JUDGMENT [ENTITY], C.J.
1. This petition challenges the validity of certain provisions of the [ACT]. On 26th October 1962, simultaneously with the [ACT] under [SECTION] of the [ACT], the President promulgated the [ACT], pursuant to [SECTION] of the [ACT], the Central Government made the [ACT]. The [ACT] was subsequently repealed by the [ACT] on 12th December 1962 but by virtue of the having provision, the [ACT], were continued in force. The [ACT] was passed, as its Preamble shows, to provide for special measures to ensure the public safety and interest, the defence of India and civil defence and for trial of certain offences and for matters connected therewith. [SECTION], [SECTION] read as follows:
"3. (1) The Central Government may, by notification in the Official Gazettee, make such rules as appear to it necessary or expedient for securing the defence of India and civil defence, the public safety, the maintenance of public order or the efficient conduct of military operations or for maintaining supplies and services essential to the life of the community."
[SECTION] [SECTION] provided that without prejudice to the generality of the powers conferred by [SECTION], the rules may provide for and may empower any authority to make orders providing for all or anyof the matters enumerated in clauses (1) to (57). On of the matters enumerated was that set out in [SECTION], namely:
"(33) controlling the possession, use or disposal of, or dealing in, coil, bullion, bank notes, currendy notes, securities or foreign exchange;"
On 9the January 1963, the Central Government, in exercise of the power conferred under [SECTION] of the [ACT], amended the [ACT] by introducing [SECTION] comprising [SECTION], (hereinafter referred to as the [ACT]). [SECTION], [SECTION], defined "Board" to mean the Board constituted under [SECTION] laid down the constitution and functions of the Board. [SECTION] conferred power on the Board to authorise by general or special order "any person to exercise all or any of the powers exercisable by it under this Part other than the power to hear appeals under [SECTION] and this present power of authorisation" and different persons could be authorised by the Board to exercise different powers. [SECTION], [SECTION] required everyperson (not being a dealer or refiner required to apply for a licence, or licensed under [SECTION]) to make a form as to the quantity, description and other prescribed particulars of gold, other than ornaments, owned by him, within thirty days from the commencement of [SECTION] [SECTION] came into force on 9th January 1963 and therefore the period of thirty days limited by [SECTION] [SECTION] for making a declaration under that rule was due to expire on 8th February 1963 but the Central Government extended the period upto 28th Feburary 1963. The petitioner was admittedly not a dealer ro refinder required to apply for a licence or licensed under [SECTION] and he was therefor required under [SECTION], [SECTION] to make a declaration to the Board in the prescribed form as to the quantity, description and other prescribed particulars of gold owned by him. He accordingly made such declaration on 7th February 1963 and in that declaration he showed that he owned only six gold bars and twenty-five gold sovereigns.
2. Now according to the respondents the petitioner also owned further eight gold bars weighing 23,229 gms., and one hundred fifty gold sovereigns weighing 1,223 Gms., which were not declared by him and he remained in possession of this quantity of gold (hereinafter referred to as the undeclared gold). This undeclared gold was secreted by the petitioner beneath the earth two and a half feet deep at four points in the strong room of his celler. It appears that sometime prior to 18th November 1964, the tax authorities received infomation that some gold was lying secreted in the residential premises of the petitoiner and, therefore, on 18th November 1964, some senior officers of the Income-tax Department raided the residential premises of the petitioner and carried on search of the residential premises. On 20th November while the search was in progress, the petitioner, realising that the officers conducting the search were on the point of discovering the undeclared gold whih was lying secreted in the strong room of the celler, came out with the story that his later mother had secreted some valuables in the strong room of the celler at certain points and offered to point out the spots where according to him the valuables were secreted. When earth was dug out at those spots upto a depth of two and a half feet, cement containers were found embedded in the earth and in the cement containers was the undeclared gold of the estimated value of Rs. 2,83,320/-. The undeclared gold was deposited in a locker in the Safe Deposit Vault of the Bank of India Ltd., in the joint names of the petitinoer and one of the Income-tax Officers. Thereafter on 17th December 1964, one [ENTITY], DeputySuperintendent of Central Excise, went to the residence of the petitioner with two Panchas and in the presence of the Panchas he seized the undeclared gold under [SECTION], [SECTION]. The petitioner thereafter made frantic effort to purchase Gold Bonds against the undeclared gold as also to subscribe for the [ACT] by utilising the undeclared gold but his efforts were unsuccessful since the authorities refused to make the undeclared gold available for either of these two purposes. In the meantime, a notice dated 5th June 1965 was issued by the Assistant Collector of Central Excise, Baroda, calling upon the petitinoer to show cause why the undeclared gold which was seized as aforesaid and in respect of which an offence as mentioned in para 1 of the notice appeared to have been committed, should not be confiscated under [SECTION] and penalty should not be imposed under [SECTION], [SECTION]. The petitioenr filed a statement in reply to the show cause notice on 28th June 1965. The Collector of Central Excise did not proceed with the hearing for some time but ultimately, by a letter dated 6th January 1967, he fixed the date of hearing on 20th January 1967 and intimated to the petitioner that he may remain present for the purpose of hearing at the appointed time on that date. The petitioner thereupoin filed the present petition challenging the validity of the show cause notice dated 5th June 1965.
