Finolex Cables Limited and Others vs State of Karnataka and Others

D.V. Shylendra Kumar, J.—Writ petitioners 1 to 3 are owners and consignors of certain goods which are being transported and operated by the fourth respondent-carrier and which goods to the misfortune of the petitioners was found in the company of some tainted excisable goods liable for confiscation under the provisions of the Karnataka Excise Act, 1965 (for short, ''the Act'').

The authorities under the Act having under a mahazar seized even the non-excisable non-dutiable goods belonging to the petitioners and for release of such goods having imposed the condition that the petitioners if are seeking for release of the goods pending adjudication proceedings for confiscation in terms of Section 43 of the Act, have to furnish Bank guarantee for value of the goods seized, petitioners have approached this Court praying for the relief to quash the very seizure.

Petitioners have questioned the legality of the act of seizure as one without jurisdiction for the reason that the goods belonging to the petitioners was neither excisable goods nor one involved in any offence relating to an excise offence under the provisions of the Excise Act, 1965 and therefore, the act of seizure in terms of mahazar at Annexure-D is one without jurisdiction; that when the seizure itself is bad in law, the order calling upon the petitioners to furnish Bank guarantee for the tentative release of the seized goods in terms of order under Annexure-E, dated 12-6-2008 is also bad and have sought for quashing of both the act of seizure and the order calling upon the petitioners to furnish Bank guarantee for release of the seized goods.

Notices had been issued to the respondents and respondents are represented by Smt. Asha M. Kumbargerimath, learned Government Pleader.

I have heard Sri KM. Nataraj, learned Counsel for the petitioners and Smt. Asha M. Kumbargerimath, learned Government Pleader appearing for the respondents.

The only question that is required to be examined in this writ petition is as to whether the act of seizure is one without jurisdiction.

In this regard, submission of Sri Nataraj, learned Counsel for the petitioners by pointing out to the provisions of Sections 43 and 43-A of the Act is that the goods in question which were PVC wires used in electrical fittings etc., and which were being transported through goods carrier bearing Registration No. KA-19-9608 and in packed condition in boxes are not articles which are covered by the provisions of either Section 43 or 43-A of the Act; that no excisable goods in the context of which an offence was committed was covered or being packed with the articles belonging to the petitioners; that no action for confiscation could have been resorted to as against the goods which was being carried by the goods vehicle and belonging to petitioners 1 to 3 through petitioner 4-carrier and if the goods are not even liable for confiscation there is no incidental power for seizure or interim release and therefore the order at Annexure-C and D insofar as it relates to the seizure and condition imposing release of the goods are liable to be quashed.

On the other hand, Smt. Asha Kumbargerimath, learned Government Pleader appearing for the respondents, by drawing attention to the very provisions would submit that the mahazar very clearly indicates that the excisable goods with reference to which an offence had been committed was kept below the articles which the petitioners claim as belonging to them; that it was being used to cover the excisable goods i.e., to conceal the excisable goods and it matters little as to whether the petitioners had intentionally done any act constituting an offence under the Act or that the petitioners did not have any involvement with the offence etc.

Section 43 of the Excise Act, 1965 reads as under:

Liability of certain things to confiscation. - Whenever an offence has been committed, which is punishable under this Act, the following things shall be liable to confiscation namely. -

(1) any intoxicant, materials, still, utensil, implement or apparatus in respect of, or by means of which, such offence has been committed;

(2) any intoxicant lawfully imported, transported, manufactured, had in possession or sold along with, or in addition to, any intoxicant liable to confiscation under Clause (1); and

(3) any receptacle, package, or covering in which anything liable to confiscation under Clause (1) or Clause (2); is found, and the other contents, if any, of such receptacle, package or covering and any animal, vehicle, vessel, raft or other conveyance used for carrying the same.

The section enables confiscation of intoxicant or materials, utensils, apparatus, etc., used for committing an offence and also the accompanying lawfully imported intoxicants which keeps company with the violating intoxicants or materials etc. This is achieved in terms of Clauses (1) and (2) of Section 43 of the Act. Clause (3) of Section 43 of the Act enables confiscation of receptacle, package or covering in which goods liable to confiscation under Clause (1) or (2) are found and also other contents of such receptacle package or covering etc. When it is not in dispute that the excisable goods liable for confiscation under the Act for committing an offence etc., are carried in the goods vehicle bearing Registration No. KA-19-9608, the very vehicle also faces the prospect of confiscation and likewise such other contents of the vehicle which were keeping company with the intoxicant materials with reference to which the offence had been committed.

The language of Clauses (2) and (3) of Section 43 of the Act is wide enough to cover all such excisable and non-excisable goods which have kept company and were travelling together in the very receptacle or carrier for confiscation. If there is a power for confiscation, power for seizure is inevitable and the release being on the condition of furnishing Bank guarantee for the value, imposing such condition is also in terms of the statutory provisions.

I do not find any lack of jurisdiction in the act of seizure and in the order imposing condition for release of the seized articles pending adjudication for confiscation, etc.

No need for interference at this stage. The other defences if any are kept open to the petitioners to be made use of at an appropriate stage.

This writ petition is dismissed.