George Vs. Assistant Commissioner of Central Excise, Trichur  INSC 75 (2 March 1990)
K. Jayachandra (J) Reddy, K. Jayachandra (J) Pandian, S.R. (J)
1990 AIR 847 1990 SCR (1) 793 1990 SCC (2) 345 JT 1990 (1) 409 1990 SCALE (1)424
(Control) Act, 1968: Sections 27(7)(b), 55(3) and 85(1)(a)Licensed
Dealer--Licensed premises consisting of four-storeyed Building--Showroom on the
ground floor--Gold ornaments kept on third floor--Whether amounts to carrying
on business in unlicensed premises.
and Procedure: Trial Court' s finding--Possi- bility of two views of the
evidence on record--Appellate Court should not disturb even if it were possible
to reach a different conclusion.
appellant, a licensed dealer, was charged under Section 55(3) of the Gold
(Control) Act, 1968 for failure to maintain the necessary accounts and under
section 27(7)(b) for carrying on business in the unlicensed premises on the
ground that while the show room of the licensed premises was on the ground
floor and appellant had kept the gold orna- ments in the third floor of the
The Trim Court acquitted the appellant and the
Appellate Court confirmed the finding under section 55(3) but convict- ed him
under section 27(7)(b) holding that the third floor does not form part of the
this appeal it was contended on behalf of the appel- lant that (i) the High
Court misocnstrued the provisions of section 27(7)(b); (ii) two views being
possible of the evidence on the record the interference with the order of
acquittal by the Appellate Court was uncalled for.
aside the conviction and allowing the appeal, this Court,
1. In the instant case the entire building hears only one municipal number and
the licence was given for conducting the business in that building. There is no
other evidence in support of the prosecution case that the third floor of the
building does not form part of the licensed premises. [796C; 797C] 794
the finding reached by the trial judge cannot be said to be unreasonable, the
Appellate Court should not disturb it even if it were possible to reach a
different conclusion on the basis of the material on the record. The Appellate
Court therefore should be slow in disturbing the finding of fact of the Trial
Court, and if two views are reasonably possible of the evidence on the record,
it is not expected to interfere simply because it feels that it would have
taken a different view ff the case had been tried by it. [797E-F] Bhagwati and
Ors. v. State of Uttar
Pradesh,  3 SCC
view taken by the trial court is quite reasonable and there were no grounds for
the High Court to interfere with the findings of the trial court acquitting the
APPELLATE JURISDICTION: Criminal Appeal No. 453 of 1989.
the Judgment and Order dated 8.1.1988 of the Kerala High Court in Crl. A. No.
382 of 1986.
Ashok K. Sen, G. Viswanatha Iyer and R. Satish for the Appellant.
A. Subba Rao, P. Parmeshwaran and Mrs. Sushma Suri for the Respondent.
Judgment of the Court was delivered by REDDY, J. The Gold (Control) Act ws
enacted in the year 1968 with the object of control of the production, supply,
use and possession of and business in gold ornaments and articles of gold in
the interest of economic and financial interests of the community. Section 27
of the Act lays down that no person shall commence, or carry on, business as a
dealer unless he holds a valid licence issued under the provisions of the Act
and the said licence should be in the prescribed form. Section 27(7)(b) lays
down that a licensed dealer shall not carry on the business as such dealer in
any premises other than the premises specified in his licence.
4(h) defines 'dealer' as one who carries on the business of making, preparing,
polishing, buying, selling, supplying, processing or converting gold, whether
for cash or for deferred payment or for commission, remuneration or other
The appellant before us was one such licensed dealer having a shop in a
building, which is four-storeyed, bearing Municipal No. 25/ A/1479 on the Municipal Road, Trichur (Kerala). The showroom
where the actual day-to-day business is conducted is in the ground floor. On
23.9.81 Superintend- ent of Central Excise, examined as P.W. 1, raided the shop
of the appellant and conducted a search. Books of accounts maintained by the
appellant were verified and it was found that there was a stock of 1372 pieces
of gold ornaments. The search party found 169 pieces of new gold ornaments in
the third floor of the building weighing 667.850 grams kept in a card-board
box. They were seized. On further investigation conducted by the officer it was
also revealed that the appellant's brother, his business associate, had
purchased some items of jewellery from another dealer and had also kept the
same in the said licensed premises. A complaint was preferred against the
appellant alleging that he has unac- counted jewellery and that he was carrying
on the business in the third floor which is not a licensed premises.
trial court flamed charges under Section 27(7)(b) read with Section 85(1)(a)
and Section 55(3) of The Gold (Control) Act and necessary evidence was adduced.
