| SooperKanoon Citation | sooperkanoon.com/651373 |
| Subject | Customs |
| Court | Supreme Court of India |
| Decided On | Feb-06-1980 |
| Case Number | Criminal Appeal No. 47 of 1974 |
| Judge | A.D. Koshal and; S. Murtaza Fazal Ali, JJ. |
| Reported in | AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005 |
| Acts | Customs Act, 1962 - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114 |
| Appellant | Shah Guman Mal |
| Respondent | State of Andhra Pradesh |
| Appellant Advocate | R.S. Chitale and; Vineet Kumar, Advs |
| Respondent Advocate | M.A. Kheder and ; Venkarao, Advs. |
| Cases Referred | Balumal Jamnadas Batra v. State of Maharashtra |
| Prior history | Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972-- |
Notice (8): Undefined variable: kword [APP/View/Case/amp.ctp, line 120]Code Contextecho "<div class='table-bordered'><b>Excerpt:</b><br/>";if (trim($desc['Judgement']['casenote'])) {echo $this->Wand->highlight($this->Excerpt->extractRelevant($kword,strtolower(strip_tags($desc['Judgement']['casenote']))), $query);$viewFile = '/home/legalcrystal/app/View/Case/amp.ctp' $dataForView = array( 'title_for_layout' => 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ', 'desc' => array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p style="text-align: justify;">S. Murtaza Fazal Ali, J.</p><p style="text-align: justify;">1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p style="text-align: justify;">2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p style="text-align: justify;">3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p style="text-align: justify;">135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p style="text-align: justify;">(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 Section 111.</p><p style="text-align: justify;">4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p style="text-align: justify;">Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p style="text-align: justify;">These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p style="text-align: justify;">If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p style="text-align: justify;">5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p style="text-align: justify;">6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p style="text-align: justify;">In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p style="text-align: justify;">7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p style="text-align: justify;">8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p style="text-align: justify;">When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p style="text-align: justify;">It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p style="text-align: justify;">It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p style="text-align: justify;">Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p style="text-align: justify;">In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p style="text-align: justify;">It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p style="text-align: justify;">Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p style="text-align: justify;">Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p style="text-align: justify;">The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p style="text-align: justify;">The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p style="text-align: justify;">9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p style="text-align: justify;">10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p style="text-align: justify;">11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p style="text-align: justify;">12. For the reasons given above, the appeal fails and is accordingly dismissed.<p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ), 'casename_url' => 'shah-guman-mal-vs-state-andhra-pradesh', 'args' => array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) ) $title_for_layout = 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ' $desc = array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p>S. Murtaza Fazal Ali, J.</p><p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p>135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p>(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 Section 111.</p><p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p>Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p></p><p>', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ) $casename_url = 'shah-guman-mal-vs-state-andhra-pradesh' $args = array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) $url = 'https://sooperkanoon.com/case/amp/651373/shah-guman-mal-vs-state-andhra-pradesh' $ctype = '' $caseref = 'Balumal Jamnadas Batra v. 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Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 120]customs - smuggled goods - sections 111, 123, and 135 (1) of customs act, 1962, sections 8 and 85 of gold control act, 1968 and sections 106 and 114 of indian evidence act, 1872 - appellant was convicted and sentenced for offence under section 135 (1) (b) (ii) of act of 1962 and section 85 (ii) read with section 8 (1) of act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under sections 106 and 114 of act of 1882 - prosecution held to have clearly proved charge under section 135 (1) (b) (ii) of act of 1962. - [a.n. ray, c.j.,; h.r. khanna,; k.k. mathew,;.....Code Contextecho "<div class='table-bordered'><b>Excerpt:</b><br/>";if (trim($desc['Judgement']['casenote'])) {echo $this->Wand->highlight($this->Excerpt->extractRelevant($kword,strtolower(strip_tags($desc['Judgement']['casenote']))), $query);$viewFile = '/home/legalcrystal/app/View/Case/amp.ctp' $dataForView = array( 'title_for_layout' => 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ', 'desc' => array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p style="text-align: justify;">S. Murtaza Fazal Ali, J.</p><p style="text-align: justify;">1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p style="text-align: justify;">2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p style="text-align: justify;">3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p style="text-align: justify;">135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p style="text-align: justify;">(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 Section 111.</p><p style="text-align: justify;">4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p style="text-align: justify;">Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p style="text-align: justify;">These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p style="text-align: justify;">If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p style="text-align: justify;">5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p style="text-align: justify;">6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p style="text-align: justify;">In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p style="text-align: justify;">7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p style="text-align: justify;">8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p style="text-align: justify;">When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p style="text-align: justify;">It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p style="text-align: justify;">It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p style="text-align: justify;">Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p style="text-align: justify;">In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p style="text-align: justify;">It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p style="text-align: justify;">Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p style="text-align: justify;">Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p style="text-align: justify;">The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p style="text-align: justify;">The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p style="text-align: justify;">9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p style="text-align: justify;">10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p style="text-align: justify;">11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p style="text-align: justify;">12. For the reasons given above, the appeal fails and is accordingly dismissed.<p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ), 'casename_url' => 'shah-guman-mal-vs-state-andhra-pradesh', 'args' => array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) ) $title_for_layout = 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ' $desc = array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p>S. Murtaza Fazal Ali, J.</p><p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p>135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p>(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 Section 111.</p><p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p>Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p></p><p>', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ) $casename_url = 'shah-guman-mal-vs-state-andhra-pradesh' $args = array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) $url = 'https://sooperkanoon.com/case/amp/651373/shah-guman-mal-vs-state-andhra-pradesh' $ctype = '' $caseref = 'Balumal Jamnadas Batra v. 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Notice (8): Undefined variable: kword [APP/View/Case/amp.ctp, line 123]Code Context}//highest occurence of word in the judgementecho $this->Wand->highlight($this->Excerpt->extractRelevant($kword,strtolower(strip_tags($desc['Judgement']['judgement']))), $query) . "</div>";$viewFile = '/home/legalcrystal/app/View/Case/amp.ctp' $dataForView = array( 'title_for_layout' => 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ', 'desc' => array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p style="text-align: justify;">S. Murtaza Fazal Ali, J.</p><p style="text-align: justify;">1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p style="text-align: justify;">2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p style="text-align: justify;">3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p style="text-align: justify;">135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p style="text-align: justify;">(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 Section 111.</p><p style="text-align: justify;">4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p style="text-align: justify;">Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p style="text-align: justify;">These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p style="text-align: justify;">If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p style="text-align: justify;">5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p style="text-align: justify;">6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p style="text-align: justify;">In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p style="text-align: justify;">7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p style="text-align: justify;">8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p style="text-align: justify;">When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p style="text-align: justify;">It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p style="text-align: justify;">It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p style="text-align: justify;">Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p style="text-align: justify;">In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p style="text-align: justify;">It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p style="text-align: justify;">Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p style="text-align: justify;">Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p style="text-align: justify;">The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p style="text-align: justify;">The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p style="text-align: justify;">9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p style="text-align: justify;">10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p style="text-align: justify;">11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p style="text-align: justify;">12. For the reasons given above, the appeal fails and is accordingly dismissed.<p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ), 'casename_url' => 'shah-guman-mal-vs-state-andhra-pradesh', 'args' => array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) ) $title_for_layout = 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ' $desc = array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p>S. Murtaza Fazal Ali, J.</p><p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p>135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p>(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 Section 111.</p><p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p>Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p></p><p>', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ) $casename_url = 'shah-guman-mal-vs-state-andhra-pradesh' $args = array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) $url = 'https://sooperkanoon.com/case/amp/651373/shah-guman-mal-vs-state-andhra-pradesh' $ctype = '' $caseref = 'Balumal Jamnadas Batra v. 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Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 123]s. murtaza fazal ali, j.1. this appeal by special leave is directed against a judgment dated august 18, 1973 of the andhra pradesh high court. the facts of the case have been detailed in the judgment of the high court and it is not necessary to repeat them all over again. the appellant was tried by the magistrate for offences under section 135(1)(b)(ii) of the customs act, 1962 and section (ii) read with section 8(i) of the gold control act, and sentenced to rigorous imprisonment for nine months under each count. both the sentences were directed to run concurrently. sentences of fine were also imposed. the sessions judge, on appeal, set aside the conviction and sentence under the gold control act and acquitted the appellant of that charge for the reason that the requisite sanction for his.....Code Context}//highest occurence of word in the judgementecho $this->Wand->highlight($this->Excerpt->extractRelevant($kword,strtolower(strip_tags($desc['Judgement']['judgement']))), $query) . "</div>";$viewFile = '/home/legalcrystal/app/View/Case/amp.ctp' $dataForView = array( 'title_for_layout' => 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ', 'desc' => array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p style="text-align: justify;">S. Murtaza Fazal Ali, J.</p><p style="text-align: justify;">1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p style="text-align: justify;">2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p style="text-align: justify;">3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p style="text-align: justify;">135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p style="text-align: justify;">(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 Section 111.</p><p style="text-align: justify;">4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p style="text-align: justify;">Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p style="text-align: justify;">These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p style="text-align: justify;">If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p style="text-align: justify;">5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p style="text-align: justify;">6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p style="text-align: justify;">In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p style="text-align: justify;">7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p style="text-align: justify;">8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p style="text-align: justify;">When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p style="text-align: justify;">It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p style="text-align: justify;">It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p style="text-align: justify;">Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p style="text-align: justify;">In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p style="text-align: justify;">It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p style="text-align: justify;">Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p style="text-align: justify;">Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p style="text-align: justify;">The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p style="text-align: justify;">The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p style="text-align: justify;">9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p style="text-align: justify;">10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p style="text-align: justify;">11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p style="text-align: justify;">12. For the reasons given above, the appeal fails and is accordingly dismissed.<p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ), 'casename_url' => 'shah-guman-mal-vs-state-andhra-pradesh', 'args' => array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) ) $title_for_layout = 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ' $desc = array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p>S. Murtaza Fazal Ali, J.</p><p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p>135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p>(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 Section 111.</p><p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p>Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p></p><p>', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ) $casename_url = 'shah-guman-mal-vs-state-andhra-pradesh' $args = array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) $url = 'https://sooperkanoon.com/case/amp/651373/shah-guman-mal-vs-state-andhra-pradesh' $ctype = '' $caseref = 'Balumal Jamnadas Batra v. 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Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]Code Contextecho $this->Adsense->display('responsive_rect');}echo html_entity_decode($this->Wand->highlight($content[$i], $query));$viewFile = '/home/legalcrystal/app/View/Case/amp.ctp' $dataForView = array( 'title_for_layout' => 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ', 'desc' => array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p style="text-align: justify;">S. Murtaza Fazal Ali, J.</p><p style="text-align: justify;">1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p style="text-align: justify;">2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p style="text-align: justify;">3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p style="text-align: justify;">135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p style="text-align: justify;">(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 Section 111.</p><p style="text-align: justify;">4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p style="text-align: justify;">Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p style="text-align: justify;">These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p style="text-align: justify;">If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p style="text-align: justify;">5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p style="text-align: justify;">6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p style="text-align: justify;">In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p style="text-align: justify;">7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p style="text-align: justify;">8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p style="text-align: justify;">When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p style="text-align: justify;">It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p style="text-align: justify;">It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p style="text-align: justify;">Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p style="text-align: justify;">In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p style="text-align: justify;">It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p style="text-align: justify;">Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p style="text-align: justify;">Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p style="text-align: justify;">The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p style="text-align: justify;">The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p style="text-align: justify;">9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p style="text-align: justify;">10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p style="text-align: justify;">11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p style="text-align: justify;">12. For the reasons given above, the appeal fails and is accordingly dismissed.<p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ), 'casename_url' => 'shah-guman-mal-vs-state-andhra-pradesh', 'args' => array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) ) $title_for_layout = 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ' $desc = array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p>S. Murtaza Fazal Ali, J.</p><p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p>135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p>(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 Section 111.</p><p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p>Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p></p><p>', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ) $casename_url = 'shah-guman-mal-vs-state-andhra-pradesh' $args = array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) $url = 'https://sooperkanoon.com/case/amp/651373/shah-guman-mal-vs-state-andhra-pradesh' $ctype = '' $caseref = 'Balumal Jamnadas Batra v. State of Maharashtra<br>' $content = array( (int) 0 => '<p>S. Murtaza Fazal Ali, J.', (int) 1 => '<p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.', (int) 2 => '<p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.', (int) 3 => '<p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:', (int) 4 => '<p>135(1) Without prejudice to any action that may be taken under this Act, if any person-', (int) 5 => '<p>(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 Section 111.', (int) 6 => '<p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:', (int) 7 => '<p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. ', (int) 8 => '<p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:', (int) 9 => '<p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. ', (int) 10 => '<p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.', (int) 11 => '<p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:', (int) 12 => '<p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). ', (int) 13 => '<p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.', (int) 14 => '<p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:', (int) 15 => '<p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. ', (int) 16 => '<p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:', (int) 17 => '<p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. ', (int) 18 => '<p>Similarly, while dealing with the merits of the case, this Court made the following observations:', (int) 19 => '<p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.', (int) 20 => '<p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:', (int) 21 => '<p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.', (int) 22 => '<p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.', (int) 23 => '<p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:', (int) 24 => '<p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. ', (int) 25 => '<p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.', (int) 26 => '<p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', (int) 27 => '<p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.', (int) 28 => '<p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p>', (int) 29 => '<p>' ) $paragraphAfter = (int) 1 $cnt = (int) 30 $i = (int) 0include - APP/View/Case/amp.ctp, line 144 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 963 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 109
S. Murtaza Fazal Ali, J.
Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]Code Contextecho $this->Adsense->display('responsive_rect');}echo html_entity_decode($this->Wand->highlight($content[$i], $query));$viewFile = '/home/legalcrystal/app/View/Case/amp.ctp' $dataForView = array( 'title_for_layout' => 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ', 'desc' => array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p style="text-align: justify;">S. Murtaza Fazal Ali, J.</p><p style="text-align: justify;">1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p style="text-align: justify;">2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p style="text-align: justify;">3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p style="text-align: justify;">135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p style="text-align: justify;">(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 Section 111.</p><p style="text-align: justify;">4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p style="text-align: justify;">Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p style="text-align: justify;">These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p style="text-align: justify;">If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p style="text-align: justify;">5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p style="text-align: justify;">6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p style="text-align: justify;">In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p style="text-align: justify;">7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p style="text-align: justify;">8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p style="text-align: justify;">When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p style="text-align: justify;">It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p style="text-align: justify;">It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p style="text-align: justify;">Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p style="text-align: justify;">In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p style="text-align: justify;">It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p style="text-align: justify;">Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p style="text-align: justify;">Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p style="text-align: justify;">The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p style="text-align: justify;">The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p style="text-align: justify;">9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p style="text-align: justify;">10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p style="text-align: justify;">11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p style="text-align: justify;">12. For the reasons given above, the appeal fails and is accordingly dismissed.<p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ), 'casename_url' => 'shah-guman-mal-vs-state-andhra-pradesh', 'args' => array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) ) $title_for_layout = 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ' $desc = array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p>S. Murtaza Fazal Ali, J.</p><p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p>135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p>(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 Section 111.</p><p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p>Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p></p><p>', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ) $casename_url = 'shah-guman-mal-vs-state-andhra-pradesh' $args = array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) $url = 'https://sooperkanoon.com/case/amp/651373/shah-guman-mal-vs-state-andhra-pradesh' $ctype = '' $caseref = 'Balumal Jamnadas Batra v. State of Maharashtra<br>' $content = array( (int) 0 => '<p>S. Murtaza Fazal Ali, J.', (int) 1 => '<p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.', (int) 2 => '<p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.', (int) 3 => '<p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:', (int) 4 => '<p>135(1) Without prejudice to any action that may be taken under this Act, if any person-', (int) 5 => '<p>(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 Section 111.', (int) 6 => '<p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:', (int) 7 => '<p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. ', (int) 8 => '<p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:', (int) 9 => '<p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. ', (int) 10 => '<p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.', (int) 11 => '<p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:', (int) 12 => '<p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). ', (int) 13 => '<p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.', (int) 14 => '<p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:', (int) 15 => '<p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. ', (int) 16 => '<p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:', (int) 17 => '<p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. ', (int) 18 => '<p>Similarly, while dealing with the merits of the case, this Court made the following observations:', (int) 19 => '<p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.', (int) 20 => '<p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:', (int) 21 => '<p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.', (int) 22 => '<p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.', (int) 23 => '<p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:', (int) 24 => '<p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. ', (int) 25 => '<p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.', (int) 26 => '<p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', (int) 27 => '<p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.', (int) 28 => '<p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p>', (int) 29 => '<p>' ) $paragraphAfter = (int) 1 $cnt = (int) 30 $i = (int) 1include - APP/View/Case/amp.ctp, line 144 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 963 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 109
1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the Customs Act, 1962 and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.
Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]Code Contextecho $this->Adsense->display('responsive_rect');}echo html_entity_decode($this->Wand->highlight($content[$i], $query));$viewFile = '/home/legalcrystal/app/View/Case/amp.ctp' $dataForView = array( 'title_for_layout' => 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ', 'desc' => array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p style="text-align: justify;">S. Murtaza Fazal Ali, J.</p><p style="text-align: justify;">1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p style="text-align: justify;">2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p style="text-align: justify;">3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p style="text-align: justify;">135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p style="text-align: justify;">(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 Section 111.</p><p style="text-align: justify;">4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p style="text-align: justify;">Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p style="text-align: justify;">These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p style="text-align: justify;">If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p style="text-align: justify;">5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p style="text-align: justify;">6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p style="text-align: justify;">In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p style="text-align: justify;">7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p style="text-align: justify;">8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p style="text-align: justify;">When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p style="text-align: justify;">It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p style="text-align: justify;">It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p style="text-align: justify;">Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p style="text-align: justify;">In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p style="text-align: justify;">It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p style="text-align: justify;">Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p style="text-align: justify;">Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p style="text-align: justify;">The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p style="text-align: justify;">The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p style="text-align: justify;">9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p style="text-align: justify;">10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p style="text-align: justify;">11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p style="text-align: justify;">12. For the reasons given above, the appeal fails and is accordingly dismissed.<p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ), 'casename_url' => 'shah-guman-mal-vs-state-andhra-pradesh', 'args' => array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) ) $title_for_layout = 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ' $desc = array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p>S. Murtaza Fazal Ali, J.</p><p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p>135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p>(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 Section 111.</p><p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p>Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p></p><p>', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ) $casename_url = 'shah-guman-mal-vs-state-andhra-pradesh' $args = array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) $url = 'https://sooperkanoon.com/case/amp/651373/shah-guman-mal-vs-state-andhra-pradesh' $ctype = '' $caseref = 'Balumal Jamnadas Batra v. State of Maharashtra<br>' $content = array( (int) 0 => '<p>S. Murtaza Fazal Ali, J.', (int) 1 => '<p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.', (int) 2 => '<p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.', (int) 3 => '<p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:', (int) 4 => '<p>135(1) Without prejudice to any action that may be taken under this Act, if any person-', (int) 5 => '<p>(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 Section 111.', (int) 6 => '<p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:', (int) 7 => '<p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. ', (int) 8 => '<p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:', (int) 9 => '<p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. ', (int) 10 => '<p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.', (int) 11 => '<p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:', (int) 12 => '<p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). ', (int) 13 => '<p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.', (int) 14 => '<p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:', (int) 15 => '<p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. ', (int) 16 => '<p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:', (int) 17 => '<p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. ', (int) 18 => '<p>Similarly, while dealing with the merits of the case, this Court made the following observations:', (int) 19 => '<p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.', (int) 20 => '<p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:', (int) 21 => '<p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.', (int) 22 => '<p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.', (int) 23 => '<p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:', (int) 24 => '<p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. ', (int) 25 => '<p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.', (int) 26 => '<p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', (int) 27 => '<p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.', (int) 28 => '<p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p>', (int) 29 => '<p>' ) $paragraphAfter = (int) 1 $cnt = (int) 30 $i = (int) 2include - APP/View/Case/amp.ctp, line 144 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 963 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 109
2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.
Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]Code Contextecho $this->Adsense->display('responsive_rect');}echo html_entity_decode($this->Wand->highlight($content[$i], $query));$viewFile = '/home/legalcrystal/app/View/Case/amp.ctp' $dataForView = array( 'title_for_layout' => 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ', 'desc' => array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p style="text-align: justify;">S. Murtaza Fazal Ali, J.</p><p style="text-align: justify;">1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p style="text-align: justify;">2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p style="text-align: justify;">3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p style="text-align: justify;">135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p style="text-align: justify;">(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 Section 111.</p><p style="text-align: justify;">4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p style="text-align: justify;">Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p style="text-align: justify;">These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p style="text-align: justify;">If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p style="text-align: justify;">5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p style="text-align: justify;">6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p style="text-align: justify;">In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p style="text-align: justify;">7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p style="text-align: justify;">8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p style="text-align: justify;">When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p style="text-align: justify;">It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p style="text-align: justify;">It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p style="text-align: justify;">Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p style="text-align: justify;">In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p style="text-align: justify;">It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p style="text-align: justify;">Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p style="text-align: justify;">Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p style="text-align: justify;">The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p style="text-align: justify;">The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p style="text-align: justify;">9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p style="text-align: justify;">10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p style="text-align: justify;">11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p style="text-align: justify;">12. For the reasons given above, the appeal fails and is accordingly dismissed.<p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ), 'casename_url' => 'shah-guman-mal-vs-state-andhra-pradesh', 'args' => array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) ) $title_for_layout = 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ' $desc = array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p>S. Murtaza Fazal Ali, J.</p><p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p>135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p>(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 Section 111.</p><p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p>Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p></p><p>', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ) $casename_url = 'shah-guman-mal-vs-state-andhra-pradesh' $args = array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) $url = 'https://sooperkanoon.com/case/amp/651373/shah-guman-mal-vs-state-andhra-pradesh' $ctype = '' $caseref = 'Balumal Jamnadas Batra v. State of Maharashtra<br>' $content = array( (int) 0 => '<p>S. Murtaza Fazal Ali, J.', (int) 1 => '<p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.', (int) 2 => '<p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.', (int) 3 => '<p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:', (int) 4 => '<p>135(1) Without prejudice to any action that may be taken under this Act, if any person-', (int) 5 => '<p>(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 Section 111.', (int) 6 => '<p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:', (int) 7 => '<p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. ', (int) 8 => '<p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:', (int) 9 => '<p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. ', (int) 10 => '<p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.', (int) 11 => '<p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:', (int) 12 => '<p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). ', (int) 13 => '<p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.', (int) 14 => '<p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:', (int) 15 => '<p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. ', (int) 16 => '<p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:', (int) 17 => '<p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. ', (int) 18 => '<p>Similarly, while dealing with the merits of the case, this Court made the following observations:', (int) 19 => '<p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.', (int) 20 => '<p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:', (int) 21 => '<p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.', (int) 22 => '<p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.', (int) 23 => '<p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:', (int) 24 => '<p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. ', (int) 25 => '<p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.', (int) 26 => '<p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', (int) 27 => '<p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.', (int) 28 => '<p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p>', (int) 29 => '<p>' ) $paragraphAfter = (int) 1 $cnt = (int) 30 $i = (int) 3include - APP/View/Case/amp.ctp, line 144 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 963 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 109
3. Section 135(1)(b), under which the appellant has been convicted, runs thus:
Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]Code Contextecho $this->Adsense->display('responsive_rect');}echo html_entity_decode($this->Wand->highlight($content[$i], $query));$viewFile = '/home/legalcrystal/app/View/Case/amp.ctp' $dataForView = array( 'title_for_layout' => 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ', 'desc' => array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p style="text-align: justify;">S. Murtaza Fazal Ali, J.</p><p style="text-align: justify;">1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p style="text-align: justify;">2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p style="text-align: justify;">3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p style="text-align: justify;">135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p style="text-align: justify;">(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 Section 111.</p><p style="text-align: justify;">4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p style="text-align: justify;">Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p style="text-align: justify;">These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p style="text-align: justify;">If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p style="text-align: justify;">5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p style="text-align: justify;">6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p style="text-align: justify;">In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p style="text-align: justify;">7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p style="text-align: justify;">8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p style="text-align: justify;">When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p style="text-align: justify;">It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p style="text-align: justify;">It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p style="text-align: justify;">Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p style="text-align: justify;">In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p style="text-align: justify;">It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p style="text-align: justify;">Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p style="text-align: justify;">Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p style="text-align: justify;">The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p style="text-align: justify;">The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p style="text-align: justify;">9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p style="text-align: justify;">10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p style="text-align: justify;">11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p style="text-align: justify;">12. For the reasons given above, the appeal fails and is accordingly dismissed.<p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ), 'casename_url' => 'shah-guman-mal-vs-state-andhra-pradesh', 'args' => array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) ) $title_for_layout = 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ' $desc = array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p>S. Murtaza Fazal Ali, J.</p><p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p>135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p>(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 Section 111.</p><p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p>Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p></p><p>', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ) $casename_url = 'shah-guman-mal-vs-state-andhra-pradesh' $args = array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) $url = 'https://sooperkanoon.com/case/amp/651373/shah-guman-mal-vs-state-andhra-pradesh' $ctype = '' $caseref = 'Balumal Jamnadas Batra v. State of Maharashtra<br>' $content = array( (int) 0 => '<p>S. Murtaza Fazal Ali, J.', (int) 1 => '<p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.', (int) 2 => '<p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.', (int) 3 => '<p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:', (int) 4 => '<p>135(1) Without prejudice to any action that may be taken under this Act, if any person-', (int) 5 => '<p>(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 Section 111.', (int) 6 => '<p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:', (int) 7 => '<p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. ', (int) 8 => '<p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:', (int) 9 => '<p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. ', (int) 10 => '<p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.', (int) 11 => '<p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:', (int) 12 => '<p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). ', (int) 13 => '<p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.', (int) 14 => '<p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:', (int) 15 => '<p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. ', (int) 16 => '<p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:', (int) 17 => '<p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. ', (int) 18 => '<p>Similarly, while dealing with the merits of the case, this Court made the following observations:', (int) 19 => '<p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.', (int) 20 => '<p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:', (int) 21 => '<p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.', (int) 22 => '<p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.', (int) 23 => '<p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:', (int) 24 => '<p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. ', (int) 25 => '<p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.', (int) 26 => '<p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', (int) 27 => '<p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.', (int) 28 => '<p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p>', (int) 29 => '<p>' ) $paragraphAfter = (int) 1 $cnt = (int) 30 $i = (int) 4include - APP/View/Case/amp.ctp, line 144 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 963 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 109
135(1) Without prejudice to any action that may be taken under this Act, if any person-
Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]Code Contextecho $this->Adsense->display('responsive_rect');}echo html_entity_decode($this->Wand->highlight($content[$i], $query));$viewFile = '/home/legalcrystal/app/View/Case/amp.ctp' $dataForView = array( 'title_for_layout' => 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ', 'desc' => array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p style="text-align: justify;">S. Murtaza Fazal Ali, J.</p><p style="text-align: justify;">1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p style="text-align: justify;">2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p style="text-align: justify;">3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p style="text-align: justify;">135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p style="text-align: justify;">(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 Section 111.</p><p style="text-align: justify;">4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p style="text-align: justify;">Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p style="text-align: justify;">These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p style="text-align: justify;">If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p style="text-align: justify;">5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p style="text-align: justify;">6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p style="text-align: justify;">In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p style="text-align: justify;">7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p style="text-align: justify;">8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p style="text-align: justify;">When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p style="text-align: justify;">It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p style="text-align: justify;">It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p style="text-align: justify;">Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p style="text-align: justify;">In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p style="text-align: justify;">It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p style="text-align: justify;">Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p style="text-align: justify;">Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p style="text-align: justify;">The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p style="text-align: justify;">The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p style="text-align: justify;">9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p style="text-align: justify;">10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p style="text-align: justify;">11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p style="text-align: justify;">12. For the reasons given above, the appeal fails and is accordingly dismissed.<p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ), 'casename_url' => 'shah-guman-mal-vs-state-andhra-pradesh', 'args' => array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) ) $title_for_layout = 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ' $desc = array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p>S. Murtaza Fazal Ali, J.</p><p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p>135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p>(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 Section 111.</p><p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p>Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p></p><p>', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ) $casename_url = 'shah-guman-mal-vs-state-andhra-pradesh' $args = array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) $url = 'https://sooperkanoon.com/case/amp/651373/shah-guman-mal-vs-state-andhra-pradesh' $ctype = '' $caseref = 'Balumal Jamnadas Batra v. State of Maharashtra<br>' $content = array( (int) 0 => '<p>S. Murtaza Fazal Ali, J.', (int) 1 => '<p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.', (int) 2 => '<p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.', (int) 3 => '<p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:', (int) 4 => '<p>135(1) Without prejudice to any action that may be taken under this Act, if any person-', (int) 5 => '<p>(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 Section 111.', (int) 6 => '<p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:', (int) 7 => '<p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. ', (int) 8 => '<p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:', (int) 9 => '<p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. ', (int) 10 => '<p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.', (int) 11 => '<p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:', (int) 12 => '<p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). ', (int) 13 => '<p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.', (int) 14 => '<p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:', (int) 15 => '<p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. ', (int) 16 => '<p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:', (int) 17 => '<p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. ', (int) 18 => '<p>Similarly, while dealing with the merits of the case, this Court made the following observations:', (int) 19 => '<p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.', (int) 20 => '<p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:', (int) 21 => '<p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.', (int) 22 => '<p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.', (int) 23 => '<p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:', (int) 24 => '<p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. ', (int) 25 => '<p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.', (int) 26 => '<p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', (int) 27 => '<p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.', (int) 28 => '<p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p>', (int) 29 => '<p>' ) $paragraphAfter = (int) 1 $cnt = (int) 30 $i = (int) 5include - APP/View/Case/amp.ctp, line 144 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 963 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 109
(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 Section 111.
Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]Code Contextecho $this->Adsense->display('responsive_rect');}echo html_entity_decode($this->Wand->highlight($content[$i], $query));$viewFile = '/home/legalcrystal/app/View/Case/amp.ctp' $dataForView = array( 'title_for_layout' => 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ', 'desc' => array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p style="text-align: justify;">S. Murtaza Fazal Ali, J.</p><p style="text-align: justify;">1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p style="text-align: justify;">2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p style="text-align: justify;">3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p style="text-align: justify;">135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p style="text-align: justify;">(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 Section 111.</p><p style="text-align: justify;">4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p style="text-align: justify;">Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p style="text-align: justify;">These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p style="text-align: justify;">If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p style="text-align: justify;">5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p style="text-align: justify;">6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p style="text-align: justify;">In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p style="text-align: justify;">7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p style="text-align: justify;">8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p style="text-align: justify;">When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p style="text-align: justify;">It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p style="text-align: justify;">It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p style="text-align: justify;">Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p style="text-align: justify;">In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p style="text-align: justify;">It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p style="text-align: justify;">Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p style="text-align: justify;">Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p style="text-align: justify;">The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p style="text-align: justify;">The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p style="text-align: justify;">9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p style="text-align: justify;">10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p style="text-align: justify;">11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p style="text-align: justify;">12. For the reasons given above, the appeal fails and is accordingly dismissed.<p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ), 'casename_url' => 'shah-guman-mal-vs-state-andhra-pradesh', 'args' => array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) ) $title_for_layout = 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ' $desc = array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p>S. Murtaza Fazal Ali, J.</p><p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p>135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p>(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 Section 111.</p><p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p>Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p></p><p>', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ) $casename_url = 'shah-guman-mal-vs-state-andhra-pradesh' $args = array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) $url = 'https://sooperkanoon.com/case/amp/651373/shah-guman-mal-vs-state-andhra-pradesh' $ctype = '' $caseref = 'Balumal Jamnadas Batra v. State of Maharashtra<br>' $content = array( (int) 0 => '<p>S. Murtaza Fazal Ali, J.', (int) 1 => '<p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.', (int) 2 => '<p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.', (int) 3 => '<p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:', (int) 4 => '<p>135(1) Without prejudice to any action that may be taken under this Act, if any person-', (int) 5 => '<p>(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 Section 111.', (int) 6 => '<p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:', (int) 7 => '<p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. ', (int) 8 => '<p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:', (int) 9 => '<p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. ', (int) 10 => '<p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.', (int) 11 => '<p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:', (int) 12 => '<p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). ', (int) 13 => '<p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.', (int) 14 => '<p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:', (int) 15 => '<p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. ', (int) 16 => '<p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:', (int) 17 => '<p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. ', (int) 18 => '<p>Similarly, while dealing with the merits of the case, this Court made the following observations:', (int) 19 => '<p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.', (int) 20 => '<p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:', (int) 21 => '<p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.', (int) 22 => '<p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.', (int) 23 => '<p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:', (int) 24 => '<p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. ', (int) 25 => '<p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.', (int) 26 => '<p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', (int) 27 => '<p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.', (int) 28 => '<p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p>', (int) 29 => '<p>' ) $paragraphAfter = (int) 1 $cnt = (int) 30 $i = (int) 6include - APP/View/Case/amp.ctp, line 144 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 963 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 109
4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:
Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]Code Contextecho $this->Adsense->display('responsive_rect');}echo html_entity_decode($this->Wand->highlight($content[$i], $query));$viewFile = '/home/legalcrystal/app/View/Case/amp.ctp' $dataForView = array( 'title_for_layout' => 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ', 'desc' => array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p style="text-align: justify;">S. Murtaza Fazal Ali, J.</p><p style="text-align: justify;">1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p style="text-align: justify;">2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p style="text-align: justify;">3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p style="text-align: justify;">135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p style="text-align: justify;">(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 Section 111.</p><p style="text-align: justify;">4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p style="text-align: justify;">Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p style="text-align: justify;">These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p style="text-align: justify;">If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p style="text-align: justify;">5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p style="text-align: justify;">6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p style="text-align: justify;">In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p style="text-align: justify;">7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p style="text-align: justify;">8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p style="text-align: justify;">When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p style="text-align: justify;">It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p style="text-align: justify;">It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p style="text-align: justify;">Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p style="text-align: justify;">In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p style="text-align: justify;">It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p style="text-align: justify;">Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p style="text-align: justify;">Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p style="text-align: justify;">The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p style="text-align: justify;">The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p style="text-align: justify;">9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p style="text-align: justify;">10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p style="text-align: justify;">11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p style="text-align: justify;">12. For the reasons given above, the appeal fails and is accordingly dismissed.<p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ), 'casename_url' => 'shah-guman-mal-vs-state-andhra-pradesh', 'args' => array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) ) $title_for_layout = 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ' $desc = array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p>S. Murtaza Fazal Ali, J.</p><p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p>135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p>(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 Section 111.</p><p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p>Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p></p><p>', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ) $casename_url = 'shah-guman-mal-vs-state-andhra-pradesh' $args = array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) $url = 'https://sooperkanoon.com/case/amp/651373/shah-guman-mal-vs-state-andhra-pradesh' $ctype = '' $caseref = 'Balumal Jamnadas Batra v. State of Maharashtra<br>' $content = array( (int) 0 => '<p>S. Murtaza Fazal Ali, J.', (int) 1 => '<p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.', (int) 2 => '<p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.', (int) 3 => '<p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:', (int) 4 => '<p>135(1) Without prejudice to any action that may be taken under this Act, if any person-', (int) 5 => '<p>(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 Section 111.', (int) 6 => '<p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:', (int) 7 => '<p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. ', (int) 8 => '<p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:', (int) 9 => '<p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. ', (int) 10 => '<p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.', (int) 11 => '<p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:', (int) 12 => '<p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). ', (int) 13 => '<p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.', (int) 14 => '<p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:', (int) 15 => '<p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. ', (int) 16 => '<p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:', (int) 17 => '<p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. ', (int) 18 => '<p>Similarly, while dealing with the merits of the case, this Court made the following observations:', (int) 19 => '<p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.', (int) 20 => '<p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:', (int) 21 => '<p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.', (int) 22 => '<p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.', (int) 23 => '<p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:', (int) 24 => '<p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. ', (int) 25 => '<p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.', (int) 26 => '<p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', (int) 27 => '<p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.', (int) 28 => '<p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p>', (int) 29 => '<p>' ) $paragraphAfter = (int) 1 $cnt = (int) 30 $i = (int) 7include - APP/View/Case/amp.ctp, line 144 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 963 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 109
Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act.
Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]Code Contextecho $this->Adsense->display('responsive_rect');}echo html_entity_decode($this->Wand->highlight($content[$i], $query));$viewFile = '/home/legalcrystal/app/View/Case/amp.ctp' $dataForView = array( 'title_for_layout' => 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ', 'desc' => array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p style="text-align: justify;">S. Murtaza Fazal Ali, J.</p><p style="text-align: justify;">1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p style="text-align: justify;">2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p style="text-align: justify;">3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p style="text-align: justify;">135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p style="text-align: justify;">(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 Section 111.</p><p style="text-align: justify;">4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p style="text-align: justify;">Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p style="text-align: justify;">These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p style="text-align: justify;">If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p style="text-align: justify;">5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p style="text-align: justify;">6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p style="text-align: justify;">In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p style="text-align: justify;">7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p style="text-align: justify;">8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p style="text-align: justify;">When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p style="text-align: justify;">It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p style="text-align: justify;">It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p style="text-align: justify;">Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p style="text-align: justify;">In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p style="text-align: justify;">It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p style="text-align: justify;">Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p style="text-align: justify;">Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p style="text-align: justify;">The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p style="text-align: justify;">The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p style="text-align: justify;">9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p style="text-align: justify;">10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p style="text-align: justify;">11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p style="text-align: justify;">12. For the reasons given above, the appeal fails and is accordingly dismissed.<p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ), 'casename_url' => 'shah-guman-mal-vs-state-andhra-pradesh', 'args' => array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) ) $title_for_layout = 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ' $desc = array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p>S. Murtaza Fazal Ali, J.</p><p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p>135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p>(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 Section 111.</p><p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p>Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p></p><p>', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ) $casename_url = 'shah-guman-mal-vs-state-andhra-pradesh' $args = array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) $url = 'https://sooperkanoon.com/case/amp/651373/shah-guman-mal-vs-state-andhra-pradesh' $ctype = '' $caseref = 'Balumal Jamnadas Batra v. State of Maharashtra<br>' $content = array( (int) 0 => '<p>S. Murtaza Fazal Ali, J.', (int) 1 => '<p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.', (int) 2 => '<p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.', (int) 3 => '<p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:', (int) 4 => '<p>135(1) Without prejudice to any action that may be taken under this Act, if any person-', (int) 5 => '<p>(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 Section 111.', (int) 6 => '<p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:', (int) 7 => '<p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. ', (int) 8 => '<p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:', (int) 9 => '<p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. ', (int) 10 => '<p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.', (int) 11 => '<p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:', (int) 12 => '<p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). ', (int) 13 => '<p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.', (int) 14 => '<p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:', (int) 15 => '<p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. ', (int) 16 => '<p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:', (int) 17 => '<p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. ', (int) 18 => '<p>Similarly, while dealing with the merits of the case, this Court made the following observations:', (int) 19 => '<p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.', (int) 20 => '<p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:', (int) 21 => '<p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.', (int) 22 => '<p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.', (int) 23 => '<p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:', (int) 24 => '<p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. ', (int) 25 => '<p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.', (int) 26 => '<p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', (int) 27 => '<p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.', (int) 28 => '<p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p>', (int) 29 => '<p>' ) $paragraphAfter = (int) 1 $cnt = (int) 30 $i = (int) 8include - APP/View/Case/amp.ctp, line 144 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 963 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 109
These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:
Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]Code Contextecho $this->Adsense->display('responsive_rect');}echo html_entity_decode($this->Wand->highlight($content[$i], $query));$viewFile = '/home/legalcrystal/app/View/Case/amp.ctp' $dataForView = array( 'title_for_layout' => 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ', 'desc' => array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p style="text-align: justify;">S. Murtaza Fazal Ali, J.</p><p style="text-align: justify;">1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p style="text-align: justify;">2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p style="text-align: justify;">3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p style="text-align: justify;">135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p style="text-align: justify;">(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 Section 111.</p><p style="text-align: justify;">4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p style="text-align: justify;">Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p style="text-align: justify;">These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p style="text-align: justify;">If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p style="text-align: justify;">5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p style="text-align: justify;">6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p style="text-align: justify;">In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p style="text-align: justify;">7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p style="text-align: justify;">8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p style="text-align: justify;">When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p style="text-align: justify;">It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p style="text-align: justify;">It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p style="text-align: justify;">Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p style="text-align: justify;">In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p style="text-align: justify;">It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p style="text-align: justify;">Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p style="text-align: justify;">Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p style="text-align: justify;">The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p style="text-align: justify;">The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p style="text-align: justify;">9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p style="text-align: justify;">10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p style="text-align: justify;">11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p style="text-align: justify;">12. For the reasons given above, the appeal fails and is accordingly dismissed.<p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ), 'casename_url' => 'shah-guman-mal-vs-state-andhra-pradesh', 'args' => array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) ) $title_for_layout = 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ' $desc = array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p>S. Murtaza Fazal Ali, J.</p><p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p>135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p>(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 Section 111.</p><p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p>Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p></p><p>', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ) $casename_url = 'shah-guman-mal-vs-state-andhra-pradesh' $args = array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) $url = 'https://sooperkanoon.com/case/amp/651373/shah-guman-mal-vs-state-andhra-pradesh' $ctype = '' $caseref = 'Balumal Jamnadas Batra v. State of Maharashtra<br>' $content = array( (int) 0 => '<p>S. Murtaza Fazal Ali, J.', (int) 1 => '<p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.', (int) 2 => '<p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.', (int) 3 => '<p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:', (int) 4 => '<p>135(1) Without prejudice to any action that may be taken under this Act, if any person-', (int) 5 => '<p>(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 Section 111.', (int) 6 => '<p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:', (int) 7 => '<p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. ', (int) 8 => '<p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:', (int) 9 => '<p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. ', (int) 10 => '<p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.', (int) 11 => '<p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:', (int) 12 => '<p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). ', (int) 13 => '<p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.', (int) 14 => '<p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:', (int) 15 => '<p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. ', (int) 16 => '<p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:', (int) 17 => '<p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. ', (int) 18 => '<p>Similarly, while dealing with the merits of the case, this Court made the following observations:', (int) 19 => '<p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.', (int) 20 => '<p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:', (int) 21 => '<p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.', (int) 22 => '<p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.', (int) 23 => '<p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:', (int) 24 => '<p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. ', (int) 25 => '<p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.', (int) 26 => '<p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', (int) 27 => '<p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.', (int) 28 => '<p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p>', (int) 29 => '<p>' ) $paragraphAfter = (int) 1 $cnt = (int) 30 $i = (int) 9include - APP/View/Case/amp.ctp, line 144 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 963 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 109
If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier.
Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]Code Contextecho $this->Adsense->display('responsive_rect');}echo html_entity_decode($this->Wand->highlight($content[$i], $query));$viewFile = '/home/legalcrystal/app/View/Case/amp.ctp' $dataForView = array( 'title_for_layout' => 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ', 'desc' => array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p style="text-align: justify;">S. Murtaza Fazal Ali, J.</p><p style="text-align: justify;">1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p style="text-align: justify;">2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p style="text-align: justify;">3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p style="text-align: justify;">135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p style="text-align: justify;">(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 Section 111.</p><p style="text-align: justify;">4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p style="text-align: justify;">Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p style="text-align: justify;">These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p style="text-align: justify;">If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p style="text-align: justify;">5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p style="text-align: justify;">6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p style="text-align: justify;">In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p style="text-align: justify;">7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p style="text-align: justify;">8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p style="text-align: justify;">When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p style="text-align: justify;">It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p style="text-align: justify;">It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p style="text-align: justify;">Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p style="text-align: justify;">In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p style="text-align: justify;">It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p style="text-align: justify;">Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p style="text-align: justify;">Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p style="text-align: justify;">The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p style="text-align: justify;">The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p style="text-align: justify;">9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p style="text-align: justify;">10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p style="text-align: justify;">11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p style="text-align: justify;">12. For the reasons given above, the appeal fails and is accordingly dismissed.<p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ), 'casename_url' => 'shah-guman-mal-vs-state-andhra-pradesh', 'args' => array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) ) $title_for_layout = 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ' $desc = array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p>S. Murtaza Fazal Ali, J.</p><p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p>135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p>(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 Section 111.</p><p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p>Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p></p><p>', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ) $casename_url = 'shah-guman-mal-vs-state-andhra-pradesh' $args = array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) $url = 'https://sooperkanoon.com/case/amp/651373/shah-guman-mal-vs-state-andhra-pradesh' $ctype = '' $caseref = 'Balumal Jamnadas Batra v. State of Maharashtra<br>' $content = array( (int) 0 => '<p>S. Murtaza Fazal Ali, J.', (int) 1 => '<p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.', (int) 2 => '<p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.', (int) 3 => '<p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:', (int) 4 => '<p>135(1) Without prejudice to any action that may be taken under this Act, if any person-', (int) 5 => '<p>(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 Section 111.', (int) 6 => '<p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:', (int) 7 => '<p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. ', (int) 8 => '<p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:', (int) 9 => '<p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. ', (int) 10 => '<p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.', (int) 11 => '<p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:', (int) 12 => '<p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). ', (int) 13 => '<p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.', (int) 14 => '<p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:', (int) 15 => '<p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. ', (int) 16 => '<p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:', (int) 17 => '<p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. ', (int) 18 => '<p>Similarly, while dealing with the merits of the case, this Court made the following observations:', (int) 19 => '<p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.', (int) 20 => '<p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:', (int) 21 => '<p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.', (int) 22 => '<p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.', (int) 23 => '<p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:', (int) 24 => '<p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. ', (int) 25 => '<p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.', (int) 26 => '<p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', (int) 27 => '<p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.', (int) 28 => '<p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p>', (int) 29 => '<p>' ) $paragraphAfter = (int) 1 $cnt = (int) 30 $i = (int) 10include - APP/View/Case/amp.ctp, line 144 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 963 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 109
5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.
Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]Code Contextecho $this->Adsense->display('responsive_rect');}echo html_entity_decode($this->Wand->highlight($content[$i], $query));$viewFile = '/home/legalcrystal/app/View/Case/amp.ctp' $dataForView = array( 'title_for_layout' => 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ', 'desc' => array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p style="text-align: justify;">S. Murtaza Fazal Ali, J.</p><p style="text-align: justify;">1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p style="text-align: justify;">2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p style="text-align: justify;">3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p style="text-align: justify;">135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p style="text-align: justify;">(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 Section 111.</p><p style="text-align: justify;">4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p style="text-align: justify;">Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p style="text-align: justify;">These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p style="text-align: justify;">If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p style="text-align: justify;">5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p style="text-align: justify;">6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p style="text-align: justify;">In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p style="text-align: justify;">7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p style="text-align: justify;">8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p style="text-align: justify;">When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p style="text-align: justify;">It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p style="text-align: justify;">It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p style="text-align: justify;">Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p style="text-align: justify;">In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p style="text-align: justify;">It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p style="text-align: justify;">Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p style="text-align: justify;">Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p style="text-align: justify;">The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p style="text-align: justify;">The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p style="text-align: justify;">9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p style="text-align: justify;">10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p style="text-align: justify;">11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p style="text-align: justify;">12. For the reasons given above, the appeal fails and is accordingly dismissed.<p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ), 'casename_url' => 'shah-guman-mal-vs-state-andhra-pradesh', 'args' => array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) ) $title_for_layout = 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ' $desc = array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p>S. Murtaza Fazal Ali, J.</p><p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p>135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p>(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 Section 111.</p><p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p>Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p></p><p>', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ) $casename_url = 'shah-guman-mal-vs-state-andhra-pradesh' $args = array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) $url = 'https://sooperkanoon.com/case/amp/651373/shah-guman-mal-vs-state-andhra-pradesh' $ctype = '' $caseref = 'Balumal Jamnadas Batra v. State of Maharashtra<br>' $content = array( (int) 0 => '<p>S. Murtaza Fazal Ali, J.', (int) 1 => '<p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.', (int) 2 => '<p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.', (int) 3 => '<p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:', (int) 4 => '<p>135(1) Without prejudice to any action that may be taken under this Act, if any person-', (int) 5 => '<p>(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 Section 111.', (int) 6 => '<p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:', (int) 7 => '<p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. ', (int) 8 => '<p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:', (int) 9 => '<p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. ', (int) 10 => '<p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.', (int) 11 => '<p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:', (int) 12 => '<p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). ', (int) 13 => '<p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.', (int) 14 => '<p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:', (int) 15 => '<p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. ', (int) 16 => '<p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:', (int) 17 => '<p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. ', (int) 18 => '<p>Similarly, while dealing with the merits of the case, this Court made the following observations:', (int) 19 => '<p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.', (int) 20 => '<p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:', (int) 21 => '<p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.', (int) 22 => '<p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.', (int) 23 => '<p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:', (int) 24 => '<p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. ', (int) 25 => '<p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.', (int) 26 => '<p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', (int) 27 => '<p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.', (int) 28 => '<p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p>', (int) 29 => '<p>' ) $paragraphAfter = (int) 1 $cnt = (int) 30 $i = (int) 11include - APP/View/Case/amp.ctp, line 144 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 963 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 109
6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:
Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]Code Contextecho $this->Adsense->display('responsive_rect');}echo html_entity_decode($this->Wand->highlight($content[$i], $query));$viewFile = '/home/legalcrystal/app/View/Case/amp.ctp' $dataForView = array( 'title_for_layout' => 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ', 'desc' => array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p style="text-align: justify;">S. Murtaza Fazal Ali, J.</p><p style="text-align: justify;">1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p style="text-align: justify;">2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p style="text-align: justify;">3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p style="text-align: justify;">135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p style="text-align: justify;">(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 Section 111.</p><p style="text-align: justify;">4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p style="text-align: justify;">Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p style="text-align: justify;">These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p style="text-align: justify;">If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p style="text-align: justify;">5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p style="text-align: justify;">6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p style="text-align: justify;">In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p style="text-align: justify;">7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p style="text-align: justify;">8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p style="text-align: justify;">When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p style="text-align: justify;">It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p style="text-align: justify;">It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p style="text-align: justify;">Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p style="text-align: justify;">In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p style="text-align: justify;">It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p style="text-align: justify;">Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p style="text-align: justify;">Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p style="text-align: justify;">The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p style="text-align: justify;">The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p style="text-align: justify;">9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p style="text-align: justify;">10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p style="text-align: justify;">11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p style="text-align: justify;">12. For the reasons given above, the appeal fails and is accordingly dismissed.<p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ), 'casename_url' => 'shah-guman-mal-vs-state-andhra-pradesh', 'args' => array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) ) $title_for_layout = 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ' $desc = array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p>S. Murtaza Fazal Ali, J.</p><p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p>135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p>(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 Section 111.</p><p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p>Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p></p><p>', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ) $casename_url = 'shah-guman-mal-vs-state-andhra-pradesh' $args = array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) $url = 'https://sooperkanoon.com/case/amp/651373/shah-guman-mal-vs-state-andhra-pradesh' $ctype = '' $caseref = 'Balumal Jamnadas Batra v. State of Maharashtra<br>' $content = array( (int) 0 => '<p>S. Murtaza Fazal Ali, J.', (int) 1 => '<p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.', (int) 2 => '<p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.', (int) 3 => '<p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:', (int) 4 => '<p>135(1) Without prejudice to any action that may be taken under this Act, if any person-', (int) 5 => '<p>(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 Section 111.', (int) 6 => '<p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:', (int) 7 => '<p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. ', (int) 8 => '<p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:', (int) 9 => '<p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. ', (int) 10 => '<p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.', (int) 11 => '<p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:', (int) 12 => '<p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). ', (int) 13 => '<p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.', (int) 14 => '<p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:', (int) 15 => '<p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. ', (int) 16 => '<p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:', (int) 17 => '<p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. ', (int) 18 => '<p>Similarly, while dealing with the merits of the case, this Court made the following observations:', (int) 19 => '<p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.', (int) 20 => '<p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:', (int) 21 => '<p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.', (int) 22 => '<p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.', (int) 23 => '<p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:', (int) 24 => '<p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. ', (int) 25 => '<p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.', (int) 26 => '<p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', (int) 27 => '<p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.', (int) 28 => '<p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p>', (int) 29 => '<p>' ) $paragraphAfter = (int) 1 $cnt = (int) 30 $i = (int) 12include - APP/View/Case/amp.ctp, line 144 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 963 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 109
In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81).
Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]Code Contextecho $this->Adsense->display('responsive_rect');}echo html_entity_decode($this->Wand->highlight($content[$i], $query));$viewFile = '/home/legalcrystal/app/View/Case/amp.ctp' $dataForView = array( 'title_for_layout' => 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ', 'desc' => array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p style="text-align: justify;">S. Murtaza Fazal Ali, J.</p><p style="text-align: justify;">1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p style="text-align: justify;">2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p style="text-align: justify;">3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p style="text-align: justify;">135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p style="text-align: justify;">(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 Section 111.</p><p style="text-align: justify;">4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p style="text-align: justify;">Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p style="text-align: justify;">These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p style="text-align: justify;">If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p style="text-align: justify;">5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p style="text-align: justify;">6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p style="text-align: justify;">In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p style="text-align: justify;">7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p style="text-align: justify;">8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p style="text-align: justify;">When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p style="text-align: justify;">It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p style="text-align: justify;">It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p style="text-align: justify;">Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p style="text-align: justify;">In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p style="text-align: justify;">It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p style="text-align: justify;">Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p style="text-align: justify;">Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p style="text-align: justify;">The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p style="text-align: justify;">The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p style="text-align: justify;">9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p style="text-align: justify;">10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p style="text-align: justify;">11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p style="text-align: justify;">12. For the reasons given above, the appeal fails and is accordingly dismissed.<p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ), 'casename_url' => 'shah-guman-mal-vs-state-andhra-pradesh', 'args' => array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) ) $title_for_layout = 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ' $desc = array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p>S. Murtaza Fazal Ali, J.</p><p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p>135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p>(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 Section 111.</p><p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p>Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p></p><p>', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ) $casename_url = 'shah-guman-mal-vs-state-andhra-pradesh' $args = array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) $url = 'https://sooperkanoon.com/case/amp/651373/shah-guman-mal-vs-state-andhra-pradesh' $ctype = '' $caseref = 'Balumal Jamnadas Batra v. State of Maharashtra<br>' $content = array( (int) 0 => '<p>S. Murtaza Fazal Ali, J.', (int) 1 => '<p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.', (int) 2 => '<p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.', (int) 3 => '<p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:', (int) 4 => '<p>135(1) Without prejudice to any action that may be taken under this Act, if any person-', (int) 5 => '<p>(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 Section 111.', (int) 6 => '<p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:', (int) 7 => '<p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. ', (int) 8 => '<p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:', (int) 9 => '<p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. ', (int) 10 => '<p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.', (int) 11 => '<p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:', (int) 12 => '<p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). ', (int) 13 => '<p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.', (int) 14 => '<p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:', (int) 15 => '<p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. ', (int) 16 => '<p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:', (int) 17 => '<p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. ', (int) 18 => '<p>Similarly, while dealing with the merits of the case, this Court made the following observations:', (int) 19 => '<p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.', (int) 20 => '<p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:', (int) 21 => '<p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.', (int) 22 => '<p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.', (int) 23 => '<p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:', (int) 24 => '<p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. ', (int) 25 => '<p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.', (int) 26 => '<p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', (int) 27 => '<p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.', (int) 28 => '<p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p>', (int) 29 => '<p>' ) $paragraphAfter = (int) 1 $cnt = (int) 30 $i = (int) 13include - APP/View/Case/amp.ctp, line 144 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 963 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 109
7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.
Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]Code Contextecho $this->Adsense->display('responsive_rect');}echo html_entity_decode($this->Wand->highlight($content[$i], $query));$viewFile = '/home/legalcrystal/app/View/Case/amp.ctp' $dataForView = array( 'title_for_layout' => 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ', 'desc' => array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p style="text-align: justify;">S. Murtaza Fazal Ali, J.</p><p style="text-align: justify;">1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p style="text-align: justify;">2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p style="text-align: justify;">3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p style="text-align: justify;">135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p style="text-align: justify;">(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 Section 111.</p><p style="text-align: justify;">4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p style="text-align: justify;">Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p style="text-align: justify;">These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p style="text-align: justify;">If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p style="text-align: justify;">5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p style="text-align: justify;">6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p style="text-align: justify;">In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p style="text-align: justify;">7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p style="text-align: justify;">8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p style="text-align: justify;">When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p style="text-align: justify;">It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p style="text-align: justify;">It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p style="text-align: justify;">Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p style="text-align: justify;">In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p style="text-align: justify;">It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p style="text-align: justify;">Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p style="text-align: justify;">Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p style="text-align: justify;">The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p style="text-align: justify;">The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p style="text-align: justify;">9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p style="text-align: justify;">10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p style="text-align: justify;">11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p style="text-align: justify;">12. For the reasons given above, the appeal fails and is accordingly dismissed.<p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ), 'casename_url' => 'shah-guman-mal-vs-state-andhra-pradesh', 'args' => array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) ) $title_for_layout = 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ' $desc = array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p>S. Murtaza Fazal Ali, J.</p><p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p>135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p>(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 Section 111.</p><p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p>Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p></p><p>', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ) $casename_url = 'shah-guman-mal-vs-state-andhra-pradesh' $args = array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) $url = 'https://sooperkanoon.com/case/amp/651373/shah-guman-mal-vs-state-andhra-pradesh' $ctype = '' $caseref = 'Balumal Jamnadas Batra v. State of Maharashtra<br>' $content = array( (int) 0 => '<p>S. Murtaza Fazal Ali, J.', (int) 1 => '<p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.', (int) 2 => '<p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.', (int) 3 => '<p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:', (int) 4 => '<p>135(1) Without prejudice to any action that may be taken under this Act, if any person-', (int) 5 => '<p>(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 Section 111.', (int) 6 => '<p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:', (int) 7 => '<p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. ', (int) 8 => '<p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:', (int) 9 => '<p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. ', (int) 10 => '<p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.', (int) 11 => '<p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:', (int) 12 => '<p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). ', (int) 13 => '<p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.', (int) 14 => '<p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:', (int) 15 => '<p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. ', (int) 16 => '<p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:', (int) 17 => '<p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. ', (int) 18 => '<p>Similarly, while dealing with the merits of the case, this Court made the following observations:', (int) 19 => '<p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.', (int) 20 => '<p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:', (int) 21 => '<p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.', (int) 22 => '<p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.', (int) 23 => '<p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:', (int) 24 => '<p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. ', (int) 25 => '<p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.', (int) 26 => '<p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', (int) 27 => '<p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.', (int) 28 => '<p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p>', (int) 29 => '<p>' ) $paragraphAfter = (int) 1 $cnt = (int) 30 $i = (int) 14include - APP/View/Case/amp.ctp, line 144 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 963 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 109
8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:
Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]Code Contextecho $this->Adsense->display('responsive_rect');}echo html_entity_decode($this->Wand->highlight($content[$i], $query));$viewFile = '/home/legalcrystal/app/View/Case/amp.ctp' $dataForView = array( 'title_for_layout' => 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ', 'desc' => array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p style="text-align: justify;">S. Murtaza Fazal Ali, J.</p><p style="text-align: justify;">1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p style="text-align: justify;">2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p style="text-align: justify;">3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p style="text-align: justify;">135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p style="text-align: justify;">(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 Section 111.</p><p style="text-align: justify;">4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p style="text-align: justify;">Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p style="text-align: justify;">These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p style="text-align: justify;">If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p style="text-align: justify;">5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p style="text-align: justify;">6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p style="text-align: justify;">In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p style="text-align: justify;">7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p style="text-align: justify;">8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p style="text-align: justify;">When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p style="text-align: justify;">It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p style="text-align: justify;">It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p style="text-align: justify;">Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p style="text-align: justify;">In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p style="text-align: justify;">It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p style="text-align: justify;">Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p style="text-align: justify;">Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p style="text-align: justify;">The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p style="text-align: justify;">The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p style="text-align: justify;">9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p style="text-align: justify;">10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p style="text-align: justify;">11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p style="text-align: justify;">12. For the reasons given above, the appeal fails and is accordingly dismissed.<p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ), 'casename_url' => 'shah-guman-mal-vs-state-andhra-pradesh', 'args' => array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) ) $title_for_layout = 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ' $desc = array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p>S. Murtaza Fazal Ali, J.</p><p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p>135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p>(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 Section 111.</p><p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p>Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p></p><p>', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ) $casename_url = 'shah-guman-mal-vs-state-andhra-pradesh' $args = array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) $url = 'https://sooperkanoon.com/case/amp/651373/shah-guman-mal-vs-state-andhra-pradesh' $ctype = '' $caseref = 'Balumal Jamnadas Batra v. State of Maharashtra<br>' $content = array( (int) 0 => '<p>S. Murtaza Fazal Ali, J.', (int) 1 => '<p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.', (int) 2 => '<p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.', (int) 3 => '<p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:', (int) 4 => '<p>135(1) Without prejudice to any action that may be taken under this Act, if any person-', (int) 5 => '<p>(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 Section 111.', (int) 6 => '<p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:', (int) 7 => '<p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. ', (int) 8 => '<p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:', (int) 9 => '<p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. ', (int) 10 => '<p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.', (int) 11 => '<p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:', (int) 12 => '<p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). ', (int) 13 => '<p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.', (int) 14 => '<p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:', (int) 15 => '<p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. ', (int) 16 => '<p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:', (int) 17 => '<p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. ', (int) 18 => '<p>Similarly, while dealing with the merits of the case, this Court made the following observations:', (int) 19 => '<p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.', (int) 20 => '<p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:', (int) 21 => '<p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.', (int) 22 => '<p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.', (int) 23 => '<p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:', (int) 24 => '<p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. ', (int) 25 => '<p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.', (int) 26 => '<p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', (int) 27 => '<p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.', (int) 28 => '<p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p>', (int) 29 => '<p>' ) $paragraphAfter = (int) 1 $cnt = (int) 30 $i = (int) 15include - APP/View/Case/amp.ctp, line 144 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 963 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 109
When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other.
Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]Code Contextecho $this->Adsense->display('responsive_rect');}echo html_entity_decode($this->Wand->highlight($content[$i], $query));$viewFile = '/home/legalcrystal/app/View/Case/amp.ctp' $dataForView = array( 'title_for_layout' => 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ', 'desc' => array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p style="text-align: justify;">S. Murtaza Fazal Ali, J.</p><p style="text-align: justify;">1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p style="text-align: justify;">2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p style="text-align: justify;">3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p style="text-align: justify;">135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p style="text-align: justify;">(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 Section 111.</p><p style="text-align: justify;">4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p style="text-align: justify;">Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p style="text-align: justify;">These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p style="text-align: justify;">If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p style="text-align: justify;">5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p style="text-align: justify;">6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p style="text-align: justify;">In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p style="text-align: justify;">7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p style="text-align: justify;">8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p style="text-align: justify;">When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p style="text-align: justify;">It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p style="text-align: justify;">It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p style="text-align: justify;">Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p style="text-align: justify;">In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p style="text-align: justify;">It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p style="text-align: justify;">Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p style="text-align: justify;">Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p style="text-align: justify;">The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p style="text-align: justify;">The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p style="text-align: justify;">9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p style="text-align: justify;">10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p style="text-align: justify;">11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p style="text-align: justify;">12. For the reasons given above, the appeal fails and is accordingly dismissed.<p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ), 'casename_url' => 'shah-guman-mal-vs-state-andhra-pradesh', 'args' => array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) ) $title_for_layout = 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ' $desc = array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p>S. Murtaza Fazal Ali, J.</p><p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p>135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p>(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 Section 111.</p><p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p>Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p></p><p>', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ) $casename_url = 'shah-guman-mal-vs-state-andhra-pradesh' $args = array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) $url = 'https://sooperkanoon.com/case/amp/651373/shah-guman-mal-vs-state-andhra-pradesh' $ctype = '' $caseref = 'Balumal Jamnadas Batra v. State of Maharashtra<br>' $content = array( (int) 0 => '<p>S. Murtaza Fazal Ali, J.', (int) 1 => '<p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.', (int) 2 => '<p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.', (int) 3 => '<p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:', (int) 4 => '<p>135(1) Without prejudice to any action that may be taken under this Act, if any person-', (int) 5 => '<p>(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 Section 111.', (int) 6 => '<p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:', (int) 7 => '<p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. ', (int) 8 => '<p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:', (int) 9 => '<p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. ', (int) 10 => '<p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.', (int) 11 => '<p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:', (int) 12 => '<p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). ', (int) 13 => '<p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.', (int) 14 => '<p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:', (int) 15 => '<p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. ', (int) 16 => '<p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:', (int) 17 => '<p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. ', (int) 18 => '<p>Similarly, while dealing with the merits of the case, this Court made the following observations:', (int) 19 => '<p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.', (int) 20 => '<p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:', (int) 21 => '<p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.', (int) 22 => '<p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.', (int) 23 => '<p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:', (int) 24 => '<p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. ', (int) 25 => '<p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.', (int) 26 => '<p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', (int) 27 => '<p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.', (int) 28 => '<p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p>', (int) 29 => '<p>' ) $paragraphAfter = (int) 1 $cnt = (int) 30 $i = (int) 16include - APP/View/Case/amp.ctp, line 144 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 963 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 109
It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:
Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]Code Contextecho $this->Adsense->display('responsive_rect');}echo html_entity_decode($this->Wand->highlight($content[$i], $query));$viewFile = '/home/legalcrystal/app/View/Case/amp.ctp' $dataForView = array( 'title_for_layout' => 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ', 'desc' => array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p style="text-align: justify;">S. Murtaza Fazal Ali, J.</p><p style="text-align: justify;">1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p style="text-align: justify;">2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p style="text-align: justify;">3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p style="text-align: justify;">135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p style="text-align: justify;">(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 Section 111.</p><p style="text-align: justify;">4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p style="text-align: justify;">Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p style="text-align: justify;">These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p style="text-align: justify;">If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p style="text-align: justify;">5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p style="text-align: justify;">6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p style="text-align: justify;">In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p style="text-align: justify;">7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p style="text-align: justify;">8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p style="text-align: justify;">When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p style="text-align: justify;">It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p style="text-align: justify;">It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p style="text-align: justify;">Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p style="text-align: justify;">In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p style="text-align: justify;">It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p style="text-align: justify;">Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p style="text-align: justify;">Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p style="text-align: justify;">The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p style="text-align: justify;">The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p style="text-align: justify;">9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p style="text-align: justify;">10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p style="text-align: justify;">11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p style="text-align: justify;">12. For the reasons given above, the appeal fails and is accordingly dismissed.<p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ), 'casename_url' => 'shah-guman-mal-vs-state-andhra-pradesh', 'args' => array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) ) $title_for_layout = 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ' $desc = array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p>S. Murtaza Fazal Ali, J.</p><p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p>135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p>(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 Section 111.</p><p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p>Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p></p><p>', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ) $casename_url = 'shah-guman-mal-vs-state-andhra-pradesh' $args = array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) $url = 'https://sooperkanoon.com/case/amp/651373/shah-guman-mal-vs-state-andhra-pradesh' $ctype = '' $caseref = 'Balumal Jamnadas Batra v. State of Maharashtra<br>' $content = array( (int) 0 => '<p>S. Murtaza Fazal Ali, J.', (int) 1 => '<p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.', (int) 2 => '<p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.', (int) 3 => '<p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:', (int) 4 => '<p>135(1) Without prejudice to any action that may be taken under this Act, if any person-', (int) 5 => '<p>(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 Section 111.', (int) 6 => '<p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:', (int) 7 => '<p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. ', (int) 8 => '<p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:', (int) 9 => '<p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. ', (int) 10 => '<p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.', (int) 11 => '<p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:', (int) 12 => '<p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). ', (int) 13 => '<p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.', (int) 14 => '<p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:', (int) 15 => '<p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. ', (int) 16 => '<p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:', (int) 17 => '<p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. ', (int) 18 => '<p>Similarly, while dealing with the merits of the case, this Court made the following observations:', (int) 19 => '<p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.', (int) 20 => '<p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:', (int) 21 => '<p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.', (int) 22 => '<p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.', (int) 23 => '<p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:', (int) 24 => '<p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. ', (int) 25 => '<p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.', (int) 26 => '<p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', (int) 27 => '<p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.', (int) 28 => '<p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p>', (int) 29 => '<p>' ) $paragraphAfter = (int) 1 $cnt = (int) 30 $i = (int) 17include - APP/View/Case/amp.ctp, line 144 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 963 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 109
It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case.
Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]Code Contextecho $this->Adsense->display('responsive_rect');}echo html_entity_decode($this->Wand->highlight($content[$i], $query));$viewFile = '/home/legalcrystal/app/View/Case/amp.ctp' $dataForView = array( 'title_for_layout' => 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ', 'desc' => array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p style="text-align: justify;">S. Murtaza Fazal Ali, J.</p><p style="text-align: justify;">1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p style="text-align: justify;">2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p style="text-align: justify;">3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p style="text-align: justify;">135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p style="text-align: justify;">(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 Section 111.</p><p style="text-align: justify;">4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p style="text-align: justify;">Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p style="text-align: justify;">These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p style="text-align: justify;">If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p style="text-align: justify;">5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p style="text-align: justify;">6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p style="text-align: justify;">In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p style="text-align: justify;">7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p style="text-align: justify;">8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p style="text-align: justify;">When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p style="text-align: justify;">It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p style="text-align: justify;">It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p style="text-align: justify;">Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p style="text-align: justify;">In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p style="text-align: justify;">It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p style="text-align: justify;">Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p style="text-align: justify;">Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p style="text-align: justify;">The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p style="text-align: justify;">The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p style="text-align: justify;">9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p style="text-align: justify;">10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p style="text-align: justify;">11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p style="text-align: justify;">12. For the reasons given above, the appeal fails and is accordingly dismissed.<p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ), 'casename_url' => 'shah-guman-mal-vs-state-andhra-pradesh', 'args' => array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) ) $title_for_layout = 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ' $desc = array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p>S. Murtaza Fazal Ali, J.</p><p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p>135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p>(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 Section 111.</p><p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p>Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p></p><p>', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ) $casename_url = 'shah-guman-mal-vs-state-andhra-pradesh' $args = array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) $url = 'https://sooperkanoon.com/case/amp/651373/shah-guman-mal-vs-state-andhra-pradesh' $ctype = '' $caseref = 'Balumal Jamnadas Batra v. State of Maharashtra<br>' $content = array( (int) 0 => '<p>S. Murtaza Fazal Ali, J.', (int) 1 => '<p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.', (int) 2 => '<p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.', (int) 3 => '<p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:', (int) 4 => '<p>135(1) Without prejudice to any action that may be taken under this Act, if any person-', (int) 5 => '<p>(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 Section 111.', (int) 6 => '<p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:', (int) 7 => '<p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. ', (int) 8 => '<p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:', (int) 9 => '<p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. ', (int) 10 => '<p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.', (int) 11 => '<p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:', (int) 12 => '<p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). ', (int) 13 => '<p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.', (int) 14 => '<p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:', (int) 15 => '<p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. ', (int) 16 => '<p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:', (int) 17 => '<p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. ', (int) 18 => '<p>Similarly, while dealing with the merits of the case, this Court made the following observations:', (int) 19 => '<p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.', (int) 20 => '<p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:', (int) 21 => '<p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.', (int) 22 => '<p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.', (int) 23 => '<p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:', (int) 24 => '<p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. ', (int) 25 => '<p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.', (int) 26 => '<p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', (int) 27 => '<p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.', (int) 28 => '<p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p>', (int) 29 => '<p>' ) $paragraphAfter = (int) 1 $cnt = (int) 30 $i = (int) 18include - APP/View/Case/amp.ctp, line 144 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 963 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 109
Similarly, while dealing with the merits of the case, this Court made the following observations:
Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]Code Contextecho $this->Adsense->display('responsive_rect');}echo html_entity_decode($this->Wand->highlight($content[$i], $query));$viewFile = '/home/legalcrystal/app/View/Case/amp.ctp' $dataForView = array( 'title_for_layout' => 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ', 'desc' => array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p style="text-align: justify;">S. Murtaza Fazal Ali, J.</p><p style="text-align: justify;">1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p style="text-align: justify;">2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p style="text-align: justify;">3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p style="text-align: justify;">135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p style="text-align: justify;">(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 Section 111.</p><p style="text-align: justify;">4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p style="text-align: justify;">Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p style="text-align: justify;">These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p style="text-align: justify;">If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p style="text-align: justify;">5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p style="text-align: justify;">6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p style="text-align: justify;">In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p style="text-align: justify;">7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p style="text-align: justify;">8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p style="text-align: justify;">When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p style="text-align: justify;">It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p style="text-align: justify;">It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p style="text-align: justify;">Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p style="text-align: justify;">In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p style="text-align: justify;">It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p style="text-align: justify;">Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p style="text-align: justify;">Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p style="text-align: justify;">The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p style="text-align: justify;">The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p style="text-align: justify;">9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p style="text-align: justify;">10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p style="text-align: justify;">11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p style="text-align: justify;">12. For the reasons given above, the appeal fails and is accordingly dismissed.<p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ), 'casename_url' => 'shah-guman-mal-vs-state-andhra-pradesh', 'args' => array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) ) $title_for_layout = 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ' $desc = array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p>S. Murtaza Fazal Ali, J.</p><p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p>135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p>(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 Section 111.</p><p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p>Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p></p><p>', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ) $casename_url = 'shah-guman-mal-vs-state-andhra-pradesh' $args = array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) $url = 'https://sooperkanoon.com/case/amp/651373/shah-guman-mal-vs-state-andhra-pradesh' $ctype = '' $caseref = 'Balumal Jamnadas Batra v. State of Maharashtra<br>' $content = array( (int) 0 => '<p>S. Murtaza Fazal Ali, J.', (int) 1 => '<p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.', (int) 2 => '<p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.', (int) 3 => '<p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:', (int) 4 => '<p>135(1) Without prejudice to any action that may be taken under this Act, if any person-', (int) 5 => '<p>(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 Section 111.', (int) 6 => '<p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:', (int) 7 => '<p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. ', (int) 8 => '<p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:', (int) 9 => '<p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. ', (int) 10 => '<p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.', (int) 11 => '<p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:', (int) 12 => '<p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). ', (int) 13 => '<p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.', (int) 14 => '<p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:', (int) 15 => '<p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. ', (int) 16 => '<p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:', (int) 17 => '<p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. ', (int) 18 => '<p>Similarly, while dealing with the merits of the case, this Court made the following observations:', (int) 19 => '<p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.', (int) 20 => '<p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:', (int) 21 => '<p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.', (int) 22 => '<p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.', (int) 23 => '<p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:', (int) 24 => '<p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. ', (int) 25 => '<p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.', (int) 26 => '<p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', (int) 27 => '<p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.', (int) 28 => '<p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p>', (int) 29 => '<p>' ) $paragraphAfter = (int) 1 $cnt = (int) 30 $i = (int) 19include - APP/View/Case/amp.ctp, line 144 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 963 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 109
In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.
Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]Code Contextecho $this->Adsense->display('responsive_rect');}echo html_entity_decode($this->Wand->highlight($content[$i], $query));$viewFile = '/home/legalcrystal/app/View/Case/amp.ctp' $dataForView = array( 'title_for_layout' => 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ', 'desc' => array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p style="text-align: justify;">S. Murtaza Fazal Ali, J.</p><p style="text-align: justify;">1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p style="text-align: justify;">2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p style="text-align: justify;">3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p style="text-align: justify;">135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p style="text-align: justify;">(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 Section 111.</p><p style="text-align: justify;">4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p style="text-align: justify;">Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p style="text-align: justify;">These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p style="text-align: justify;">If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p style="text-align: justify;">5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p style="text-align: justify;">6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p style="text-align: justify;">In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p style="text-align: justify;">7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p style="text-align: justify;">8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p style="text-align: justify;">When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p style="text-align: justify;">It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p style="text-align: justify;">It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p style="text-align: justify;">Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p style="text-align: justify;">In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p style="text-align: justify;">It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p style="text-align: justify;">Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p style="text-align: justify;">Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p style="text-align: justify;">The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p style="text-align: justify;">The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p style="text-align: justify;">9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p style="text-align: justify;">10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p style="text-align: justify;">11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p style="text-align: justify;">12. For the reasons given above, the appeal fails and is accordingly dismissed.<p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ), 'casename_url' => 'shah-guman-mal-vs-state-andhra-pradesh', 'args' => array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) ) $title_for_layout = 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ' $desc = array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p>S. Murtaza Fazal Ali, J.</p><p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p>135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p>(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 Section 111.</p><p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p>Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p></p><p>', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ) $casename_url = 'shah-guman-mal-vs-state-andhra-pradesh' $args = array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) $url = 'https://sooperkanoon.com/case/amp/651373/shah-guman-mal-vs-state-andhra-pradesh' $ctype = '' $caseref = 'Balumal Jamnadas Batra v. State of Maharashtra<br>' $content = array( (int) 0 => '<p>S. Murtaza Fazal Ali, J.', (int) 1 => '<p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.', (int) 2 => '<p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.', (int) 3 => '<p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:', (int) 4 => '<p>135(1) Without prejudice to any action that may be taken under this Act, if any person-', (int) 5 => '<p>(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 Section 111.', (int) 6 => '<p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:', (int) 7 => '<p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. ', (int) 8 => '<p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:', (int) 9 => '<p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. ', (int) 10 => '<p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.', (int) 11 => '<p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:', (int) 12 => '<p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). ', (int) 13 => '<p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.', (int) 14 => '<p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:', (int) 15 => '<p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. ', (int) 16 => '<p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:', (int) 17 => '<p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. ', (int) 18 => '<p>Similarly, while dealing with the merits of the case, this Court made the following observations:', (int) 19 => '<p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.', (int) 20 => '<p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:', (int) 21 => '<p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.', (int) 22 => '<p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.', (int) 23 => '<p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:', (int) 24 => '<p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. ', (int) 25 => '<p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.', (int) 26 => '<p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', (int) 27 => '<p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.', (int) 28 => '<p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p>', (int) 29 => '<p>' ) $paragraphAfter = (int) 1 $cnt = (int) 30 $i = (int) 20include - APP/View/Case/amp.ctp, line 144 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 963 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 109
It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:
Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]Code Contextecho $this->Adsense->display('responsive_rect');}echo html_entity_decode($this->Wand->highlight($content[$i], $query));$viewFile = '/home/legalcrystal/app/View/Case/amp.ctp' $dataForView = array( 'title_for_layout' => 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ', 'desc' => array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p style="text-align: justify;">S. Murtaza Fazal Ali, J.</p><p style="text-align: justify;">1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p style="text-align: justify;">2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p style="text-align: justify;">3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p style="text-align: justify;">135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p style="text-align: justify;">(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 Section 111.</p><p style="text-align: justify;">4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p style="text-align: justify;">Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p style="text-align: justify;">These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p style="text-align: justify;">If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p style="text-align: justify;">5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p style="text-align: justify;">6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p style="text-align: justify;">In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p style="text-align: justify;">7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p style="text-align: justify;">8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p style="text-align: justify;">When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p style="text-align: justify;">It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p style="text-align: justify;">It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p style="text-align: justify;">Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p style="text-align: justify;">In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p style="text-align: justify;">It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p style="text-align: justify;">Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p style="text-align: justify;">Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p style="text-align: justify;">The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p style="text-align: justify;">The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p style="text-align: justify;">9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p style="text-align: justify;">10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p style="text-align: justify;">11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p style="text-align: justify;">12. For the reasons given above, the appeal fails and is accordingly dismissed.<p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ), 'casename_url' => 'shah-guman-mal-vs-state-andhra-pradesh', 'args' => array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) ) $title_for_layout = 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ' $desc = array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p>S. Murtaza Fazal Ali, J.</p><p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p>135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p>(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 Section 111.</p><p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p>Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p></p><p>', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ) $casename_url = 'shah-guman-mal-vs-state-andhra-pradesh' $args = array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) $url = 'https://sooperkanoon.com/case/amp/651373/shah-guman-mal-vs-state-andhra-pradesh' $ctype = '' $caseref = 'Balumal Jamnadas Batra v. State of Maharashtra<br>' $content = array( (int) 0 => '<p>S. Murtaza Fazal Ali, J.', (int) 1 => '<p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.', (int) 2 => '<p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.', (int) 3 => '<p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:', (int) 4 => '<p>135(1) Without prejudice to any action that may be taken under this Act, if any person-', (int) 5 => '<p>(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 Section 111.', (int) 6 => '<p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:', (int) 7 => '<p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. ', (int) 8 => '<p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:', (int) 9 => '<p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. ', (int) 10 => '<p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.', (int) 11 => '<p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:', (int) 12 => '<p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). ', (int) 13 => '<p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.', (int) 14 => '<p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:', (int) 15 => '<p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. ', (int) 16 => '<p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:', (int) 17 => '<p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. ', (int) 18 => '<p>Similarly, while dealing with the merits of the case, this Court made the following observations:', (int) 19 => '<p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.', (int) 20 => '<p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:', (int) 21 => '<p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.', (int) 22 => '<p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.', (int) 23 => '<p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:', (int) 24 => '<p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. ', (int) 25 => '<p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.', (int) 26 => '<p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', (int) 27 => '<p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.', (int) 28 => '<p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p>', (int) 29 => '<p>' ) $paragraphAfter = (int) 1 $cnt = (int) 30 $i = (int) 21include - APP/View/Case/amp.ctp, line 144 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 963 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 109
Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.
Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]Code Contextecho $this->Adsense->display('responsive_rect');}echo html_entity_decode($this->Wand->highlight($content[$i], $query));$viewFile = '/home/legalcrystal/app/View/Case/amp.ctp' $dataForView = array( 'title_for_layout' => 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ', 'desc' => array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p style="text-align: justify;">S. Murtaza Fazal Ali, J.</p><p style="text-align: justify;">1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p style="text-align: justify;">2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p style="text-align: justify;">3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p style="text-align: justify;">135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p style="text-align: justify;">(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 Section 111.</p><p style="text-align: justify;">4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p style="text-align: justify;">Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p style="text-align: justify;">These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p style="text-align: justify;">If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p style="text-align: justify;">5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p style="text-align: justify;">6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p style="text-align: justify;">In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p style="text-align: justify;">7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p style="text-align: justify;">8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p style="text-align: justify;">When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p style="text-align: justify;">It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p style="text-align: justify;">It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p style="text-align: justify;">Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p style="text-align: justify;">In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p style="text-align: justify;">It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p style="text-align: justify;">Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p style="text-align: justify;">Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p style="text-align: justify;">The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p style="text-align: justify;">The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p style="text-align: justify;">9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p style="text-align: justify;">10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p style="text-align: justify;">11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p style="text-align: justify;">12. For the reasons given above, the appeal fails and is accordingly dismissed.<p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ), 'casename_url' => 'shah-guman-mal-vs-state-andhra-pradesh', 'args' => array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) ) $title_for_layout = 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ' $desc = array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p>S. Murtaza Fazal Ali, J.</p><p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p>135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p>(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 Section 111.</p><p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p>Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p></p><p>', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ) $casename_url = 'shah-guman-mal-vs-state-andhra-pradesh' $args = array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) $url = 'https://sooperkanoon.com/case/amp/651373/shah-guman-mal-vs-state-andhra-pradesh' $ctype = '' $caseref = 'Balumal Jamnadas Batra v. State of Maharashtra<br>' $content = array( (int) 0 => '<p>S. Murtaza Fazal Ali, J.', (int) 1 => '<p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.', (int) 2 => '<p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.', (int) 3 => '<p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:', (int) 4 => '<p>135(1) Without prejudice to any action that may be taken under this Act, if any person-', (int) 5 => '<p>(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 Section 111.', (int) 6 => '<p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:', (int) 7 => '<p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. ', (int) 8 => '<p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:', (int) 9 => '<p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. ', (int) 10 => '<p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.', (int) 11 => '<p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:', (int) 12 => '<p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). ', (int) 13 => '<p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.', (int) 14 => '<p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:', (int) 15 => '<p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. ', (int) 16 => '<p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:', (int) 17 => '<p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. ', (int) 18 => '<p>Similarly, while dealing with the merits of the case, this Court made the following observations:', (int) 19 => '<p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.', (int) 20 => '<p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:', (int) 21 => '<p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.', (int) 22 => '<p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.', (int) 23 => '<p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:', (int) 24 => '<p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. ', (int) 25 => '<p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.', (int) 26 => '<p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', (int) 27 => '<p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.', (int) 28 => '<p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p>', (int) 29 => '<p>' ) $paragraphAfter = (int) 1 $cnt = (int) 30 $i = (int) 22include - APP/View/Case/amp.ctp, line 144 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 963 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 109
Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.
Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]Code Contextecho $this->Adsense->display('responsive_rect');}echo html_entity_decode($this->Wand->highlight($content[$i], $query));$viewFile = '/home/legalcrystal/app/View/Case/amp.ctp' $dataForView = array( 'title_for_layout' => 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ', 'desc' => array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p style="text-align: justify;">S. Murtaza Fazal Ali, J.</p><p style="text-align: justify;">1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p style="text-align: justify;">2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p style="text-align: justify;">3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p style="text-align: justify;">135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p style="text-align: justify;">(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 Section 111.</p><p style="text-align: justify;">4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p style="text-align: justify;">Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p style="text-align: justify;">These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p style="text-align: justify;">If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p style="text-align: justify;">5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p style="text-align: justify;">6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p style="text-align: justify;">In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p style="text-align: justify;">7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p style="text-align: justify;">8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p style="text-align: justify;">When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p style="text-align: justify;">It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p style="text-align: justify;">It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p style="text-align: justify;">Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p style="text-align: justify;">In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p style="text-align: justify;">It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p style="text-align: justify;">Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p style="text-align: justify;">Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p style="text-align: justify;">The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p style="text-align: justify;">The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p style="text-align: justify;">9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p style="text-align: justify;">10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p style="text-align: justify;">11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p style="text-align: justify;">12. For the reasons given above, the appeal fails and is accordingly dismissed.<p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ), 'casename_url' => 'shah-guman-mal-vs-state-andhra-pradesh', 'args' => array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) ) $title_for_layout = 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ' $desc = array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p>S. Murtaza Fazal Ali, J.</p><p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p>135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p>(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 Section 111.</p><p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p>Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p></p><p>', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ) $casename_url = 'shah-guman-mal-vs-state-andhra-pradesh' $args = array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) $url = 'https://sooperkanoon.com/case/amp/651373/shah-guman-mal-vs-state-andhra-pradesh' $ctype = '' $caseref = 'Balumal Jamnadas Batra v. State of Maharashtra<br>' $content = array( (int) 0 => '<p>S. Murtaza Fazal Ali, J.', (int) 1 => '<p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.', (int) 2 => '<p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.', (int) 3 => '<p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:', (int) 4 => '<p>135(1) Without prejudice to any action that may be taken under this Act, if any person-', (int) 5 => '<p>(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 Section 111.', (int) 6 => '<p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:', (int) 7 => '<p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. ', (int) 8 => '<p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:', (int) 9 => '<p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. ', (int) 10 => '<p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.', (int) 11 => '<p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:', (int) 12 => '<p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). ', (int) 13 => '<p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.', (int) 14 => '<p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:', (int) 15 => '<p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. ', (int) 16 => '<p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:', (int) 17 => '<p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. ', (int) 18 => '<p>Similarly, while dealing with the merits of the case, this Court made the following observations:', (int) 19 => '<p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.', (int) 20 => '<p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:', (int) 21 => '<p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.', (int) 22 => '<p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.', (int) 23 => '<p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:', (int) 24 => '<p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. ', (int) 25 => '<p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.', (int) 26 => '<p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', (int) 27 => '<p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.', (int) 28 => '<p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p>', (int) 29 => '<p>' ) $paragraphAfter = (int) 1 $cnt = (int) 30 $i = (int) 23include - APP/View/Case/amp.ctp, line 144 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 963 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 109
The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:
Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]Code Contextecho $this->Adsense->display('responsive_rect');}echo html_entity_decode($this->Wand->highlight($content[$i], $query));$viewFile = '/home/legalcrystal/app/View/Case/amp.ctp' $dataForView = array( 'title_for_layout' => 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ', 'desc' => array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p style="text-align: justify;">S. Murtaza Fazal Ali, J.</p><p style="text-align: justify;">1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p style="text-align: justify;">2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p style="text-align: justify;">3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p style="text-align: justify;">135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p style="text-align: justify;">(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 Section 111.</p><p style="text-align: justify;">4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p style="text-align: justify;">Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p style="text-align: justify;">These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p style="text-align: justify;">If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p style="text-align: justify;">5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p style="text-align: justify;">6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p style="text-align: justify;">In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p style="text-align: justify;">7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p style="text-align: justify;">8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p style="text-align: justify;">When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p style="text-align: justify;">It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p style="text-align: justify;">It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p style="text-align: justify;">Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p style="text-align: justify;">In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p style="text-align: justify;">It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p style="text-align: justify;">Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p style="text-align: justify;">Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p style="text-align: justify;">The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p style="text-align: justify;">The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p style="text-align: justify;">9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p style="text-align: justify;">10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p style="text-align: justify;">11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p style="text-align: justify;">12. For the reasons given above, the appeal fails and is accordingly dismissed.<p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ), 'casename_url' => 'shah-guman-mal-vs-state-andhra-pradesh', 'args' => array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) ) $title_for_layout = 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ' $desc = array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p>S. Murtaza Fazal Ali, J.</p><p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p>135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p>(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 Section 111.</p><p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p>Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p></p><p>', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ) $casename_url = 'shah-guman-mal-vs-state-andhra-pradesh' $args = array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) $url = 'https://sooperkanoon.com/case/amp/651373/shah-guman-mal-vs-state-andhra-pradesh' $ctype = '' $caseref = 'Balumal Jamnadas Batra v. State of Maharashtra<br>' $content = array( (int) 0 => '<p>S. Murtaza Fazal Ali, J.', (int) 1 => '<p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.', (int) 2 => '<p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.', (int) 3 => '<p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:', (int) 4 => '<p>135(1) Without prejudice to any action that may be taken under this Act, if any person-', (int) 5 => '<p>(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 Section 111.', (int) 6 => '<p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:', (int) 7 => '<p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. ', (int) 8 => '<p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:', (int) 9 => '<p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. ', (int) 10 => '<p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.', (int) 11 => '<p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:', (int) 12 => '<p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). ', (int) 13 => '<p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.', (int) 14 => '<p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:', (int) 15 => '<p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. ', (int) 16 => '<p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:', (int) 17 => '<p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. ', (int) 18 => '<p>Similarly, while dealing with the merits of the case, this Court made the following observations:', (int) 19 => '<p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.', (int) 20 => '<p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:', (int) 21 => '<p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.', (int) 22 => '<p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.', (int) 23 => '<p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:', (int) 24 => '<p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. ', (int) 25 => '<p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.', (int) 26 => '<p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', (int) 27 => '<p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.', (int) 28 => '<p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p>', (int) 29 => '<p>' ) $paragraphAfter = (int) 1 $cnt = (int) 30 $i = (int) 24include - APP/View/Case/amp.ctp, line 144 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 963 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 109
The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea.
Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]Code Contextecho $this->Adsense->display('responsive_rect');}echo html_entity_decode($this->Wand->highlight($content[$i], $query));$viewFile = '/home/legalcrystal/app/View/Case/amp.ctp' $dataForView = array( 'title_for_layout' => 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ', 'desc' => array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p style="text-align: justify;">S. Murtaza Fazal Ali, J.</p><p style="text-align: justify;">1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p style="text-align: justify;">2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p style="text-align: justify;">3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p style="text-align: justify;">135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p style="text-align: justify;">(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 Section 111.</p><p style="text-align: justify;">4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p style="text-align: justify;">Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p style="text-align: justify;">These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p style="text-align: justify;">If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p style="text-align: justify;">5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p style="text-align: justify;">6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p style="text-align: justify;">In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p style="text-align: justify;">7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p style="text-align: justify;">8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p style="text-align: justify;">When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p style="text-align: justify;">It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p style="text-align: justify;">It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p style="text-align: justify;">Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p style="text-align: justify;">In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p style="text-align: justify;">It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p style="text-align: justify;">Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p style="text-align: justify;">Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p style="text-align: justify;">The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p style="text-align: justify;">The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p style="text-align: justify;">9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p style="text-align: justify;">10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p style="text-align: justify;">11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p style="text-align: justify;">12. For the reasons given above, the appeal fails and is accordingly dismissed.<p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ), 'casename_url' => 'shah-guman-mal-vs-state-andhra-pradesh', 'args' => array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) ) $title_for_layout = 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ' $desc = array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p>S. Murtaza Fazal Ali, J.</p><p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p>135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p>(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 Section 111.</p><p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p>Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p></p><p>', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ) $casename_url = 'shah-guman-mal-vs-state-andhra-pradesh' $args = array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) $url = 'https://sooperkanoon.com/case/amp/651373/shah-guman-mal-vs-state-andhra-pradesh' $ctype = '' $caseref = 'Balumal Jamnadas Batra v. State of Maharashtra<br>' $content = array( (int) 0 => '<p>S. Murtaza Fazal Ali, J.', (int) 1 => '<p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.', (int) 2 => '<p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.', (int) 3 => '<p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:', (int) 4 => '<p>135(1) Without prejudice to any action that may be taken under this Act, if any person-', (int) 5 => '<p>(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 Section 111.', (int) 6 => '<p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:', (int) 7 => '<p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. ', (int) 8 => '<p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:', (int) 9 => '<p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. ', (int) 10 => '<p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.', (int) 11 => '<p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:', (int) 12 => '<p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). ', (int) 13 => '<p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.', (int) 14 => '<p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:', (int) 15 => '<p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. ', (int) 16 => '<p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:', (int) 17 => '<p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. ', (int) 18 => '<p>Similarly, while dealing with the merits of the case, this Court made the following observations:', (int) 19 => '<p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.', (int) 20 => '<p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:', (int) 21 => '<p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.', (int) 22 => '<p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.', (int) 23 => '<p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:', (int) 24 => '<p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. ', (int) 25 => '<p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.', (int) 26 => '<p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', (int) 27 => '<p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.', (int) 28 => '<p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p>', (int) 29 => '<p>' ) $paragraphAfter = (int) 1 $cnt = (int) 30 $i = (int) 25include - APP/View/Case/amp.ctp, line 144 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 963 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 109
9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.
Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]Code Contextecho $this->Adsense->display('responsive_rect');}echo html_entity_decode($this->Wand->highlight($content[$i], $query));$viewFile = '/home/legalcrystal/app/View/Case/amp.ctp' $dataForView = array( 'title_for_layout' => 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ', 'desc' => array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p style="text-align: justify;">S. Murtaza Fazal Ali, J.</p><p style="text-align: justify;">1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p style="text-align: justify;">2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p style="text-align: justify;">3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p style="text-align: justify;">135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p style="text-align: justify;">(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 Section 111.</p><p style="text-align: justify;">4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p style="text-align: justify;">Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p style="text-align: justify;">These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p style="text-align: justify;">If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p style="text-align: justify;">5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p style="text-align: justify;">6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p style="text-align: justify;">In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p style="text-align: justify;">7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p style="text-align: justify;">8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p style="text-align: justify;">When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p style="text-align: justify;">It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p style="text-align: justify;">It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p style="text-align: justify;">Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p style="text-align: justify;">In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p style="text-align: justify;">It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p style="text-align: justify;">Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p style="text-align: justify;">Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p style="text-align: justify;">The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p style="text-align: justify;">The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p style="text-align: justify;">9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p style="text-align: justify;">10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p style="text-align: justify;">11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p style="text-align: justify;">12. For the reasons given above, the appeal fails and is accordingly dismissed.<p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ), 'casename_url' => 'shah-guman-mal-vs-state-andhra-pradesh', 'args' => array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) ) $title_for_layout = 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ' $desc = array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p>S. Murtaza Fazal Ali, J.</p><p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p>135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p>(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 Section 111.</p><p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p>Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p></p><p>', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ) $casename_url = 'shah-guman-mal-vs-state-andhra-pradesh' $args = array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) $url = 'https://sooperkanoon.com/case/amp/651373/shah-guman-mal-vs-state-andhra-pradesh' $ctype = '' $caseref = 'Balumal Jamnadas Batra v. State of Maharashtra<br>' $content = array( (int) 0 => '<p>S. Murtaza Fazal Ali, J.', (int) 1 => '<p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.', (int) 2 => '<p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.', (int) 3 => '<p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:', (int) 4 => '<p>135(1) Without prejudice to any action that may be taken under this Act, if any person-', (int) 5 => '<p>(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 Section 111.', (int) 6 => '<p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:', (int) 7 => '<p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. ', (int) 8 => '<p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:', (int) 9 => '<p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. ', (int) 10 => '<p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.', (int) 11 => '<p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:', (int) 12 => '<p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). ', (int) 13 => '<p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.', (int) 14 => '<p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:', (int) 15 => '<p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. ', (int) 16 => '<p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:', (int) 17 => '<p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. ', (int) 18 => '<p>Similarly, while dealing with the merits of the case, this Court made the following observations:', (int) 19 => '<p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.', (int) 20 => '<p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:', (int) 21 => '<p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.', (int) 22 => '<p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.', (int) 23 => '<p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:', (int) 24 => '<p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. ', (int) 25 => '<p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.', (int) 26 => '<p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', (int) 27 => '<p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.', (int) 28 => '<p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p>', (int) 29 => '<p>' ) $paragraphAfter = (int) 1 $cnt = (int) 30 $i = (int) 26include - APP/View/Case/amp.ctp, line 144 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 963 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 109
10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.
Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]Code Contextecho $this->Adsense->display('responsive_rect');}echo html_entity_decode($this->Wand->highlight($content[$i], $query));$viewFile = '/home/legalcrystal/app/View/Case/amp.ctp' $dataForView = array( 'title_for_layout' => 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ', 'desc' => array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p style="text-align: justify;">S. Murtaza Fazal Ali, J.</p><p style="text-align: justify;">1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p style="text-align: justify;">2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p style="text-align: justify;">3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p style="text-align: justify;">135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p style="text-align: justify;">(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 Section 111.</p><p style="text-align: justify;">4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p style="text-align: justify;">Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p style="text-align: justify;">These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p style="text-align: justify;">If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p style="text-align: justify;">5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p style="text-align: justify;">6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p style="text-align: justify;">In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p style="text-align: justify;">7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p style="text-align: justify;">8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p style="text-align: justify;">When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p style="text-align: justify;">It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p style="text-align: justify;">It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p style="text-align: justify;">Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p style="text-align: justify;">In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p style="text-align: justify;">It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p style="text-align: justify;">Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p style="text-align: justify;">Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p style="text-align: justify;">The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p style="text-align: justify;">The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p style="text-align: justify;">9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p style="text-align: justify;">10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p style="text-align: justify;">11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p style="text-align: justify;">12. For the reasons given above, the appeal fails and is accordingly dismissed.<p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ), 'casename_url' => 'shah-guman-mal-vs-state-andhra-pradesh', 'args' => array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) ) $title_for_layout = 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ' $desc = array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p>S. Murtaza Fazal Ali, J.</p><p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p>135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p>(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 Section 111.</p><p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p>Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p></p><p>', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ) $casename_url = 'shah-guman-mal-vs-state-andhra-pradesh' $args = array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) $url = 'https://sooperkanoon.com/case/amp/651373/shah-guman-mal-vs-state-andhra-pradesh' $ctype = '' $caseref = 'Balumal Jamnadas Batra v. State of Maharashtra<br>' $content = array( (int) 0 => '<p>S. Murtaza Fazal Ali, J.', (int) 1 => '<p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.', (int) 2 => '<p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.', (int) 3 => '<p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:', (int) 4 => '<p>135(1) Without prejudice to any action that may be taken under this Act, if any person-', (int) 5 => '<p>(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 Section 111.', (int) 6 => '<p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:', (int) 7 => '<p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. ', (int) 8 => '<p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:', (int) 9 => '<p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. ', (int) 10 => '<p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.', (int) 11 => '<p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:', (int) 12 => '<p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). ', (int) 13 => '<p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.', (int) 14 => '<p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:', (int) 15 => '<p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. ', (int) 16 => '<p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:', (int) 17 => '<p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. ', (int) 18 => '<p>Similarly, while dealing with the merits of the case, this Court made the following observations:', (int) 19 => '<p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.', (int) 20 => '<p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:', (int) 21 => '<p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.', (int) 22 => '<p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.', (int) 23 => '<p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:', (int) 24 => '<p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. ', (int) 25 => '<p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.', (int) 26 => '<p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', (int) 27 => '<p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.', (int) 28 => '<p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p>', (int) 29 => '<p>' ) $paragraphAfter = (int) 1 $cnt = (int) 30 $i = (int) 27include - APP/View/Case/amp.ctp, line 144 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 963 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 109
11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.
Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]Code Contextecho $this->Adsense->display('responsive_rect');}echo html_entity_decode($this->Wand->highlight($content[$i], $query));$viewFile = '/home/legalcrystal/app/View/Case/amp.ctp' $dataForView = array( 'title_for_layout' => 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ', 'desc' => array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p style="text-align: justify;">S. Murtaza Fazal Ali, J.</p><p style="text-align: justify;">1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p style="text-align: justify;">2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p style="text-align: justify;">3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p style="text-align: justify;">135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p style="text-align: justify;">(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 Section 111.</p><p style="text-align: justify;">4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p style="text-align: justify;">Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p style="text-align: justify;">These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p style="text-align: justify;">If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p style="text-align: justify;">5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p style="text-align: justify;">6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p style="text-align: justify;">In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p style="text-align: justify;">7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p style="text-align: justify;">8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p style="text-align: justify;">When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p style="text-align: justify;">It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p style="text-align: justify;">It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p style="text-align: justify;">Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p style="text-align: justify;">In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p style="text-align: justify;">It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p style="text-align: justify;">Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p style="text-align: justify;">Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p style="text-align: justify;">The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p style="text-align: justify;">The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p style="text-align: justify;">9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p style="text-align: justify;">10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p style="text-align: justify;">11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p style="text-align: justify;">12. For the reasons given above, the appeal fails and is accordingly dismissed.<p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ), 'casename_url' => 'shah-guman-mal-vs-state-andhra-pradesh', 'args' => array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) ) $title_for_layout = 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ' $desc = array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p>S. Murtaza Fazal Ali, J.</p><p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p>135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p>(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 Section 111.</p><p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p>Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p></p><p>', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ) $casename_url = 'shah-guman-mal-vs-state-andhra-pradesh' $args = array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) $url = 'https://sooperkanoon.com/case/amp/651373/shah-guman-mal-vs-state-andhra-pradesh' $ctype = '' $caseref = 'Balumal Jamnadas Batra v. State of Maharashtra<br>' $content = array( (int) 0 => '<p>S. Murtaza Fazal Ali, J.', (int) 1 => '<p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.', (int) 2 => '<p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.', (int) 3 => '<p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:', (int) 4 => '<p>135(1) Without prejudice to any action that may be taken under this Act, if any person-', (int) 5 => '<p>(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 Section 111.', (int) 6 => '<p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:', (int) 7 => '<p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. ', (int) 8 => '<p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:', (int) 9 => '<p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. ', (int) 10 => '<p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.', (int) 11 => '<p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:', (int) 12 => '<p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). ', (int) 13 => '<p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.', (int) 14 => '<p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:', (int) 15 => '<p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. ', (int) 16 => '<p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:', (int) 17 => '<p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. ', (int) 18 => '<p>Similarly, while dealing with the merits of the case, this Court made the following observations:', (int) 19 => '<p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.', (int) 20 => '<p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:', (int) 21 => '<p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.', (int) 22 => '<p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.', (int) 23 => '<p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:', (int) 24 => '<p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. ', (int) 25 => '<p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.', (int) 26 => '<p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', (int) 27 => '<p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.', (int) 28 => '<p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p>', (int) 29 => '<p>' ) $paragraphAfter = (int) 1 $cnt = (int) 30 $i = (int) 28include - APP/View/Case/amp.ctp, line 144 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 963 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 109
12. For the reasons given above, the appeal fails and is accordingly dismissed.
Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]Code Contextecho $this->Adsense->display('responsive_rect');}echo html_entity_decode($this->Wand->highlight($content[$i], $query));$viewFile = '/home/legalcrystal/app/View/Case/amp.ctp' $dataForView = array( 'title_for_layout' => 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ', 'desc' => array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p style="text-align: justify;">S. Murtaza Fazal Ali, J.</p><p style="text-align: justify;">1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p style="text-align: justify;">2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p style="text-align: justify;">3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p style="text-align: justify;">135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p style="text-align: justify;">(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 Section 111.</p><p style="text-align: justify;">4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p style="text-align: justify;">Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p style="text-align: justify;">These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p style="text-align: justify;">If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p style="text-align: justify;">5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p style="text-align: justify;">6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p style="text-align: justify;">In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p style="text-align: justify;">7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p style="text-align: justify;">8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p style="text-align: justify;">When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p style="text-align: justify;">It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p style="text-align: justify;">It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p style="text-align: justify;">Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p style="text-align: justify;">In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p style="text-align: justify;">It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p style="text-align: justify;">Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p style="text-align: justify;">Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p style="text-align: justify;">The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p style="text-align: justify;">The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p style="text-align: justify;">9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p style="text-align: justify;">10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p style="text-align: justify;">11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p style="text-align: justify;">12. For the reasons given above, the appeal fails and is accordingly dismissed.