3. Before we set out the grounds of challenge, it would be convenient at this stage to refer to some of the relevant provisions of the [ACT]. We have already referred to [SECTION] and [SECTION], [SECTION], [SECTION], [SECTION] is also material and it runs as under:-
"[SECTION].
(10) No person other than a dealer and a refiner, licensed under this Part, shall acquire or have in his possession or under his control any quantity of gold required tobe declared under this rule unless such old has been included in a declaration or further declaratino made thereunder; ".
[SECTION] is the next important rule and it provides, omitting portions immaterial:
"126-L.
(2) Any person authorised by the Central Government by writting in this behalf may -
(a) enter and search any premises, not being a refinery or establishment referred to in sub-rule (1), vaults, lockers or any other place whether above or below ground;
(b) seize any gold in respect of which he suspects that any provision of this Part has been, or is being, or is about to be, controvened, along with the package, covering or receptacle, if any, in which such gold is found and thereafter take all measures necessary for their safe custody.
(16) Any person who in relation to any gold does or omits to do any act which act or omission would render such gold liable to confiscation under [SECTION], or abets the doing or omission of such an act shall be liable, in addition to any liability for any publishment under this part to a penalty not exceeding five times, the value of the gold or one thouand rupees, whichever is more; ". It may be pointed out that [SECTION] was not originally part of [SECTION] but it was introduced by an amendment made by the [ACT] was that the reference to the Board was deleted and instead, a provision was made for appointment of an Administrator who was to discharge substantially the same functions as the Board. [SECTION] provided for confiscation of gold seized under [SECTION] "[SECTION]. (1) Any gold seized under [SECTION] together with the package, covering or receptacle, if any, in which such gold is found shall be liable to confiscation.
(2) Such confiscation may be adjudged,
(3) An appeal shall lie to the Board against every adjudication of confiscation under sub-rule (2)."
[SECTION] which is the last Rule requiring to be noticed reads as under:
"126-X - Until the Board is constituted in accordance with the provisions of this Part and holds its first meeting, all or any of the functions of the Board may be performed by the Central Government."
The Board was constituted in accordance with the provisions of [SECTION] but it did not hold its first meeting and, therefore, at the material time, the Central Government was entitled to perform functions of the Board under [SECTION] Having noticed the relevant provisions of the [ACT], let us now examine the grounds on which the validity of the impugned show cause notice was challenged on behalf of the petitioner.
4. There were four groundson which the petitioner challenged the validity of the impugned show cause notice and they were:
(A)- [ENTITY] who seized the undeclared gold was not duly authorised by the Central Government under [SECTION], [SECTION] and, therefore the seizure of the undeclared gold was not a valid seizure under [SECTION] and it was nto liable to be confiscated under Rules [SECTION]. (B).- [SECTION], [SECTION] and [SECTION] suffered from the vice of excessive delegation of legislative power and were therefore null and void.
(C).- [SECTION], [SECTION] and [SECTION] were ultra vires [SECTION] of the [ACT] inasmuch as they were not made for carrying out one or more of the purposes set out in [SECTION], [SECTION].
(D).- [SECTION], [SECTION] under which penalty was sought to be imposed on the petitioner was not applicable in the present case since, on the facts alleged in the show cause notice, the omission to declare the undeclared gold within the prescribed period and remaining in possession of it had already rendered the undeclared gold liable to confiscation prior to the introduction of Rule [SECTION] and [SECTION], [SECTION] could not be applied retrospectively so as to take in cases where some act or omission rendering gold liable to confiscation was done by a peson prior to the coming into force of that clause.
We shall proceed to consider these grounds in the order in which they were pressed before us.
