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Rules DRI Cannot Use to Extend Timeline
In a significant ruling on the interplay between and under the , the held that customs authorities cannot use a to indefinitely restrain goods and later issue a formal order to bypass the . The Division Bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati directed the to release a Toyota Land Cruiser that had been detained for over a year without a proper order, imposing costs of Rs. 10,000 for the authorities' "" conduct.
A Year-Long Without Formal
The case arose when Pranavbhai Ambalal Patel imported a Toyota Land Cruiser from Japan for USD 54,000 in
. After paying customs duty of Rs. 99,78,795, the vehicle was given
on
. However, on
, DRI officers conducted a search at Patel's residence and prepared a
directing him not to
"deal with or part with"
the car until the inquiry was completed. No formal
order under
was passed at that time.
Despite Patel cooperating with the investigation, the DRI did not issue a memo until — over 14 months later — and a under on . Patel challenged the through a , arguing that the limitation period under Section 110(2) had already lapsed, entitling him to the return of the vehicle.
The Legal Framework: Section 110 and Its Provisos
mandates that if no notice under (a) is given within six months of , the goods must be returned. The first proviso allows the Principal Commissioner or Commissioner to extend this period by up to six months for reasons recorded in writing. In Union of India v. Jatin Ahuja (2025), the held that if neither notice is issued within six months nor the period extended, the seized goods must be released.
The DRI argued that the formal occurred only on , and thus the six-month period started from that date. They blamed the pendency of the for the delay. However, the court found that the on effectively detained the vehicle, and no court order had prevented the authorities from passing a order earlier.
Court's Ruling: Limitation Runs From Actual
The High Court categorically rejected the DRI's justification, noting that
"the customs authority cannot indefinitely seize the goods in the garb of
, without passing any order under the provisos to Section 110(1) of the Act."
The court held that in the absence of a formal order,
"when there is actual
of goods, the time will start running from
of goods vide
."
The judgment emphasised that a is merely a statement by witnesses and cannot substitute the statutory order required under Section 110. Referring to the 's decision in
, the court reiterated that the proper officer must record reasons to believe the goods are liable to confiscation and pass a separate
order. The
's
also mandates that
"whenever goods are being seized, in addition to the
, the proper officer must also pass an appropriate order."
Since the
memo
was issued after more than a year, the court held that
"the time limit of six months as mentioned in Section 110(2) and the further period of six months under the proviso will get consumed, and the DRI thereafter cannot be allowed to reap the fruits of its inaction."
Key Observations
"The customs authority cannot indefinitely seize the goods in the garb of
, without passing any order under the provisos to Section 110(1) of the Act. In absence of any order, when there is actual
of goods, the time will start running from
of goods vide
."
"The
cannot satisfy the ingredients of the Section 110 of the Act, and an order is mandatory under the proviso to Section 110 of the Act for paving the way for issuance of notice under
(a)
within a period of 6 months unless extended."
"The respondents have attempted to justify their remissness on the pendency of the
. ... the DRI never raised the objection that it had not initiated proceedings under Section 110 of the Act and was prevented from undertaking such proceedings because of the pendency of the
."
Decision and Implications
The High Court ordered the release of the Toyota Land Cruiser within two weeks and imposed costs of Rs. 10,000 on the respondents. It also struck down the dated , which had relied on paragraph 2 of — a provision already set aside by the in .
The ruling sends a clear message that customs authorities cannot circumvent statutory limitation periods by delaying formal while maintaining effective control over goods through informal . It reinforces the procedural safeguards under Section 110 and ensures that the timeline for initiating is strictly adhered to, protecting the rights of importers against indefinite investigation-driven restraint.
