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High Court Of Delhi
SHANTI LAL MEHTA - Appellant
Versus
UNION OF INDIA - Respondent
Civil 334 of 1973
Decided On : 11/09/1982
The detention of seized goods by the customs authorities is unlawful after the expiry of six months from the date of seizure, as the same is directly in contravention of sub-section (2) of section 110 of the Customs Act, 1962. The right to restoration of the seized goods is a vested civil right which accrued to the owner of the goods on the expiry of six months. The power of extension under the proviso to sub-section (2) of section 110 cannot be exercised without an opportunity being given to the person from whom the goods were seized. The order of confiscation of goods is illegal if the detention of the goods beyond six months was illegal.
Fact of the Case:
The petitioner's premises were searched by the customs authorities and certain items of ornaments and diamonds were seized. The petitioner explained that the seized goods were not smuggled goods but were the property of the queen mother of Nepal who had given them to him for repair, remaking and polishing etc. The customs authorities extended the time for issuing a show cause notice to the petitioner by three months under the proviso to section 110 (2) of the Customs Act, 1962. The petitioner sent a reply to the show cause notice and protested against the seizure of the goods as well as the extension of time. The Additional Collector of Customs passed an order of confiscation of the goods and imposed a penalty of Rs. 25,000 on the petitioner. The petitioner appealed to the Central Board of Excise and Customs, which modified the order of the Additional Collector and partly allowed the appeal. The petitioner filed a revision petition, which was rejected by the Central Government. The petitioner filed a writ petition challenging the confiscation of the goods.
Finding of the Court:
The court held that the detention of the seized goods by the customs authorities was unlawful after the expiry of six months from the date of seizure, as the same was directly in contravention of sub-section (2) of section 110 of the Customs Act, 1962. The right to restoration of the seized goods is a vested civil right which accrued to the owner of the goods on the expiry of six months. The power of extension under the proviso to sub-section (2) of section 110 cannot be exercised without an opportunity being given to the person from whom the goods were seized. The order of confiscation of goods is illegal if the detention of the goods beyond six months was illegal.
Issues: 1. Whether the detention of seized goods by the customs authorities is lawful after the expiry of six months from the date of seizure? 2. Whether the right to restoration of the seized goods is a vested civil right? 3. Whether the power of extension under the proviso to sub-section (2) of section 110 can be exercised without an opportunity being given to the person from whom the goods were seized? 4. Whether the order of confiscation of goods is illegal if the detention of the goods beyond six months was illegal?
Ratio Decidendi: The court held that the detention of seized goods by the customs authorities is unlawful after the expiry of six months from the date of seizure, as the same is directly in contravention of sub-section (2) of section 110 of the Customs Act, 1962. The right to restoration of the seized goods is a vested civil right which accrued to the owner of the goods on the expiry of six months. The power of extension under the proviso to sub-section (2) of section 110 cannot be exercised without an opportunity being given to the person from whom the goods were seized. The order of confiscation of goods is illegal if the detention of the goods beyond six months was illegal.
Final Decision: The court allowed the writ petition, set aside the order of confiscation of the goods, quashed the order of the Addl. Collector of Customs, the order of the Central Board of Excise and Customs and the order of the Central Government, and directed the respondents to return the seized goods to the petitioner.
( 1 ) THIS is a petition under Article 226 of the Constitution of India by Shanti Lal Mehta, petitioner, who carries on business at Calcutta under the name and style of Mjs. Chotalal Amulekh and Mohanlal as sole proprietor thereof. The petition is directed against the respondents, namely, the Union of India, the Central Board of Excise and Customs, and the Additional Collector of Customs. The facts :
( 2 ) THESE are the facts. On 15-2-1967 the petitioner s premises at Calcutta were searched by the custom authorities. Certain items of ornaments and diamonds were seized. A list of the seized articles was prepared. In his explanation the petitioner told the customs authorities that the articles seized from him were not smuggled goods, as was believed by the customs, but were the property of the queen mother of Nepal who had given them to him for repair, remaking and polishing etc. On this explanation the Additional Collector of Customs wrote a letter to Counsel General of Nepal in India on 3-7-1967 enquiring from him whether Her Highness, the queen mother, had entrusted ornaments and diamonds in question to the petitioner. On 24-7-1967 Counsel General replied to the enquiry and said that some ornaments were given to the petitioner for repair, remaking and polishing etc. sometime in January-February, 1976 during their Majesties visit to Calcutta. But he denied that any ornaments were given for sale by queen Mother.
( 3 ) AS the penod of six months was going to expire on 14th August, 1967, the search having taken place on 15-2-1967, the Additional Collector on 4-8-1967 made an order extending the time for a further period of 3 months under the proviso to section 110 (2) of the Customs Act, 1962 (the Act ). Thus time was extended upto 14-11-1967. Thereafter the Assistant Collector of Customs issued a show cause notice on 10-11-67. In the show cause notice itself he ordered the release of certain items of the seized goods. But as regards others he required the petitioner to show cause why the seized diamonds and ornaments set with diamonds as specified in the notice should not be confiscated under clause (d) of section 111 of the Act and why penal action be not taken against him under section 112 of the Act. To this show cause notice the petitioner sent a reply on 27-12-1967. He pretested against the seizure of the goods as well as the extension of time. He said :
"it is incumbent on the Customs Authorities to return all the goods seized from my possession. The purported extension granted by you till the 14th. November, 1967 for issuing show cause notice. to me is invalid, illegal, and of no effect, inasmuch as much extension, if any was granted without notice to me and without sufficient cause being shown in that behalf and in violation of the fundamental provisions of natural justice. "
( 4 ) IT will be seen that extension was challenged on the ground that it was made by an ex parte order without any notice to the petitioner.
( 5 ) ON 14-8-1968 the Additional Collector of Customs passed an order of confiscation of the goods. He also imposed a penalty of Rs. 25,000 on the petitioner. The petitioner appealed to the Central Board of Excise and Customs. The Board on 20-9-1971 modified the order of the Additional Collector and partly allowed the appeal. They released some more goods and remitted the penalty in full. In respect of item 6 to 11 and 16, which are the only items in dispute now, the Board upheld the order of confiscation. The petitioner filed a revision. On 30-5-72 the Central Government rejected the revision application On 23-3-73 the petitioner filed the present writ petition.
( 6 ) THE real question for decision in this case is whether the confiscation of the goods is lawful when the detention o the goods was unlawful. It will be remembered that the goods were seized on 15-2-1967. Six months expired on 14-8-67. During this period of six months no show cause notice was issued. The Additional Collector
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