GOPALDAS UDHAVDAS AHUJA AND ANR. versus UNION OF INDIA AND ORS.

Citation: [2004] SUPP. 2 S.C.R. 942 · Decided: 06-07-2004 · Supreme Court of India · Bench: RUMA PAL · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
GOPALDAS UDHAVDAS AHUJA AND ANR. 
v 
UNION OF INDIA AND ORS. 
JULY 6, 2004 
B 
(RUMA PAL AND S.H. KAPADIA. JJ.] 
Gold (Control) Act, 1968 : 
Sections 7 l (1), 71 (I) proviso and section 7 4--Possession of gold in 
C contravention of the Act-Confiscation order-Sustainability of-Held : 
D 
Gold \l'US luwfully seized but conscious possession of gold by possessor not 
estublished-Hence, possessor entitled to benefit of proviso to section 
71 ( l )---Confiscation order and levy o,f penalty thus not sustainable and set 
aside. 
Sections 64(b), 66 and 105--Search and seizure of primary gold by 
Income Tax Authorities--Taking over of seized gold by Gold Control 
Ofjicer--Legality and validity of-Held: Sections 64(b) and 105 empower 
the Gold Control Officer to call upon Income Tax Officer to produce sei::ed 
E gold before him for taking action---Circulur of CBDT that Income Tax 
Officer to give necessary information to Gold Control Officer on seizure-
Also power of seizure under 1968 Act and 1961 Act different-Further, 
when gold was seized by Gold Comrol Officer he had reason to believe 
that the provisions of Act had been contravened-Hence, take over of 
F primary gold by Gold Control Officer law/id seizure-Income Tax Act, 
1961-Section 132(2). 
Sections 71(1) and 85 read with Sections 8(1) and 98B-Possession 
of gold in contravention of the Act--Confiscation of primary gold under 
Section 7 l ( l) and prosecution for illegal possession under Section 85(1)-
G Possession--Nature of---Held : Possession ipso facto is prohibited-
Mens rea, in the sense of knowledge of possession of unauthorised articles 
is essential ingredient of offence-Hence, possession is conscious 
possession-In absence, possessor to prove beyond reasonable doubt that 
he had no knowledge of possession cf unauthorised articles under proviso 
H to section 71 in case of confiscation and under section 98B in case of 
942 
• 
G.U. AHUJA v. U.O.l. 
943 
prosecution. 
A 
Sections 71(1), 85(1J(ii) read with 8(1)-Confiscation of primary 
gold under Section 71 (}) and prosecution for illegal possession under 
Sectio1185( 1 )-Recove1y of incriminating articles being the same-Acquittal 
order in prosecution proceedings-Effect of, on confiscation order-Held: B 
Confiscation proceedings are separate and independent of prosecution 
proceedings-Mere acquittal does not result in nullifj;ing confiscatio11 
order-However, ll'hen possessor proved beyond reasonable doubt that he 
had no knowledge of possession of gold under section 98B, confiscation 
proceedings cannot stand against acquittal-Section 98B. 
Sections 71 {I), 74 and 85-Voluntary Disclosure of Income and 
Wealth Ordinance, 1975-Conjiscation of gold, levy of penalty and 
prosecution-Immunity ji-om under the Ordinance-Claim of-Held : 
c 
Under the Ordinance declarant is entitled to claim immunity if before 
marking the declaration the gold was not seized and no proceeding was D 
pending before any authority under the Act-Proceedings initiated with 
regard lo confiscation of gold were pending at the time of filing declaration 
and also seizure made was in accordance with /aw-Hence, declorant not 
entitled to immunity. 
Words and Phrases : 
'Reason to believe' and 'any person '-Meaning of in the context of 
section 66!64(b) of the Gold (Control) Act, 1968. 
Income Tax Authorities conducted search of the residential 
premises of appellant No. 1-Karta of HUF, in his presence and 
recovered primary gold and gold items weighing 37,398.300 gms worth 
E 
F 
Rs. 18.70 lacs. Panchnama was prepared. In accordance with the 
Circular issued by CBDT, Income Tax Authorities intimated the Gold 
Control Officer about the recovery and on 30.8.1974 the Officer took G 
over the custody of the seized gold in presence of appellant No. 1 ·from 
the Income Tax Authorities and prepared a Panchnama. Gold Control 
Officer issued notice to the appellants-appellant No. I and his step 
mother as to why gold should not be confiscated and penalty not 
'ii. 
imposed under section 71(1) and 74 of the Gold (Control) Act, 1968. H 
944 
SUPREME COURT REPORTS (2004] SUPP. 2 S.C.R. 
A It alleged contravention of section 8(1) read with section 8(6) and 
section 16(1) read with section 16(5) of the Act as the appellants 
possessed primary gold which they failed to dispose of within the given 
time in terms of Rule I 26H(l )(8) of Defence of India Rules and failed 
to file declaration in respect of gold articles. appellants were also 
B charged for the

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