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IN THE HIGH COURT OF DELHI AT NEW DELHI
Vibhu Bakhru, Amit Mahajan, JJ.
Ganesh Sawant – Appellant
Versus
Commissioner of Customs (Appeals) & Ors. – Respondents
W.P.(C) 16818 of 2022 and CM APPL. 53136 of 2022
Decided On : 03-05-2023
Customs Act - Proceedings under Section 110(1D) - 110(1A), 110(1B), 110(1C), 110(1D) - The court discussed the interpretation of Section 110(1D) of the Customs Act and the requirement of notice to be served on the person from whom the goods are seized. The court held that the decision in Pradeep Khandelwal v. Commissioner of Customs (Appeals) & Anr. is a binding precedent and that notice is required to be served of the proceedings under Section 110(1D) of the Customs Act. The court also emphasized the principles of natural justice and the requirement of notice and participation in the exercise.
Fact of the Case:
The petitioner, engaged in the business of manufacturing gold jewelry, challenged the conclusion of proceedings under Section 110(1D) of the Customs Act without notice. The controversy related to a single gold bar of 1000 grams seized by the authorities.
Finding of the Court:
The court held that the relief sought by the petitioner cannot be granted as the gold bar in question has already been disposed of. However, the court examined the interpretation of Section 110(1D) of the Customs Act in the context of the requirement of notice to the petitioner.
Issues: The issues involved the requirement of notice under Section 110(1D) of the Customs Act and the interpretation of the decision in Pradeep Khandelwal v. Commissioner of Customs (Appeals) & Anr.
Ratio Decidendi: The court emphasized the requirement of notice and participation in the proceedings under Section 110(1D) of the Customs Act, based on the principles of natural justice and the binding precedent set in Pradeep Khandelwal v. Commissioner of Customs (Appeals) & Anr.
Final Decision: The petition was disposed of with the observation that the petitioner is entitled to insist that the proceedings under Section 110(1D) of the Customs Act be conducted de novo, but no such orders are warranted in this case as the goods in question have already been sold.
JUDGMENT
Vibhu Bakhru, J. (Oral)
1. The petitioner has filed the present petition being aggrieved by the Commissioner of Customs (Appeals) concluding the proceedings under Section 110(1D) of the Customs Act, 1962 (hereafter `the Customs Act') without issuing any notice of the proceedings to the petitioner.
2. The petitioner claims that he is, inter alia, engaged in the business of manufacturing gold jewelry and selling the same in the domestic market. He states that he carries on the business in the name and style of a sole proprietorship concern named M/s Tanishka Bullions and Jewells. He states that although the said concern is registered with the Goods and Services Tax Department in the name of his wife, he is responsible for carrying on the day-to day affairs of the concern.
3. On 20.02.2021, the officers of the Directorate of Revenue Intelligence (DRI) had stopped the petitioner's car on NH-24. The said vehicle was searched and five gold bars weighing 1000 grams each were found. The said goods were seized by the said officers under Section 110 of the Customs Act. A panchnama
Rs.2,15,57,250/- (Rupees two crores fifteen lacs fifty seven thousand two hundred and fifty only). The market value of the said goods was determined at Rs.2,34,00,000/- (Rupees two crores thirty four lacs only). Thereafter, a show cause notice dated 16.08.2021 was issued, inter alia, to the petitioner.
5. Subsequently, on 14.10.2021, the respondents returned four gold bars, which were seized on 20.02.2021. The controversy, thus, relates to a single gold bar of 1000 grams, which continued to be retained by the concerned authorities.
6. It is stated that the proceedings under Section 110(1D) of the Customs Act were conducted by the Commissioner of Customs (Appeals) on 21.11.2022 and the seized inventory was certified. Further, by an order dated 24.11.2022, the respondents were also granted permission for disposal of the seized gold.
7. Thereafter, the respondents issued a notice dated 25.11.2022 under Section 150 of the Customs Act informing the addressees, including the petitioner, that proceedings under Section 110(1D) of the Customs Act were completed on 21.11.2022, and by an order dated 24.11.2022, the Commissioner (Appeals), New Delhi had confirmed and certified the inventories mentioned in the panchnama. The seizing authorities had also issued an RFD (Ripe for Disposal) Certificate. Pursuant to the same, the disposal section of the Customs Department was in the process of disposing of and selling 2000 grams of gold bars, which included 1000 grams of gold seized by the officials of the DRI on 20.02.2021.
8. This Court is informed that the good in question (gold bar weighing 1000 grams) has since been disposed of.
9. The petitioner has impugned the said notice dated 25.11.2022 issued under Section 150 of the Customs Act. The petitioner also prays that directions be issued to the respondents to conduct proceedings under Section 110(1D) of the Customs Act, de novo.
10. Plainly, the relief, as sought for, cannot be granted. There is no infirmity in the notice dated 25.11.2022 issued under Section 150 of the Customs Act. The gold bar in question has since been disposed of and therefore, no order can be passed directing the Commissioner of Customs (Appeals) to once again conduct the proceedings under Section 110(1D) of the Customs Act. This Court had, in the order dated 17.02.2023, observed that the prayers made in the present petition do not survive. However, the petition was not disposed of as this Court considered it apposite to examine the question regarding the interpretation of Section 110(1D) of the Customs Act. This was in the context of the petitioner's contention that notice under Section 110(1D) of the Customs Act was required to be issued to the petitioner in view of the decision of the Coordinate Bench of this Court in Pradeep Khandelwal v. Commissioner of Customs (Appeals) & Anr., 2022 SCC OnLine Del 1294. The learned counsel for th
The main legal point established in the judgment is the requirement of notice and participation in the proceedings under Section 110(1D) of the Customs Act, based on the principles of natural justice....
The disposal of seized property without notice and due process violates constitutional rights, rendering such actions illegal and unconstitutional.
The judgment emphasizes the importance of adhering to principles of natural justice in adjudication processes and highlights the requirement for a specific officer of Customs to issue show cause noti....
Seizure of goods under the Customs Act, 1962 necessitates strict compliance with procedural requirements, including timely issuance of show cause notices; failure results in the mandatory return of t....
A writ petition challenging seizure under the Customs Act may be considered non-maintainable if a related and previously adjudicated matter on jurisdictional grounds remains unresolved.
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