5. RE GROUND (A).- This ground is based on the premise tha unless gold is validly seized under [SECTION], it cannot be confisacted under [SECTION] It is, therefore, necessary to determine what, on a true construction of [SECTION], is the condition for confiscation under that Rule. It is necessary that gold must be validly seized under [SECTION] before it can be confiscated under [SECTION]? [SECTION] sayd that any gold seized under [SECTION] shall be liabel to confiscation. It is not only gold which is declared to be liable to confiscation; it is only gold seized under [SECTION] which is subjected to the liability to confiscation. Seizure of gold must, therefore, clearly precede its confiscation. Having regard to the clear and explicit language of the rule, Mr. [ENTITY] on behalf of the respondents could not resist the conclusion that unless gold is seized it cannot be confiscated but his argument was that though seizure may be a necessary condition of liability to confiscation, it was not neessary that the seizure must be a valid seizure under [SECTION] What is required to satisfy the condition of that rule is, he argued, the physical act of seizure and whether it is done in accordance with [SECTION] or otherwise is entirely immaterial for that relates only to the mechanics of seizure. He contended that it was therefore entirely irrelevant to consider whether or not the undeclared gold, was validly seized under [SECTION] This contention is, in our opinion,not well founded for it ignores the key words "any gold seized under [SECTION]". [SECTION] does not say "any gold seized" shall be liable to confiscation but it says "gold seized under [SECTION]" shall be liable to confiscation and effect must be given to the words "seized under [SECTION]". The seizure contemplated by [SECTION] is a seizure under [SECTION] and, therefore, it must be in accordance with [SECTION] Moreover the suggested construction would make a mockery of the safeguard provided by [SECTION] in regard to search and seizure of gold. Mr. [ENTITY] on behalf of the respondents relied on the decision of the Supreme Court in [PRECEDENT] but that decision deals with a totally differen question and cannot help in the construction of [SECTION] The point at issue is that case was whether seizure of certain articles as a result of search carried on in contravention of the provisions of [SECTION] and [SECTION] of the [ACT] was vitiated so that the fact of seizure could not be proved by the evidence regarding seizure. The Supreme Court held that it was undoubtedly true that because of the illegality of the search the Court might be inclined to examine carefully the evidence regarding seizure but the seizure was not vitiated and if the evidence with regard to the fact of seizure was otherwise satisfactory, the seizure could be established. We are not concerned here with any question of proving the fact of seizure. The question before us is as to what is the true interpretation of the words "any gold seized under [SECTION]" and these words clearly posit gold seized in accordance with [SECTION]
6. It therefore becomes necessary to consider whether the undeclared gold which was seized by [ENTITY] was validly seized under [SECTION] says that any person authorised by the Central Government by writing in this behalf may enter and search any premises and seize any gold in respect of which he suspects that any provision of [SECTION] has been or in being or is about to be contravened. The contention of the petitioner was that [ENTITY] was not authorised by the Central Government by writing to enter and search the premises of the petitioner and seize the undeclared gold. The respondents, however, urged that [ENTITY] had the necessary authority from the Central Government by reason of the Notification dated 10th January 1963 issued by the Central Government as amended by the subsequent Notification dated 5th Novemebr 1963 read with the permission dated 17th December 1964 given by the Superintendent of the Central Excise. Since the Notification of the Central Government dated 10th January 1963 as amended by the subsequent Notification dated 5th November 1963 was relied upon as the source of authority of [ENTITY] to exercise the function under [SECTION], it would be desirable to examine the terms of the said Notification. Considerable argument turned upon the language of the said Notification and we would, therefore, reproduce it in full in so far as it is material for the present purpose;
"S. O. 130:- In exercise of the powers conferred by [SECTION] of the [ACT], the Central Government hereby authorises officers of the Central Excise Department not inferior in rank to officers specified in column 2 of the table below as the persons who shall exercise any or all the powers of the Gold Board in relation to the matters specified in the corresponding entries in column 3 and column 4 of the said table.
TABLE Sr. Officers of the Central Rule of the Defence Nature of the powers and [ACT] to functions. authorised to exercise which the powers and the powers and functions. Functions have reference. 1 2 3 4 1 Superintendent. 126 E Issue, renewal, refusal or cancella- tion of licences of the dealers and acceptance and disposal of gold deposited by persons whose appli- cations for licences have been refused or whose licences have been cancelled. 2 Superintendent. 126F Acceptance and authentication of returns , affixing of signatures thereon and return of authenticated and signed copies of returns to licensed dealers and refiners. 3. Inspector. 126G Calling for and inspection of ac- counts, registers and documents from licensed dealers and refiners. 4. Inspector. 126I Acceptance and authentication of declarations by persons other than licensed dealers or refiners and affixing of singatures on delcara- tions and return of authenticated copies to the declarants. 5. Sub-Inspector. 126 L(1) Entry into and search of any esta- blishment of any licensed dealer or refiner and seizure of gold or packages, coverings and receptacle containing gold, in event of suspected contravention of the rules. 6. Sub-Inspector with the 126L (2) Entry into and search of premises written permission of not being refinery or establishment Superintendent. Of a licensed dealer and seizure of any gold or packages, coverings or receptacles containing gold which may be found therein. 7. Inspector 126 L (6) Power to take and dispose of samples. 8. [SECTION] Power to hold enquiry for the pur- pose of ascertaining whether there has been any contravention of the provisions of [SECTION], of the [ACT] and to summon persons and documents 9. Collector of Central 126 M (1) Confiscation of gold found and Excise & (2) seized under [SECTION] or [SECTION] where the value exceed two thousand rupees; Assistant Collector of (b) where the value does not Central Excise exceed two thousand rupees. 10. Assistant Collector of 126 Q According of sanction for the Central Excise. Prosecution of offences Dept. Of [ENTITY]. (No. F.7 (26)/67-SB) Dt. 9-1-1963.
This Notification was amended by the subsequent notification dated 5th November 1963 which was inter alia in the following terms:
"NOTIFICATION.
