Jai Nath Sah @ Jaiath Shaw V. Union of India

CR. MISC./27105/2009

AI Insights

The case involves Jai Nath Sah, who was accused of carrying gold bars of foreign origin concealed in his rectum, intended for conversion into ornaments. The Customs Department initiated both criminal and confiscation proceedings against him. Initially, the Joint Commissioner of Customs found the petitioner guilty and ordered the confiscation of the gold bars and imposed penalties. However, subsequent appeals and reviews by higher authorities and courts, including the Technical Member of the Tribunal and the High Court, revealed procedural lapses and lack of evidence regarding the foreign origin of the gold. The High Court's decision to quash the criminal proceedings was based on the failure of the Customs Department to substantiate its claims and adhere to legal procedures.

• Counselvise Citation: [2010] 140 COUNSELVISE.COM (IT) 803540 (HC-PATNA)
• Appeal Type: Others
• Pronouncement Date: 12-01-2010
• Assessment Year: misc
• Other Referred Cases: Pawan Kumar vs. State of Bihar, State of Haryana & Others vs. Bhajan Lal and others
• Laws Referred To: Customs Act, 1962, Foreign Trade (Development & Regulation) Act, 1992
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: ARCHANA SINHA
• Assessee Lawyers: BIRJU PRASAD
• Keywords: Confiscation proceeding; Criminal proceeding; Foreign origin; Gold bar; Quashing order
• Section: 11; 112; 3(i); 135; 111b; 103

