LexTHE COLLECTOR OF CUSTOMS, MADRAS versus NATHELLA SAMPATHU CHETTY AND ANOTHER
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1981 Jowohar Z..I B""""" v. UniM of India 1961 8t1l1f'lt011 2S. i86 SL"PREME COURT REPORTS [I !162] accep~ tho appellant's argument that tho letter was intended to make a substantial variation in the contract by making the deposit. of security a. condition precedent instead of a. condition subse- quent. . In the result the appeal fails and is dismissed ll 01th costs. 4. Appeal dismused. THE COLLECTOR OF CUSTOMS, MADRAS t'. NATHELLA SAMPATHU CHETTY AND ANOTHER (And connected cases) (B.P. SINHA, c. J., A. K. SARKAR, M. HIDAYATULLA.H, N. RAJAGOPALA AYYANGA.R and J. R. lllUDilOLKAR, JJ.) Smuggl•d Gooda-Re&trictiona on imporration of gold- S•izurt of gold on muonable bPlz°p/ that it UllU amuggl•~BarclM of proof that it uaa not amuggled °" peraon in ~ Conatitutional va/iJlity of enaclmeRt-Rfer..,.ce of statute in a atconcl statute without incorporatiorr-Effut of modification. of the firat •tatutP.-1'oreign Exchange Regulation Act, 1947 (7 of 1947), sa. 2(/), 8(1), 23A-See Cuatoma Act, 1878 (8 of 1878), u. 19, 167(8), 178A, 182-Conalitutio,.of Ind4a, Arta. 1', 19(1), (/) and (g). Un1er the powers conferred bys. 8( I) of the Foreign Exchange Re~'\llation Act, 1947, the Central Government issued a notification on August. 25, 1948, placing a ban on the imp1>rtation of gold except with the permission of the Reserve Bank. Section 23A of the Act, which was introduced by an amendment in 1952, provided that " .. the restrictions imposed by s. 8( I) .. shall be deemed to have been imposed under s. 19 of the Sea Customs Act, 1878, and all the provi1ions of the Act shall have effect accordi~gly .. " Section 19 of the Sea Custom• Act, 1878, enabled the Central Government, by notification, to prohibit or restrict the bringing goods of any specified description into .-- ' 3 s.c.R. SUPREME OOURT REPORTS 78i India and, by reason of other provisions of that Act, goods imported in contravention of the notification issued under s. 19 were liable to confiscation. In 1955, the Sea Customs Act, 1878, was amended by the introduction of s. l 78A in that Act, which provided, inter alia· that "where goods were seized under that Act in the reasonable belief that they were smuggled goods, the burden of proving that they were not smuggled goods shall be on the person from whose posse!Sion the goods were seized;" On June 26, 1956, N, an employee of the respondent, on alighting at the Central Station in Madras from Bombay was intercepted by a Police Head Constable and, on a search of his clothing, four blocks of gold weighing about a thousand tolas were found in his possession. The officers of the customs department interrogated him and, finding that he was unable to produce any record for the purchase of the gold, seized from him the blocks of gold. N admitted that he brought the gold.for the respondent and enquiries were made to verify the story narrated by him as to the source from which he obtained the gold. Theroafter the Collector of Customs being prima facie of the view that the gold seized had been smuggled, issued notice to the respondent to show cause why the said gold should not be confiscated. The respondent offered his explanation but the Collector held that the respondent had not discharged the onus of proving that the gold was not smuggled, an onus which had been cast on him by s. l 78A of the Sea Customs Act, 1878, and directed the confiscation of the gold under s. 167 (8) of that Act. The respondent challenged the legality of the action taken by the Collector of Customs on the grounds, inter alia, ( 1) that s. l 78A of the Sea Cu.toms Act, 1878, was consti- tutionally invalid as it was an unreasonable restraint on the citizen's rights to hold property or to do business guaranteed by Art. 19(l)(f) and (g) of the Constitution of India and was not saved by els. (5) and (6) respectively of Art. 19; (2) that s.178A of the Sea Customs Act which was enacted in 1955 could not be invoked in adjudicating a contravention of a notification under the Foreign Exchange Regulation Act inasmuch as s. 23A of the latter Act when enacted in 1952 in effect incor- porated into that Act all the relevant provisions of the Sea Customs Act as they stood in 1952 with the result that any subsequent amendments to the Sea Customs Act could not affect s. 23A; and (3) that the rule as to the burden of proof under s. I 78A was not attracted to the present case because t
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