Whereas the Central Government is of the opinion that it is necessary in the public interest to do so:
Now, therefore, in exercise of the powers conferred by [SECTION], of the [ACT] the Central Government hereby makes the following amendments in the notification of the Government of India in the Ministry of Finance, Department of Economic Affairs No.S. O. 130, dated the 10th January 1963, namely:-
In the said notification:-
(2) for the Table, the following Table shall be substituted, namely:-
TABLE Sr. Officers authorised to exercise the Rules of the Defenece Nature of the powers and No. Powers and functions. Of [ACT] to functions.
which the powers and functions have reference.
1 2 3 4 1 . . . . . . . . .
2 . . . . . . . . .
3 . . . . . . . . .
4 . . . . . . . . .
5 . . . . . . . . .
6. Sub-Inspector of the Central Excise 126 L (2) Entry into and search of Department with the written per- premises not being refin-
mission of Superintendent. Preven- ery or establishment of a tive Officer of the Customs De- licensed dealer and partment for the time being seizure of any gold or employed for the prevention of packages, coverings or smuggling, with the written per- receptacles containing mission of a Gazetted Officer of the gold which may be found Collectorate of Customs, any officer therein. Of the Directorate of Revenue Intelligence, other than (i) the Administrative Officer, (ii) Hindi Officer, and (iii) Ministerial Officer, with the written permission of a Gazetted Officer of the Directorate of Revenue Intelligence. . . . . . . . . . . . ." 13th March 1968.
On 17th December 1964, the Superintendent of Central Excise granted written permission to [ENTITY] and other Inspectors and Sub-Inspectors of Central Excise to enter into and to search the premises of the petitioner and to seize any gold in respect of which any provision of the [ACT] had been or was being or was bout to be contravened. The question is whether by reason of the Notification dated 10th January 1963 as amended by the subsequent notification datd 5th November 1963 read with the permission, dated 17th December 1964 [ENTITY] was validly authorised by the Central Government under [SECTION].
7. The first contention of the petitoner on this point was that the recital as to the source of power contained in the Notifications dated 10th January 1963 and 5th November 1963 as also the words "any or all the powers of the Gold Board" used in the opening part of the Notification dated 10th January 1963 showed that the powers which the officers specified in the column 2 of the Table were authorised by the Central Government to exercise were the powers of the Gold Board in relation to the matters specified in the corresponding entries in columns 3 and 4 of the Table and since the power contemplated in [SECTION] was not a power of the Gold Board, the notification dated 10th Juanuary 1963 as amended by the subsequent Notification dated 5th November 1963 was ineffective to authorise any officer to execise the power under [SECTION]. Now it is no doubt true that in the opening part of the Notifications dated 10th January 1963 and 5th Novemebr 1963 it is said that the authorisation is granted by the Central Government in exercise of the powers conferred by [SECTION] read with [SECTION] which permit authorisation only in respect of the powers of the Gold Board but that it not determinative of the question, for, if the Central Government had the power to authorise exercise of power under [SECTION] under any other provision of law, the authority granted under the Notifications dated 10th January 1963 and 5th Novemebr 1963 could be jsutified under that power in spite of reference to the wrong power in the opening part of the said Notifications. It is well settled that a wrong reference to the power under which certain action is taken by the Central Government would not per se vitiate the action taken if it can be justified under some other power under which the Central Government coudl lawfully take such action. The wrong label given by the Central Government cannot affect the validity of the action if it is otherwise within the scope of the power of the Central Government. The recital as to the source of the power contained in the opening part of the Notifications dated 10th January 1963 and 5th November 1963 cannot, therefore, be of any help in determining the true meaning and effect of the Notification dated 10th January 1963 as amended by the subsequent Notification dated 5th November 1963.
8. Turning to the words "the powers of the Gold Board" it is true that, standing by themsleves, they seem to support the argument of the petitioner but if we read the Notification dated 10th January 1963 as a whole and try to collect the intention of the Central Government from every part of it, these wors do not present any difficulty in the way of a proper construction of the Notification. The intention of the Central Government as manifested in the Notification is clear beyond question. The Notification says in so many terms that the Central Government authorises the specified officers to exercise any or all the "powers of the Gold Board in relation to the matter specified in the corresponding entries in column 3 and column 4 of the said Table" and one of the matters specified in the Table is the power of entry into and search opf premises not being refinery or establishment of a licensed dealer and seizure of any gold which may be found therein under [SECTION]. It is clear from the Notification that the Central Government intended to authorise the specified officers to exercise the power of entry into and search of premises not being refinery or establishment of a licensed dealer and seizure of gold found therein under [SECTION] and that is why it included [SECTION] in the Table of the Notification. The question is whether the words "the powers of the Gold Board" in the opening part of the Notification should be allowed to defeat the manifest intent of the Central Government. These words undoubtedly can have no application in a case of exercise of power under [SECTION], for the power under [SECTION] is not a power of the Gold Board. But it must be remembered that the Central Government was providing for conferment of authority in respect of several matters and some matters such as [SECTION], [SECTION], [SECTION], [SECTION] and [SECTION] did refer to the powers of the Gold Board, it is, therefore, quite possible that the Central Government may have used the words "the powers of the Gold Board" though they were inappropriate in relation to the remaining matters, namely, [SECTION], [SECTION], [SECTION] and [SECTION]. Mere technical inappropriateness of language should not be allowed to defeat the intention of the Central Government Lord [ENTITY] speaking on behalf of the Judicial Committee of the Privy Council in [PRECEDENT] observed:
"it is, however, a very serious matter to hold that when the main object of a statute is clear, it shall be reduced to a nullity by the draftsman's unskilfulnesss or ignorance oflaw."