Failure to maintain the necessary accounts as a dealer is punishable under
Section 55(3) and carrying on business in a premises other than the premises
specified in the licence is punisha- ble under Section 27(7)(b). The appellant
inter alia took the plea that he is carrying on the business of gold only in
the ground floor and the items therein have been accounted for including the
items that were found in the third floor.
also took the plea that he sold these items to a customer and separated them
and kept them in the third floor for the purpose of delivering the same to the
purchaser and that the third floor also formed part of the licensed premises.
trial court on an appreciation of the evidence, acquitted the accused holding
that the prosecution has failed to prove that the accused had unaccounted jewellery
and that he was carrying on business in an unlicensed prem- ises. An appeal
against acquittal was filed in the High Court of Kerala and the learned Judge
confirmed the finding of the trial court in respect of charge under Section
however, held that the third floor does not form part of the licensed premises.
Therefore an offence punishable under Section 27(7)(b) is proved and
accordingly convicted and sentenced the appellant to three months' simple
imprisonment and to pay a fine of Rs.5,000 in default to suffer a further
period of two months. Questioning the same, the present appeal by way of
special leave has been filed.
The learned counsel for the appellant submits that the High Court has
misconstrued the provisions of Section 27(7)(b) and at any rate in the instant
case the High Court erred in interfering in an appeal against acquittal. It is
also submitted that even if the prosecution case is to be accepted in this
context what at the most can be said is that two views are possible and in such
an event the inter- ference in an order of acquittal is uncalled for.
not in dispute that the appellant obtained a licence for carrying on the
business. In the licence that was granted in the year 1975 and which was also
renewed in the subsequent years upto 1977, the address of the premises is mentioed
as No. 25/A/1479. The Inspector in his cross- examination admitted that the
entire building bears only one municipal number and the licence was given for
conducting the business in that building. The prosecution has not led any other
evidence to show that the third floor does not form part of the licensed
premises. That apart admittedly on each storey there is only a small room and
the entire build- ing is bearing only one municipal number and that is the
premises beating that number which is mentioned in the licence. The question is
whether the mere fact that the showroom is in the ground floor does necessarily
lead to an inference that the gold ornaments which are accounted for cannot be
stored in any other room in that building? Section 27 reads as under:
Save as otherwise provided in this Act, no person shall commence, or carry on,
business as a dealer unless he holds a valid licence issued in this behalf by
the Adminis- trator.
(2) A licence
issued under this section-- (a) shall be in such form as may be prescribed.
be valid for such period as may be specified therein.
be renewed, from time to time, and (d) shall be subject to such conditions and
restrictions as may be prescribed.
(7)(a) The Administrator shall specify, in each licence granted to a dealer,
the premises in which such dealer shall carry on business and no other person
shall carry on busi- ness as a dealer in the said premises.
licensed dealer shah not carry on business as such dealer in any premises other
than the premises specified in his licence.
above principal question has to be examined in the light of this provision and
see whether the appellant was carrying on business in any premises other than
the premises specified in the licence. As already mentioned, the entire
building is given one municipal number and there is no other evidence in
support of the prosecution case that the third floor of the building does not
form part of the licensed premises. In any event under the facts and
circumstances of the case one can at the most go the extent of saying that two
views are possible. In Bhagwati and Others v. The State of Uttar Pradesh,  3 SCC 235 it is held:
if the finding reached by the trial Judge can not be said to be unreasonable,
the appellate Court should not disturb it even if it were possible to reach a
different conclusion on the basis of the material on the record.This has been
held to be so because the trial Judge has the advantage of seeing and hearing
the witnesses and the ini- tial presumption of innocence in favour of the
accused is not weakened by his acquittal. The appellate Court therefore should
be slow' in disturbing the finding of fact of the trial Court, and if two views
are reasonably possible of the evidence on the record, it is not expected to
interfere simply because it feels that it would have taken a different view if
the case had been tried by it." We are convinced that the view taken by
the trial court is quite reasonable. Therefore, viewed from any angle, we are
firmly of the view that there were no grounds for the High Court to interfere
with the findings of the trial court acquitting the accused.
counsel for the State, however, pointed out that the High Court has observed at
one place in the judgment that the counsel for the accused has not raised any
contention that the room in the third floor also formed part of the licensed
premises. Except making this 798 bare observation, the High Court has not
considered the plea taken by the accused and the finding of the trial court in
this regard. In the same paragraph, the learned Judge has, however, mentioned
that the accused raised a contention in the trial court that the room in the
third floor also formed part of the licensed premises and this plea found favour
with the trial court. That apart the case of the accused has throughout been
that room in the third floor formed part of the licensed premises. Therefore
this observation of the appellate court that the counsel did not contend that
the third floor formed part of the licensed premises does not appear to be
correct. At any rate, there is no such admis- sion by the accused and nor can
it be said that there was such a concession by the counsel for the accused. For
all the aforesaid reasons, the conviction and sentence awarded by the High
Court are set aside. Accordingly the appeal is allowed.
Appeal al- lowed.