the findings of the courts below. Even in his statement of case 1962 it is contended that the mere existence of stamp of Kewal Krish1.1n foreign companies on gold does not necessarily •• prove that the gold is of foreign origin. It might S ta/.1 of Punjab be put on spurious gold which may be of Indian KapurJ. origin. In our opinion .apart from the fact that this question has not been raised, it is quite clear that what s. l 78A of the Sea Customs Act provides is that when the goods are seized in the reasonable belief that they are smuggled goods then the burden of proving that they are not smuggled goods is on the person from whose possession the goods are seized. The onus is on him to show that the goods are not smuggled; that is, not of foreign origin on which duty is not paid. The onus is not on the prosecution to Ehow that the goods are not of Indian origin. That appears to be the view taken in the Collector of OuBtoms, Madras v. Nathella Sampathu Ohetty (1) where at the learned Judges observed : - -

"We are therefore of opinion (1) that section l 78A was constitutionally valid, (2) that the rule as to the burden of proof enacted by that section applies to a contravention of a notification under section 8(1) of the Foreign Exchanges Regulation Act 1947 by virtue of its being deemed to be a contravention of a notification on under section l9 of the Sea Customs Act, ( 3) that the preliminary require-ment of section l 78A that the officer seizing should entertain "a reasonable belief that the goods seized were smuggled" was satisfied in the present case."

. I~ o~r opinion there is no merit in this appeal and it is d1sm1ssed. The appellant will surrender to his bail-bonds.

Appeal dismissed,.