The same principes was reiterated by Lord Justice [ENTITY] in [PRECEDENT], when he said:
"When the purpose of an enactment is clear, it is often legitimate,because it is necessary, to put a strained interpretation upon some words which have been inadvertently used, and of which the plain meaning would defeat the obvious intention of the Legislature."
If the intention of the Central Government is expressed with sufficient clarity and there is no doubt here as to what the Central Government intended to accomplish, it would not be right on our part to defeat the intention of the Central Government merely because of technical inappropriateness of the language used to read the words "the powers of the Gold Board" as overiding the other parts of the Notification would be to sin against the fundamental rule of cosntruction which required that all parts of a statutory instrument must be read harmoniously so as to give effect to each and every part and not to result in rejection of any part as ineffective or futile. The effect of the suggested construction would be to render entries at serial Nos. (5), (6), (8) and (10) ineffective and meaningless and to mutilate the Notification by excising an important part of it. That would be contrary to all recognized canons of construction and would fail to achieve the intention of the Central Government. We are, therefore, of the view that on a plain natural construction of the words used in the Notification as amended, the Central Government authorised the officiers of the Central Excise Department not inferior in rank to the Sub-Inspector of Central Excise with the written permission of the Superintendent of Central Excise to exercise the power under [SECTION].
9. It was then contended on behalf of the petitioner that in any event, the authority conferred under the Notification was ineffective for the purpose of [SECTION] since the authority was conferred on the specified officers by designation of office held by them and not by name. The petitioner urged that the words used by the rule-making authority in [SECTION] were "any person" and these words indicated that a person to be entitled to exercise the power under [SECTION] msut be authorised by name and not by description of office held by him. This argument is plainly incorrect; it seeks to read much more in [SECTION] than what it contains. The words "any person" are used in [SECTION] to denote a wider category of Persons which would include any and every person who may be authorised by the Central Government but they do nto require that such person must be authorised by name and not by description of his office. There is no limitation as to the mode of conferment of authority in [SECTION] and we cannot import any restriction that the authority must be conferred by name and not by designation of office. Though the [ACT] is not strictly applicable in the construction of the [ACT], the principle embodied in [SECTION] of that Act can certainly be relied upon and it would be legitimate to hold that where a power to appoint any person to execute any fuction is conferred, such appointment may be made either by name or by virtue of office.
10. The next contention of the petitioner was that in any event the authorisation conferred under the Notification was not a valid authorisation in so far as the officers not inferior in rank to the Sub-Inspector of Central Excise were concerned since there was no direct authorisation in their favour but they were authorised to exercise the power under [SECTION] with the written permission of the Superintendent of Central Excise. The petitioner contended that the authorisation of the Central Government under [SECTION] must be directly in favour of the person concerned and it cannot be made conditional upon a permission to be granted by another officer of the Government. It is difficult to appreciate this argument. [SECTION] confers power on the Central Government to authorise any person which would include an officer of the Government and it is implicit in the conferment of the power that the Central Government may, while authorising such officer, impose a condition that he shall exercise the power under [SECTION] after obtaining the written permission of his superior. If such a condition is imposed on the exerise of the power, the person exercising the power would have to obtain the written permission of his superior as required by the condition before he can exerise the power but when he exercises the power he would do so by virtue of the authority conferred upon him by the Central Government. The authorisation may be unconditional or it may be subject to the fulfilment of a condition.
11. It is, therefore, clear that by the Notification dated 10th January 1963 as amended by the subsequent Notification dated 5th November 1963 the Central Government authorised the officers of the Central Excise Department not inferior in rank to Sub-Inspector of Central Excise to exercise the power under [SECTION] with the written permission of [ENTITY] was a Deputy Superintendent of Central Excise and was as such an officer of the Central Excise Department superior in rank to the Sub-Inspector of Central Excise and before effecting search and seizure, he obtained the pemission dated 17th December 1964 from the Superintendent of Central Excise. He must, therefore, be held to be a person duly authorised by the Central Government by writing in that behalf to exercise the power under [SECTION] and [SECTION] must be held to be unsustainable and must be rejected.
