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Madras High Court
KAILASAM,MAHARAJAN
Collector of Customs and Central Excise, Somajiguda, Hyderabad - Appellant
Versus
Amruthalakshmi - Respondent
Decided On : 10/08/1973
CUSTOMS ACT - SECTION 110, 124 - NOTICE - VALIDITY - CONFISCATION - PENALTY - JURISDICTION - CRIMINAL PROSECUTION - SANCTION.
Fact of the Case:
The petitioners challenged the order of the Collector of Customs confiscating 450 watches and levying penalties, as well as the sanction granted for prosecution under Section 135 of the Customs Act. The main contention was that the notice under Section 110 of the Act was not in accordance with the law, rendering further proceedings under Section 124 illegal and without jurisdiction.
Finding of the Court:
The court held that the notice under Section 110 and the notice under Section 124 of the Act are entirely independent. Section 110 deals with the right of the officer to retain the seized goods for a specified period and his duty to return them to the possession of the owner from whom they were seized unless action under Section 124 had been taken. Section 124 prescribes the procedure under which the goods can be confiscated and a penalty can be imposed.
Issues: 1. Whether a valid notice under Section 110 of the Customs Act is a sine qua non for taking action under Section 124 of the Act? 2. Whether the failure to give notice under Section 110 affects the power of the authorities to proceed with the proceedings for confiscating the goods or imposing any penalty? 3. Whether the extension of time provided for under Section 110 for the issuing of a show cause notice was properly done?
Ratio Decidendi: 1. The court held that there is no connection between the exercise of power of confiscation of the goods and of imposing a penalty, and the provision in Section 110 which requires the officer to hand over the goods to the owner after the period specified, if no notice under Section 124 (a) is given. 2. The court held that the failure to give notice under Section 110 does not in any way affect the power of the authorities to proceed with the proceedings for confiscating the goods or imposing any penalty. 3. The court held that the question of whether the extension of time provided for under Section 110 for the issuing of a show cause notice was properly done or not, may be challenged by the aggrieved persons in the appeal before the Central Board of Excise and Customs.
Final Decision: The court allowed the appeals and set aside the judgment of the learned Judge. The writ petitions were dismissed, and there was no order as to costs.
KAILASAM, J. :- These appeals arise out of four writ petitions, W. P. Nos. 944 of 1971, 1408 of 1971, 1409 of 1971 and 1411 of 1971. The relief asked for was for the issue of a writ of certiorari to quash the order of Collector of Customs dated 18-8-1970 and 12-8-1970, directing the confiscation of 450 watches and levying of penalties, and against the order of the Collector of Customs granting sanction of prosecution against the petitioners under Section 135 of the Customs Act.
2. The main contention that was raised before the learned Judge and which found acceptance was that the notice as contemplated under Section 110 of the Customs Act was not in accordance with law and as such further proceedings taken by the Collector under Section 124 of the Customs Act was illegal and without jurisdiction. The short facts that are necessary may be stated. The watches were seized on 1-6-1969. The Collector gave a notice on 4-11-1969 extending the period of notice to 31-5-1970. He actually gave a show cause notice on 1-5-1970 that is more than six months after the seizure of the watches but before the expiry of one year. The contention that was raised was that the requirements under Section 110 of the Act had not been complied with, and therefore no further action could be taken by the authorities under Section 124 of the Act.
3. Section 110 occurs in Chapter XIII of the Customs Act which relates to searches, seizure and arrest. Dealing with the power of the officers to seize goods, documents and other things. Section 110 provides that if the officer has reason to believe that any goods are liable to confiscation, he may seize the goods. The proviso enables the officer in cases where it is not practicable to seize the goods, to serve on the owner of the goods an order that he shall not remove, part with or otherwise deal with the goods except with the previous permission of such officer. Sub-section (2) enables the officer to keep the seized goods for a period of 6 months. But when goods are seized under sub-section (1) of S. 110 of the Act, if a notice as provided for under Cl. (a) of Section 124 is not given within 6 months of the seizure of the goods, the officer is bound to return the goods to the person from whose possession they were seized. The proviso enables the officer to get an extension of the period of notice from 6 months to one year by applying to the Collector of Customs.
4. Section 124 occurs in Chapter XIV relating to confiscation and imposition of penalties. Now in dealing with the power of confiscation or imposing penalty, the section provides that no order of confiscating any goods or imposing any penalty on any person shall be made unless the conditions provided for under sub-sections (a), (b) and (c) are fulfilled. Sub-section (a) of S. 124 requires that a notice in writing informing the owner of the grounds on which it is proposed to confiscate the goods or to impose a penalty should be given and sub-section (b) requires that an opportunity of making a representation in writing should be given within such reasonable time as may be specified in the notice against the grounds of confiscation or imposition of penalty mentioned therein and sub-section (3) requires that a reasonable opportunity of being heard in the matter should be given. Now Section 110 requires that the goods seized or directed to be kept in the custody of the owner have to be returned to the person from whose possession they were seized if no notice in respect thereof is given within 6 months of the seizure of the goods under clause (a) of Section 124. It follows, therefore, that if within the period of six months or one year as the case may be, no notice has been given under clause (a) of Section 124, the goods shall be returned to the person from whose possession they were taken. The power to
retain the goods is no longer available after the period had expired. We find no connection between the exercise of power of confiscation of the goods a
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