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1997 Supreme(Del) 849
High Court Of Delhi
BIMAL KUMAR JAIN - Appellant
Versus
COMMISSIONER OF CUSTOMS - Respondent
Civil 4526 of 1996
Decided On : 10/17/1997
Barkha Babbar, G.L.RAVAL, KULJIT RAVAL
The failure of the respondents to serve the petitioner with a show cause notice under Section 124(1) of the Customs Act, 1962, within the prescribed period of six months, rendered the seizure of the car illegal and the car was therefore liable to be returned to the petitioner under Section 110(2) of the Act.
Headnote:
CUSTOMS ACT, 1962 - SECTION 110(2), 115, 124 - SEIZURE OF GOODS - RETURN OF SEIZED GOODS - NOTICE TO SHOW CAUSE - CONFISCATION OF CONVEYANCES - OWNERSHIP OF VEHICLE - BURDEN OF PROOF - WRIT OF MANDAMUS - INTERPRETATION OF STATUTORY PROVISIONS.
Fact of the Case:
The petitioner's car was seized by Customs officials under Section 110 of the Customs Act, 1962, on suspicion of being liable to confiscation under Section 115 of the Act. The petitioner claimed ownership of the car and filed representations with the respondents, but no action was taken thereon. The petitioner filed a writ petition seeking the release of the car and a direction to the respondents to serve him with a show cause notice under Section 124(1) of the Act.
Finding of the Court:
The court held that the petitioner had made out a prima facie case of ownership of the car and that the respondents had failed to apply their mind to the documents filed by the petitioner. The court further held that the respondents had failed to serve the petitioner with a show cause notice under Section 124(1) of the Act within the prescribed period of six months, and that the car was therefore liable to be returned to the petitioner under Section 110(2) of the Act.
Issues: 1. Whether the petitioner had made out a prima facie case of ownership of the car? 2. Whether the respondents had failed to apply their mind to the documents filed by the petitioner? 3. Whether the respondents had failed to serve the petitioner with a show cause notice under Section 124(1) of the Act within the prescribed period of six months?
Ratio Decidendi: 1. The court held that the documents filed by the petitioner, including the registration book, insurance papers, and road tax papers, were sufficient to establish a prima facie case of ownership of the car. 2. The court held that the respondents had failed to apply their mind to the documents filed by the petitioner and had failed to take a decision on the petitioner's claim of ownership. 3. The court held that the respondents had failed to serve the petitioner with a show cause notice under Section 124(1) of the Act within the prescribed period of six months, and that the car was therefore liable to be returned to the petitioner under Section 110(2) of the Act.
Final Decision: The court allowed the petition in part and directed the respondents to immediately release the car to the petitioner subject to his furnishing a bond before the Asstt. Collector of Customs (Preventive) in an amount equivalent to the price of the car. The court also directed the respondents to serve the petitioner with a show cause notice under Section 124(1) of the Act and to afford him an opportunity of making a representation and of hearing.
( 1 ) IT is not disputed that Maruti Esteem Car bearing registration No. DLG-6 was seized under Section 110 of the Customs Act, 1962 on 22. 6. 95 by the Customs Officials having formed an opinion that it was liable to be confiscated under Section 115 of the Customs Act, 1962 (hereinafter the Act, for short ).
( 2 ) IT is also not disputed that on 22. 6. 95, the car was standing outside the Indira Gandhi International Airport at Delhi with driver Prakash Sharma in it.
( 3 ) NOTICE to show cause against the proposed confiscation of the car has been issued by the Assistant Commissioner of Customs (Preventive) on 11. 12. 95. It is addressed to (i) Shri Ganji Satya - Narayana Dasu, (2) Shri Padamnabha Menon Rajaram, (3) Shri Surender Kumar Jain, (4) Shri Prakash Sharma, and (5) Shri Naresh Jain. The proceedings for confiscation and other adjudication proceedings under the Act are pending qua the abovesaid five persons. However, so far as the petitioner Birnal Kumar Jain is concerned neither he has been served with any show cause notice till this day nor is he a party to the proceedings pending under the Customs Act.
( 4 ) ACCORDING to the petitioner he is the sole proprietor of M/s Jain Enterprises. In the name and style of M/s. Jain Enterprises with its office situated at 17, Mecra Tower Industrial Complex, Wazirpur, Delhi, the petitioner is carrying on the business of trading in stainless steel. He had paid for the car from his personal account while purchasing the same. He has been paying the taxes and he is being assessed as sole proprietor of M/s. Jain Enterprises. The registration of the car stands in the name of M/s. Jain Enterprises. It is further alleged by the petitioner that Naresh Kumar Jain is his real brother. On the fateful day, Naresh Kumar Jain with his family intended to go to Nepal. He had borrowed the petitioner s car for going to the Airport.
( 5 ) IT is also alleged that on 22. 6. 95, Ganji Satya - Narain Dasu arrived at the IGI Airport by flight No. EK-700. Substantial quantity of gold and silver was recovered from his possession on a search being taken. The Customs officials suspected involvement of Naresh Kumar Jain, the brother of the petitioner, in the said smuggling of goods. Ganji Satyanarain Dasu, Nareah Kumar Jain and Parkash Sharma - the driver were all arrested. Admittedly on that day, the car was not used for carrying smuggled gold or silver, though in the statements recorded under Section 108 of the Customs Act, subsequently to the point of seizure of the car and arrest of the persons above-named, the customs officials have gathered information that on earlier occasions this car was used for transporting smuggled goods concealed in the car.
( 6 ) ON 11. 1. 96, the petitioner made a representation to the Assistant Commissioner of Customs (Preventive ). Copy of the representation is filed and marked as Annexure P-4. Therein the petitioner has set out his ownership of the car, his ignorance of the incident leading to the seizure and denial of the car having been involved in smuggling activities at any point of time. Representation was repeated on 2. 4. 96. The petitioner had also filed documents showing the deposit by him from his personal account of the initial booking amount for purchase of the car, payment of consideration for the purchase of the car from his personal account, the petitioner having signed the invoice with the agent showing the petitioner to be the sole proprietor of M/s. Jain Enterprises. Copies of the income tax returns, assessment orders and cheque dated 2. 1. 95 were also filed. The same set of documents has been filed with the petition in this Court also. Original registration book alongwith the insurance and road tax papers were lying in the car at the time of seizure and arc in the custody of the respondents.
( 7 ) ON the date of hearing, we had called for the records of the proceedings under the Customs Act from the custody of the respondents. On our specif