12. RE: GROUND (B): The challenge under this ground was that [SECTION], [SECTION] and [SECTION] suffered from the vice of excessive delegation of legislative power and were therefore invalid. But this challenge stands negatived by the decision of the Supreme court in [PRECEDENT]. The petitioner in that case challenged the validity of [SECTION] which was made by the Central Government under [SECTION], [SECTION] and [SECTION], [SECTION] [ACT] and the contention was that in conferring power on the Central Government to make rules, the Legislature had abdicated its essential legislative function in faour of the Central Government and therefore [SECTION] was invalid. [ENTITY], J., speaking on behalf of the Supreme Court repelled this contention observing:
"in the present case, one has merely to read [SECTION] and the detailed provisions contained in the several clauses of [SECTION] to be satisfied that the attack against the validity of the said section on the ground of excessive delegation is patently unsustainable. Not only is the legislative policy broadly indicated in the preamble to the Act, but the relevant provisions of the impugned section itself give such detailed and specific guidance to the rule-making authority that it would be idle to contend that the Act has delegated essentially legislative function to the rule-making authority. In our opinion, therefore, the contention that [SECTION] of the Act suffers from the vice of excessive delegation must be rejected If the impugned sections of the Act are valid, it follows that [SECTION] . must be held to be valid since it is consistent with the operative provisions of the Act and in making it, the Central Government has acted within its delegated authority."
This ground also, therefore, fails and must be rejected.
13. RE: GROUND (C):- this ground raises the question whether [SECTION], [SECTION] and [SECTION] are outside the ambit of the power conferred under Sction 3. The contention of the petitioner was that rules could be made under [SECTION] only for the purpose of carrying out one or more of the purposes set out in [SECTION], [SECTION] and since [SECTION], [SECTION] and [SECTION] did not subserve any one or more of the purposes set out in [SECTION], [SECTION], they were ultra vires [SECTION]. Now,for the purpose of deciding this contention, it is immaterial whether the [ACT] were made under [SECTION], [SECTION] or [SECTION], [SECTION], [SECTION]. Some argument was addressed before us on behalf of the petitioner as to whether all that was comprised within the definition of "Gold" in [SECTION] Explanation clause (d) could be said to be "Bullion" within the meaning of that term as used in [SECTION], [SECTION], [SECTION] but it is not necessary to examine this question, for even if the view be taken that the word "Bullion" is not sufficiently wide to comprehend within its scope and ambit of all that is included in the definition of "gold" in [SECTION], Explanation clause (d) and [ACT] cannot be justified under [SECTION], [SECTION], they can in any event trace the source of their authority in [SECTION], confers rule-making power in the Central Government which can be exercised for carrying out any one or more of the purposes set out in that sub-section and [SECTION] then proceeds to set out illustratively certain matters for which the rules made under [SECTION], [SECTION] provide. The matters set out in [SECTION], [SECTION] are not restrictive of the generally of the rule-making power conferred under [SECTION], [SECTION] function of [SECTION], [SECTION] is merely an illustrative one. It is, therefore, unnecessary to inquire whether the [ACT], were made under [SECTION], [SECTION] or [SECTION], [SECTION], [SECTION]. But in either case, they could be validly made only for securing one or more of the purposes mentioned in [SECTION], [SECTION]. There must be a relation between the provisions of the Rules and one or more of the purposes specified in [SECTION], [SECTION]. The test provided by the guiding principle set out in [SECTION], [SECTION] is an objective test and whether or not in making the Rules the guiding principle was followed by the Central Government and the Rules subserve any of the purposes set out in [SECTION], [SECTION] is a justiciable question. Vide clause (v) of classification of statutes made in [PRECEDENT], the observations of the Supreme Court in [PRECEDENT] and the unreported decision of this Court in [PRECEDENT]. If it can be shown from the intrinsic evidence in the rules or from the affidavits that the Rules do not subserve any of the purposes set out in [SECTION], [SECTION], the Rules would be outside the ambit of [SECTION].
14. Now the case of the respondents was that the [ACT] subserved the purpose of securing the defence of India and maintaining supplies and services essential to the life of the community and the argument of the petitioner was, therefore, directed towards showing that the Rules did not subserve either of the said two purposes. The petitioner urged that for the purpose of establishing that the Rules subserved the purpose of securing the defence of India and maintenance of supplies and services essential to the life of the community, it was not enough to show that there was some connection between the provisions of the Rules and the said two purposes but it was necessary to show that such connection was real and proximate so that the provisions of the Rules, if implemented, would result in the securing of the said two purposes. The arugment of the petitioner was that if this was the test to be applied for the purpose of determining whether the Rules subserved the said two purposes, it was apparent that the Rules did not subserve either of the said two pruposes for there was no real and proximater connection between the provisions of the Rules and the said two purposes and the provisions of the Rules, if implemented, did not directly and immediately result in the fulfilment of the said two purposes. Before we proceed to consider this argument of the petitioner, it is necessary to point out that while considering the question whether the Rules subserve the purposes for which they are claimed to have been made, it must be borne in mind that the Court is not to act as a Court of appeal and examine whether the view taken by the Central Government that the Rules subserve the stated purposes is right or wrong. The Court cannot substitute its own opinion for that of the Central Government; as a matter of fact, the Court would not have sufficient means to form an opinion as to whether the Rules subserve the stated purposes or not. Having regard to the nature of the problem to be tackled by the Central Government, the diversity of factors liable to be taken into consideration and the possibility of divergence of views in the assessment of the relative value and effect of varying social, political and economic factors and their interconnection with one another, a certain amount of latitude and free-play must be allowed to the Central Government and the rules made by the Central Government cannot be struck down unless it appears clearly that the rules cannot, on a reasonable view of the matter, subserve the stated purposes. Such would be the case where the provisions of the rules are totally unrelated to the stated purposes or they are not reasonably capable of being related to the stated purposes. The test must be whether the means adopted by the Central Government are reasonably related to the end in view, namely, the achievement of the stated purposes. We cannot accept the contention of the petitioner that the connection between the means and the end must b such that the implementation of the means must directly result in the achievement of end without any intervening steps in the chain of causation. In a complex society which is guided by many variable social, economic and political factors. It would be impossible to predicate in most cases that the means adopted would directly lead to the desired end without the intervention of any intermediate factors. To read the section as authorising the Central Government to make rules only where the direct effect of the rules is to secure any one or more of the purposes set out in the section would be to deprive the section of much of its utility and value. It is immaterial as to how many links are there in the chain between the provisions of the rules and the stated purposes for effectuating which the rules are made. There can be no hard and fast rule or strait-jacket formula in this respect. The question must always be, whether the provisions of the rules can, on a reasonable view of the matter, be said to be related to the stated purpose and if they are, they must be held to be within the scope and ambit of [SECTION].