<p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ), 'casename_url' => 'shah-guman-mal-vs-state-andhra-pradesh', 'args' => array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) ) $title_for_layout = 'Shah Guman Mal Vs State of Andhra Pradesh - Citation 651373 - Court Judgment | ' $desc = array( 'Judgement' => array( 'id' => '651373', 'acts' => '<a href="/act/51922/customs-act-1962-complete-act">Customs Act, 1962</a> - Sections 111, 123 and 135(1); Evidence Act - Sections 106 and 114', 'appealno' => 'Criminal Appeal No. 47 of 1974', 'appellant' => 'Shah Guman Mal', 'authreffered' => '', 'casename' => 'Shah Guman Mal Vs. State of Andhra Pradesh', 'casenote' => 'Customs - smuggled goods - Sections 111, 123, and 135 (1) of Customs Act, 1962, Sections 8 and 85 of Gold Control Act, 1968 and Sections 106 and 114 of Indian Evidence Act, 1872 - appellant was convicted and sentenced for offence under Section 135 (1) (b) (II) of Act of 1962 and Section 85 (II) read with Section 8 (1) of Act of 1968 - appellants were in possession of gold with foreign markings which was kept in secret chamber of safe in his house - appellant admitted that gold bars were brought from outside country and were given to him by someone - prosecution entitled to claim benefit of presumption under Sections 106 and 114 of Act of 1882 - prosecution held to have clearly proved charge under Section 135 (1) (b) (ii) of Act of 1962. - [A.N. Ray, C.J.,; H.R. Khanna,; K.K. Mathew,; M.H. Beg and; Y.V. Chandrachud, JJ.] Consequent upon the declaration of the invalidity of the Assam Taxation (in goods carried by Road or on Inland Waterways) Act, 1954, by the Supreme Court in Atiabari Tea Co. Ltd. v. The State of Assam and Ors. [1961] 1 S.C.R. 806, on the ground that prior sanction of the President was not taken, the Assam Legislature passed on April 6, 1961, the Assam Taxation (on goods carried by Road or on Inland Waterways) Act, 1961. This Act was to remain in force with retrospective effect from 24 April, 1954, upto 1 March, 1962. The respondents challenged the validity of the Act before the High Court of Assam in writ petitions and they applied for injunction restraining the appellants from taking any proceedings under the Act. Interim orders of injunction were passed on various dates. The appellants opposed the interim orders of injunction. A common order was passed by the Court on 18-9-1961 making the orders absolute and restraining the appellants from taking any proceedings under the Act, The order staving proceedings continued till the new Act was held ultra vires the Constitution by the High Court. On August 1, 1963, he High Court held the new Act to be ultra vires. On the same day the High Court granted certificate of fitness to appeal to this Court. On December 13, 1963, this Court in Khyeberi Tea Co. Ltd. & Anr v. The State of Assam, [1964] 5 S.C.R. 975, held the Act of 1961 to be valid. On the strength of the certificate granted by the High Court, the State of Assam filed an appeal in this Court on March 4, 1964. On October 28, 1964, this Court granted interim stay of the operation of the judgment of the High Court. On January 29, 1965, the interim stay granted by this Court was made absolute. On April 1, 1968, this Court accepted the appeals filed by the State. The first sub-section of section 7 requires every producer and dealer to furnish returns of manufactured tea carried in tea containers and jute carried in bales in such forms and to such authority as may be prescribed. The second sub- section states that in case of any producer or dealer who, in the opinion of the Commissioner, is liable to pay tax for any return period' or a part thereof, the Commissioner may serve within two years of the expiry of the aforesaid period, a notice in the prescribed form requiring him to furnish a return of goods carried and such producer or dealer shall thereupon furnish the return within the date and to the authority mentioned in the notice. Sub-section (2) of section 9 states that if the Commissioner is not satisfied that a return furnished under section 7 is correct and complete he shall serve on the producer or dealer a notice requiring him, on the date and hour and place mentioned therein, either to attend in person or to produce or cause to be produced any evidence on which he may rely in support of his return. Sub-section (4) states that if a producer or dealer fails to make a return as required by section 7 or having made the return, fails to comply with the terms of the notice issued under sub-section (2) of s. 9, the Commissioner shall, by an order in writing, assess to the best of his judgment the producer or dealer and determine the tax payable by him on the basis of such assessment. It is provided that before making assessment the commissioner may allow the producer or dealer such further time as he thinks fit to make the return or to comply with the terms of he notice issued under sub-section (2) of section 9. It is only after the State obtained interim order from this Court that notices were issued by the Superintendent of Taxes to the respondents for filing the returns for the- quarters mentioned in the writ petitions. The respondents- assessees challenged these demand notices in the High Court on the ground that the notices were illegal and beyond the jurisdiction of the State. The broad contention of the assessees was that the State could issue notices within two years from the expiry of the return period and none of the notices was within the time mentioned in the New Act, and therefore, the State had no jurisdiction to issue the notices. The State, on the other hand, contended that from 10 August, 1961 to 1 August, 1963 there was an order of the High Court staying all proceedings, and, therefore, it was not possible to issue any notice until the State was permitted by orders of this Court to commence proceedings. The High Court accepted the contention of the assessees. The High Court held that the notices were barred by limitation in terms of the provisions contained in s. 7(2) of the New Act. Each of the challenged notices was much beyond the date of expiry of two years from the date when return should have been filed. These appeals have been filed after obtaining special leave from this Court. Dismissing the appeals, HELD : Per A. N. Ray, C. J. and Y. V. Chandrachud, J. (i) The State cannot contend that it was impossible, to issue any notice within the period mentioned in s. 7(2) of the New Act. The State did not endeavor to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in S. 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of. the enemy of the State or a general strike. [374 B-D] (ii) If a return under s. 7(1) is not made, the service of a notice under s. 7(2) of the Act is the only method for initiation of valid assessment proceedings under the Act. The period of two years under s. 7(2) of the New Act is a fetter on the power of the authority and is not just a bar of time. No assessment can be legally made under s. 9(4) of the New Act without service of a notice under s. 7(2) of the New Act within two years in case where the assessee has not submitted any return under s. 7(1) of the New Act. [375-AB] The words "if a producer or dealer fails to make a return as required by s. 7" occurring in s. 9 of the New Act make it clear that s. 9 can come into operation only when there is a failure to Comply with the requirements of s. 7 and not the requirements only under sub-s. (1). Reference can be made to s. 11 of the New Act. Section 11 deals with escaped assessment. There is a time limit for initiating an escaped assessment under s. 11 of the New Act. The time limit is two years from the end of the return period. It is the scheme of the Act that the service of notice within two years of the return period is an imperative requirement for initiation of assessment proceeding as also reassessment proceeding under the Act. [375-CD] State of Assam & Anr. v. D. C. Chouadhuri & Ors., [1970] 1 S.C.R. 780, discussed. (iii) In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction does not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act relates to the exercise of jurisdiction under the Act in all cases. [378 D-F] The respondents were entitled to impeach the statute under which they were made liable. The, respondents have done no wrong. The respondents are not taking any advantage of any act of theirs. The State was entitled to resist the respondents. The State did so by contending that the Act was valid, but the State took no steps during the pendency of the litigation to take directions from the Court to serve notices of demand upon the respondents to keep alive the right of the appellants. [379 B-C] Dawson's Bank Limited v. Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100; Vellayan Chettiar v. Province of Madras 74-I.A. 223; Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquary) Ltd./1971/A.C. 850; William Shepard, v. O.E.D. Barron, 194 U.S. 553-48 L. Ed. 1115 and Re : Hallett's Estate Knatchbull v. Hallett 13 Ch. D. 696 at page 727, referred to. Per- M. H. Beg J, (Concurring) The waiver, even where both sides have agreed to waive the operation of a statutory provision, cannot extend to a case in which the effect may be either to oust the jurisdiction conferred by statute or to confer a jurisdiction, which according to the statute is not there. In other words, if a notice under s. 7(2) of the Act is a condition precedent to the exercise of jurisdiction to make the best judgment assessment, it cannot be said that the doctrine of waiver will confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. On the language of s. 11 of the Act, it is evident that in every case where tea or jute chargeable to tax escaped assessment for any period or has been under-asmssed the Commissioner must take action within two years of the ,expiry of the return period. It is this part of the Act which win operate as a bar to the jurisdiction of the Commissioner to tax any escaped assessment beyond two years of the return period. Therefore quite apart from the question whether on the mere language of s. 7(2) and s. 9(4), a failure to issue a notice under s. 7(2) of the Act within the period constitutes a bar to proceedings under s. 9(4) of the Act, it cannot be said that a failure to issue such notice would not become a bar due to the clear provisions of s. 1 1 of the Act. This bar, at any rate, is against the exercise of jurisdiction to assess beyond the prescribed period. [389 E-F,392 E-G] Cape Brandy Syndicate v.I.R.C. [1921] 1 K.B. 66, 71 and State of Assam Anr. v. D. C. Chouadhuri &Ors. [1970] 1 S.C.R. 780, referred to. (Per K. K. Mathew and H. R. Khana, JJ. dissenting.) (i) The respondents obtained the orders of injunction from the Court which the Court would not have issued, had the Court known at the time that the Act was intra vires the powers of the legislature as it ultimately turned out to be by the decision of this Court. The Court issued orders of injunction on the has is of its view that the respondents has a prima facie case; but when ultimately this Court declared that the Act was valid, justice requires that the respondents should not be allowed to set up the contention that they were entitled to get the notices within the period during which the judgment of the High Court declaring the Act ultra vires remained in operation. In other words, the respondents, after having successfully prevented the Commissioner from issuing notices by virtue of the orders of injunction obtained by them from the High Court, should not be heard to say that they were entitled to notices as they themselves made it impossible for the Commissioner to issue the notices within the period by obtaining the orders of injunction. [382 G-H] (ii) Even assuming that the provision for issue of notice within the period specified in s. 7(2) was mandatory and was a condition precedent for the liability to file the returns, the respondents could have waived the benefit of it and, in fact, they did waive it by their conduct. That apart, the principle of restitution requires that the party prejudiced by a wrong order of the Court should be put in the position which he or it would have occupied had the wrong order not been passed. [383-H] (iii) It was the orders of injunction and the order declaring the Act as ultra vires which made it impossible for the Commissioner to issue the notices within the period specified in s. 7(2).The respondents were bound to file the returns even though the notices were not issued to them within the period specified in s. 7(2). The liability to file the return was created by s. 7(1) and as the requirement of notice within the period specified in s. 7(2) could not have been insisted upon by the respondents, the authority empowered to make the assessment under s. 9(4) was competent to do so. [386 GH, 387 H, 388 A] Vallayan Chettiar v. Province of Madras, A.I.R. 1947 P.C. 197; Graham. v. Ingleby [1948] 1 Exch 651, 655-56; Kammins Co. v. Zenith Investments (H.L. (E) [1971] A.C. 850; Graine v. Colonial Mutual Fire Insurance Co. Ltd. [1920] 28 C.L.R. 305 at p. 327 and Corporation of Toronto v. Russell [1908] A.C. 493, referred to. - The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. , any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). 7. The facts of this case are, however, clearly distinguishable from those of the present case. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. Messrs Best and Co. When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. ..All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', 'caseanalysis' => null, 'casesref' => 'Balumal Jamnadas Batra v. State of Maharashtra;', 'citingcases' => '', 'counselplain' => ' R.S. Chitale and; Vineet Kumar, Advs', 'counseldef' => ' M.A. Kheder and ; Venkarao, Advs.', 'court' => 'Supreme Court of India', 'court_type' => 'SC', 'decidedon' => '1980-02-06', 'deposition' => '', 'favorof' => null, 'findings' => null, 'judge' => ' A.D. Koshal and; S. Murtaza Fazal Ali, JJ.', 'judgement' => '<p>S. Murtaza Fazal Ali, J.</p><p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.</p><p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.</p><p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:</p><p>135(1) Without prejudice to any action that may be taken under this Act, if any person-</p><p>(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 Section 111.</p><p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:</p><p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. </p><p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:</p><p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. </p><p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.</p><p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:</p><p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). </p><p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.</p><p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:</p><p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. </p><p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:</p><p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. </p><p>Similarly, while dealing with the merits of the case, this Court made the following observations:</p><p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.</p><p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:</p><p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.</p><p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.</p><p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:</p><p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. </p><p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.</p><p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.</p><p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.</p><p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p></p><p>', 'observations' => null, 'overruledby' => null, 'prhistory' => 'Appeal by Special Leave from the Judgment and Order dated August 18, 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 648/72 and Criminal Revision Petition No. 332 of 1972--', 'pubs' => 'AIR1980SC793; 1980CriLJ557; 1983(13)ELT1631(SC); (1980)2SCC262; [1980]2SCR1005', 'ratiodecidendi' => '', 'respondent' => 'State of Andhra Pradesh', 'sub' => 'Customs', 'link' => null, 'circuit' => null ) ) $casename_url = 'shah-guman-mal-vs-state-andhra-pradesh' $args = array( (int) 0 => '651373', (int) 1 => 'shah-guman-mal-vs-state-andhra-pradesh' ) $url = 'https://sooperkanoon.com/case/amp/651373/shah-guman-mal-vs-state-andhra-pradesh' $ctype = '' $caseref = 'Balumal Jamnadas Batra v. State of Maharashtra<br>' $content = array( (int) 0 => '<p>S. Murtaza Fazal Ali, J.', (int) 1 => '<p>1. This appeal by special leave is directed against a judgment dated August 18, 1973 of the Andhra Pradesh High Court. The facts of the case have been detailed in the judgment of the High Court and it is not necessary to repeat them all over again. The appellant was tried by the Magistrate for offences under Section 135(1)(b)(ii) of the <a>Customs Act, 1962</a> and Section (ii) read with Section 8(i) of the Gold Control Act, and sentenced to rigorous imprisonment for nine months under each count. Both the sentences were directed to run concurrently. Sentences of fine were also imposed. The Sessions Judge, on appeal, set aside the conviction and sentence under the Gold Control Act and acquitted the appellant of that charge for the reason that the requisite sanction for his prosecution was not accorded, but maintained the conviction and sentence of the appellant under Section 135(1)(b)(ii) of the Customs Act. Thereafter, the appellant went up in revision to the High Court, which confirmed the conviction and sentence upheld by the Sessions Judge. Then the appellant moved this Court and this appeal is by special leave.', (int) 2 => '<p>2. The allegations made against the appellant may be briefly stated. On 16-4-1971 P.W. 4, Superintendent of Central Excise issued a warrant (Ext. P-3) authorising P.W. 3 and another Inspector to proceed to the house of the appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one Nihalchand as mediators and informed them that the accused had concealed gold biscuits of foreign origin in his house and hence it was decided to search his house. When the search was conducted, the accused was directed to produce the gold biscuits of foreign origin in his possession. The accused denied that he possessed any but the Excise officials searched the house and found in a secret chamber of an iron safe, which was opened by the accused with the keys in his possession, a bundle containing 28 gold biscuits and a half biscuit marked as M. Os. 1-29. All these biscuits bore foreign markings. In another secret chamber were found gold earrings in plastic boxes and a bundle of currency notes. The accused was then questioned in the presence of the witnesses and he stated that he had been receiving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext. P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no seizure was made in accordance with the provisions of the Customs Act, the presumption under Section 123 thereof was not available to the prosecution.', (int) 3 => '<p>3. Section 135(1)(b), under which the appellant has been convicted, runs thus:', (int) 4 => '<p>135(1) Without prejudice to any action that may be taken under this Act, if any person-', (int) 5 => '<p>(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 Section 111.', (int) 6 => '<p>4. Analysing the essential ingredients of Clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any way concerned in depositing, keeping, etc., any goods which he knows or has reason to believe are liable to confiscation under Section 111. Thus in the instant case, as no presumption under Section 123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of Section 111. Dr. Chitale, appearing for the appellant, contended that if the presumption under Section 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit. Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Section 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay 0065/1954 : 1955CriLJ215 where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows:', (int) 7 => '<p>Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King A.I.R.1936 P.C. 169 also In re: Kanakasabai Pillai- : AIR1940Mad1 . It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by Section 106 of the Evidence Act. ', (int) 8 => '<p>These observations were made with respect to the peculiar facts of that case. It appears that what had happened in that case was that the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the contravention of the provisions of the Prohibition Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his knowledge) could not relieve the prosecution of the burden of proving that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of Section 106 of the Evidence Act would not apply to the facts of the present case. In the case of Issardas Daulat Ram and Ors. v. The Union of India and Ors. : [1962]1SCR358 this Court, after discussing the admitted circumstances of the case, found that the relevant pieces of evidence would prove the guilty knowledge of the accused. That was a case Which arose under Section 178(A) of the Sea Customs Act and this Court observed as follows:', (int) 9 => '<p>If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants.... These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in paragraph 6 we have set out earlier. ', (int) 10 => '<p>5. The facts of the present case appear to us to be almost on all fours with the facts of the case mentioned above. Here, also, the facts are that gold with foreign marking in the shape of biscuits without indicating any change was recovered from the possession of the appellant. Secondly, the appellant admitted that the gold was brought from outside the country. The appellant further admitted that he did not hold any permit for importing the gold and the plea taken by him was that some unknown person had delivered the gold to him. In view of these circumstances and the fact as to how the accused came into possession of the gold and whether it was imported or not being within the special knowledge of the accused, if he failed to disclose the identity of the person who gave him the gold, then it was open to the Court to presume under Section 106 and 114 of the Evidence Act that the appellant knew that the gold in his possession was smuggled and imported without permit.', (int) 11 => '<p>6. In The State of Punjab v. Gian Chand and Ors. (Criminal Appeal No. 195 of 1962 disposed of on 2-4-1968), while examining the validity of conviction and sentence under Section 167(81) of the Sea Customs Act, 1878, this Court held that as the accused did not claim any ownership over the gold and was a bullion merchant, the mere fact that the gold had foreign markings would not be sufficient to prove that the accused had knowledge that the gold was smuggled. In this connection, this Court observed as follows:', (int) 12 => '<p>In our view, the High Court was right in its conclusion because the fact that none of the respondents claimed ownership over the said gold could not necessarily mean either that the gold was smuggled gold or that the respondents were in possession thereof with the knowledge that it was so. The fact that the gold has foreign marks stamped on it can only mean that the gold was foreign. But since such foreign gold used to be imported before the present restrictions were imposed on its importation, it could have been imported without any violation of law. Consequently, that fact alone would not establish either of the two ingredients of Section 167(81). ', (int) 13 => '<p>7. The facts of this case are, however, clearly distinguishable from those of the present case. In the first place, in the case mentioned above, the accused was a bullion merchant and it was in the very nature of circumstances and as a part of his profession, natural for him to be in possession of gold. Secondly, the Court clearly held that during those days foreign gold used to be freely imported in our country and therefore the mere presence of foreign markings would not be sufficient to raise a presumption under Section 106 of the Evidence Act so as to attribute knowledge to the accused that the gold was smuggled. In the instant case, the facts are quite different and so is the nature of the admission made by the appellant.', (int) 14 => '<p>8. In a later decision of this Court in the case of Commissioner of Income Tax, Madras v. Messrs Best and Co. : [1966]60ITR11(SC) this Court observed as follows:', (int) 15 => '<p>When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. ', (int) 16 => '<p>It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormull : 1975CriLJ545 a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:', (int) 17 => '<p>It cannot be disputed that in proceeding for imposing penalties under Clause (8) of Section 167 to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrarary. But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree.... All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the probabilities of the case. ', (int) 18 => '<p>Similarly, while dealing with the merits of the case, this Court made the following observations:', (int) 19 => '<p>In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector.... The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods by disclosing facts within his special knowledge.', (int) 20 => '<p>It was also pointed out that the broad effect of the application of the basic principles underlying Section 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v. The State of Maharashtra : 1975CriLJ545 while this Court was again considering the extent and application of Section 106 and 114 of the Evidence Act and in this connection, observed as follows:', (int) 21 => '<p>Even if we were to apply the ratio decidendi of Gian Chand's case : 1975CriLJ246 in the case before us, we find that the result would only be that no presumption under Section 123 of the Act could be used against the appellant. We do not think that the High Court or the Magistrate had used this presumption. We find that they had relied upon circumstantial evidence in the case to infer the character of the gold recovered and the accused's guilty knowledge.... A reference to Issardas Daulat Ram and Ors. v. Union of India and Ors. : [1962]1SCR358 is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession.', (int) 22 => '<p>Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under Section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under Section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by Section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried.', (int) 23 => '<p>The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra : 1975CriLJ1862 was also a case under the Customs Act and there also the presumption under Section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, this Court observed as follows:', (int) 24 => '<p>The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country. The inscriptions on them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. ', (int) 25 => '<p>9. From the aforesaid case also it would appear that this Court was prepared to draw a presumption against the accused from the fact that the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given by the accused.', (int) 26 => '<p>10. While it is, therefore, true that in the instant case the seizure was not made under Section 111 of the Customs Act and the prosecution could not press into service the presumption arising from Section 123 of the Customs Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose. Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting under special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under Section 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under Section 135(1)(b)(ii) of the Customs Act.', (int) 27 => '<p>11. It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.', (int) 28 => '<p>12. For the reasons given above, the appeal fails and is accordingly dismissed.<p>', (int) 29 => '<p>' ) $paragraphAfter = (int) 1 $cnt = (int) 30 $i = (int) 29include - APP/View/Case/amp.ctp, line 144 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 963 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 109