Judgement Text

" IN THE HIGH COURT OF JUDICATURE AT PATNA Cr.Misc. No.27105 of 2009 JAI NATH SAH @ JAIATH SHAW, son of Sri Inderdeo Sah, village Inerwa, PS Adapur, district East Champaran - petitioner. Versus UNION OF INDIA ----------- For the petitioner : Mr. Birju Prasad, Advocate. For the Customs Dept. : Mrs. Archana Sinha, Advocate. 4 12.1.2010 Heard learned counsel for the parties. This application has been filed for quashing the order, dated 26.2.2002 passed by the Presiding Officer (Special Court), Economic Offences, Muzaffarpur in Custom Case No. 9/2001 by which cognizance has been taken under sections 11 and 135 of the Customs Act, 1962 read with section 3(i) of Foreign Trade (Development & Regulation) Act, 1992. Apart from the criminal proceeding, a confiscation proceeding was also instituted against the petitioner. The allegations in the F.I.R. is that the petitioner who was a carrier was caught with 495.800 grams of gold bar which was deliberately hidden in his rectum. It has been stated that he has confessed that he was carrying the gold bar on behalf of Sri Rajdeo Sah, resident of East Champaran district to Varanasi for conversion of the gold bar into ornaments. The further allegation is that the gold carried was of foreign origin and, therefore, charge sheet was submitted under section 135 of the Customs Act (hereinafter to be referred to as „the Act‟). In the confiscation proceeding the Joint Commissioner, Customs, Patna by order, dated 31.7.2003 found the petitioner guilty 2 of carrying the gold bar of foreign origin and ordered confiscation of 495.800 grams of gold bar under section 111B and imposed a penalty under section 112 of the Act on the petitioner and Rajdeo Sah. Against the aforesaid order the petitioner moved the Commissioner Appeals Customs & Central Excise, Patna. The order of the Joint Commissioner Customs was affirmed by order of the appellate court on 23.10.2004. The petitioner being aggrieved by order of the appellate court moved the Tribunal, East Zonal Bench, Calcutta. Vide order, dated 21.5.2007 the Technical Member held that there was no foreign marking on the gold bars and moreover the case of the department that the petitioner was carrying gold bar in his rectum is not supported by X-ray report and as such gave benefit of doubt to the petitioner and one Rajdeo Sah. The Customs Department thereafter filed Misc. Appeal No. 632/2007 which was disposed of by order, dated 10.4.2009. The Misc. appeal filed on behalf of the department was dismissed on the ground that the department had not followed the mandatory procedure prescribed under sub-sections (3) and (4) of section 103 of the Act. The High court has also observed that the case was one of false implication and dismissed the appeal and quashed the order of confiscation. The effect of the orders passed by various courts and the High court with respect to the confiscation proceeding leads to the following conclusion : (a) The Customs Department was not able to prove that the 3 gold bars were of foreign origin. (b) The Customs Department did not follow the procedure under section 103 of the act, which requires that where the Magistrate has reasonable ground to believe that a person who has goods secreted inside his body and the Magistrate is satisfied that for the purpose of discovering such goods it is necessary to have the body of such screened or X- rayed, he may make an order to that effect. It is apparent that the various courts have not found that the gold bars which were allegedly secreted from the rectum were of foreign origin and, therefore, it has been submitted on behalf of the petitioner that the criminal proceeding should be quashed as nothing remains after the aforesaid two findings of the courts in the confiscation proceeding. Learned counsel appearing on behalf of the Customs Department refers to a Full Bench judgment of this court in the case of Pawan Kumar vs. State of Bihar, 2009 (4) PLJR 703. The Full Bench resolved the dispute between two conflicting judgments delivered by benches of this court wherein one of the Hon‟ble Judges was of the view that the prosecution under section 7 of the E.C. Act would be quashed, once the confiscation proceeding has been dropped by virtue of the order of the appellate court. The single Judge has relied on a decision of the Supreme court in a matter relating to income tax reported in 1995 Supp. (2) SCC 724, whereas another bench of this court was of the opinion that since provisions of Income Tax Act and 4 section 7 of the E.C. Act were different, there was no bar with respect to continuation of criminal proceeding even though the confiscation proceeding had been dropped. The Full Bench held that the confiscation under section 6A of the E.C. Act is dependent upon various circumstances. It has been noticed that there is specific provision in the shape of section 6-C(2) of the E.C. Act that if in a case there is acquittal, the confiscation order would not be operative and the concerned person is either entitled to get back his property which is confiscated or I the same has been sold, the value thereof. In effect the Full Bench of this court held that the criminal proceeding should continue even though the confiscation proceeding has been dropped. There is no doubt about the fact that in the given circumstances, the criminal proceeding can continue even though the confiscation proceeding has been dropped or an order has been issued by the courts holding that the petitioner is not liable to be penalized in the confiscation proceeding. In my opinion, however, the findings in the proceeding for confiscation have to be considered along with the facts of a particular case. In this case there is an allegation that the goods were of foreign origin and further there is an allegation that the petitioner was carrying the goods in his rectum. The courts have come to a definite finding that the goods were not of foreign origin and that the provisions of section 103 of the Act have not been followed. The main issue, therefore, in the criminal proceeding would be that it has to be shown by the petitioner that the goods were not of foreign origin. The other part, that is, the procedure under 5 section 103 of the Act would be applicable only if there is a finding that the goods were of a foreign origin. In this case where the courts have come to a finding that the goods were not of a foreign origin, there is no question that the petitioner can be prosecuted under section 135 of the Act which reads as follows : “135. Evasion of duty or prohibition .- (1) Without prejudice to any action that may be taken under this Act, if any person,- (a) is in relation to any goods in any way knowingly concerned in any fraudulent evasion or attempt at evasion of any duty chargeable thereon or of any prohibition for the time being imposed under this Act or any other law for the time being in force with respect to such goods, or (b) acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under Sec. 111. he shall be punishable,- (i) in the case of an offence relating to any of the goods to which Sec. 123 applies and the market price whereof exceeds one lakh of rupees, with imprisonment for a term which may extend to seven years and with fine: Provided that in the absence of special and adequate 6 reasons to the contrary to be recorded in the judgment of the Court, such imprisonment shall not be for less than three years. (ii) In any other case, with imprisonment for a term which may extend to three years or with fine, or with both”. Once the finding is on record that the prosecution version has not been able to show that the petitioner was carrying goods of foreign origin the entire allegations would fall flat and the case would be covered by the principles laid down by the Supreme court in the case of State of Haryana & Others vs. Bhajan Lal and others, 1992 Supp. (1) SCC 335 wherein it has been held that if the allegation made out in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused, the criminal proceeding should be quashed. In the circumstances I find that it would serve no purpose in allowing the criminal proceeding to continue. In the result, this application is allowed and the order taking cognizance, dated 26.2.2002 is hereby quashed. haque (Sheema Ali Khan, J.) "