15. This view which we are taking finds support from the decision of the English Court in [PRECEDENT]. There the question was whether a certain Regulation was ultra vires the regulation-making power conferred on His Majesty in Council by Section 1, [SECTION] of the [ACT] and dealing with this question, [ENTITY] J., stated the following test:
" and I ask myself whether it is a necessary, or even reasonable, way to aid in securing the public safety and the defence of the realm to give power to a Minister to forbid any person to institute any proceedings to recover possession of a house so long as a war worker is living in it."
The same test was also applied by the Judicial Committee of the Privy Council in [PRECEDENT]. That was an appeal from Canada and the statute which came up for consideration was the [ACT]. [SECTION], [SECTION] conferred power on the Governor-in-Council to do and authorise such acts and things and make from time to time such orders and regualtions as he may deem necessary or advisable for the purpose of maintaining, controlling and regulating supplies and services, prices, transportation, use and occupation of property, rentals, employment salaries and wages to ensure economic stability and an orderly transition to conditions of peace. In exercise of this power, an Order in Council was made by the Governor in Council and the question was whether this Order in Council was ultra vires [SECTION] of the Act. Explaining the scope and ambit of the power of the Governor in Council under [SECTION], the Judicial Committee of the Privy Council said:
" That does not allow him (Governor in Council) to do whatever he might feel inclined, for what he does must be capable of being related to one of the prescribed purposes, and the Court is entiled to read the Act in this way."
The Bombay High Court has also adopted the same test in [PRECEDENT].
14th March 1968
16. If this test is applied, the challenge to the validity of [SECTION], [SECTION] and [SECTION] on this ground must fail. The [ACT] are reasonably related to the purpose of securing the defence of India and maintenance of supplies and services essential to the life of the community. We may in this connection refer to paragraph 6 of the affidavit on [ENTITY] sworn on 1st April 1967 were it is stated:
". . . . . . . .I say that the said Rules have been framed by the Central Government in exercise of its powers conferred by the [SECTION], [SECTION] of the [ACT] and not merely under [SECTION], [SECTION], [SECTION], as suggested. I say that the Rules were framed inter alia with a view to put restrictions on the smuggling of gold and on the use of gold already smuggled into india. I say that smuggling of gold was causing a drain on the foreign exchange and that preventing smuggling of gold would result in increasing foreign exchange reserve of the Central Government which was very necessary for the purposes of the defence of India as well as the maintenance of the supplies and civil services essential to the life of the community. I say that the [ACT] are inter alia intended to serve the purpose of conservation of foreign exchange as also for the other purposes mentioned in [SECTION] of the said Act. In this connection , it is common knowledge that the prices of gold in India owing to the demand by the people for preparing ornaments and articles of gold has been very high and lucrative as compared to the price of gold in other countries and that is the inducement and incentive to the people to smuggle gold. The smuggling of gold adversely affects to a great extent India's foreign exchange reserve and therefore it was necessary to control internal market and business in gold for purposes of conservation of foreign exchange by restricting the use of such gold which is very essential in times of emergency for the defence of India as well as for maintenance of essential services and supply of essential commodities. I say that it was for these reasons and to achieve these objects that the [ACT] were promulgated."
In view of the statements in this paragraph, it is impossible to say that the [ACT] are totally unrelated to the purpose of securing the defence of India and maintenance of services and supplies essential to the life of the community or that they are not reasonably cpable of being related to either of the said two purposes. We must, therefore, reject this ground of challenge against the valdity of the impugned Rules.
17. RE: GROUND(D):-That takes us to the last ground of challenge against the validity of the impugned show cause notice. This ground of challenge was a limited one and it was directed only against the penalty sought to be imposed on the petitioner under [SECTION]. The argument of the petitioner was that the omission to declare the undeclared gold and retaining possession of it without declaring it which rendered it liable to confiscation had already taken place prior to 24th June 1963 when [SECTION] was introduced in [SECTION] of the [ACT] and [SECTION] was, therefore, not applicable and no penalty could be imposed on the petitioner under that Rule. This argument depends for its determination on a true interpretation of [SECTION] and it is, therefore, necessary to examine the language of that provision. [SECTION] says that any person who in relation to any gold does or omits to do any act which act or omission would render such gold liable to confiscation under [SECTION], or abets the doing or omission of such an act shall be liable, in addition to pay liability for any punishment under [SECTION] to a penalty not exceeding five times the value of the gold or one thousand rupees, whichever is more. It is a provision imposing penalty and therefore it should not be construed retrospectively so as to impose penalty for an act committed prior to its coming into force unless such effect cannot be avoided without doing voilence to its language. Now, there is nothing in the language of this provision which compels us to give it a retrospective operation.on the contrary, the language clearly suggestes a propsective operation. [SECTION] must, therefore, be construed as attracting penalty only in those cases where the act or omission which would render gold liable to confisaction is done after the coming into force of that provisoin. If there is any act or omission rendering gold liable to confiscation done by a person prior to coming into force of [SECTION], such a case wouldnot be covered by [SECTION] and the penalty under that provision would not be attracted. It therefore becomes necessary to inquire whether on the allegations contained in the show cause notice, any act or omission was done by the petitioner after the coming into force of [SECTION] which rendered the undeclared gold liable to confiscation. It is only if the respondents can show that such act or omission was done by the petitioner that the respondents can assume jurisdiction to impose penalty on the petitioner under [SECTION].
18. That raises the question as to when gold becomes liable to confiscation [SECTION] deals with confiscation of gold and syas that any gold seized under [SECTION] shall be liable to confiscation. Though the liability to confiscation is declared by [SECTION], it does not in so many terms states the grounds on which gold which is seized under [SECTION] shall be liable to confiscation. But the grounds can be clearly gathered by implication from reference to [SECTION] The scheme of the rules seems to be that any person authorised by the Central Government may seize gold if he suspects that in respect of it any provision of [SECTION] has been or is being or is about to be contravened and after gold is seized, it may be confiscated after adjudication in the manner provided by law if it is adjudged that any provision of [SECTION] has been contravened in respect of such gold. Seizure of gold can be made on suspicion but after seizure, gold can be confiscated if what was suspicion at the stage of seizure is convered into determination as a result of adjudication. Gold can, therefore, be confiscated if it is established that in respect of it any provision of [SECTION] has been contravened. Contravention of any provision of [SECTION] in relation to any gold would render such gold liable to confiscation. The question which we must, therefore, ask ourselves is, whether any contravention of a provision of [SECTION] rendering the underclared gold liable to confiscation was committed by the petitioner after the coming into force of [SECTION].
19. It is clear from the allegations contained in the show cause notice that according to the respondents, the petitioner owned the undeclared gold since the commencement of [SECTION] but failed to declare it within the prescribed period in contravention of [SECTION] and retained possession of it without declaring it in contravention of [SECTION]. The omission of the petitioner to declare the undeclared gold within the prescribed period in contravention of [SECTION] and reatining possession of the undeclared gold in contravention of [SECTION] rendered the undeclared gold liable to confiscation at the latest by 28th February 1963 and if it had been seized by any authorised person, it could have been confiscated under [SECTION] at any time prior to 24th June 1963 when [SECTION] was introduced. This undeclared gold had already become liable to confiscation prior to 24th June 1963 and no act or omission was required to be done after 24th June 1963 to render the undeclared gold liable to confiscation. It is no doubt, true that the petitioner continued in possession of the undeclared gold even after 24th June 1963 and was in possession of the same on 20th November 1964 when it was uncoverd by the raiding officers but that was not an act or omission which rendered the undeclared gold liable to confiscation. The act or omission which rendered the undeclared gold liable to confiscation had already been committed prior to 24th June 1963 and the penalty provided in [SECTION] was therefore not attracted. It is significant to note that the event which attracts penalty is not a breach of any provision of [SECTION] simpliciter but it is the doing of an act or omission which would render gold liable to confiscation. Moreover, the offence contemplated by [SECTION] is not a continuing offence. What attracts penalty under [SECTION] is the act or omission which renders gold liable to confiscation. In the present cse, the undeclared gold had already become liable to confiscation by reason of an act or omission of the petitioner prior to 24th June 1963 and there was accordingly no question to the petitioner doing any act or omission after 24th June 1963 which would render the undeclared gold liable to confiscation. [SECTION] had therefore no application to the case of the petitioner and the impugned show cause notice issued by the Assistant Collector, Central Excise, was without jurisdiction in so far as it sought to impose penalty on the petitioner under [SECTION].
20. We, therefore, allow the petition and make the rule absolute to the limited extent that a writ of mandamus shall issue quashing and setting aside the impugned show cause notice in so far as it calls upon the petitioner to show cause why penalty under [SECTION] should not be imposed upon him on the allegations contained in it. Since the petitoner has patly succeeded and partly failed, the proper order for costs would be that each party should bear and pay its own costs.
21. Petition partly allowed.