1966 (3) TMI 76 - HC - Central Excise

Summary

Issues Involved:
1. Legality of the seizure under Section 110(1) of the Customs Act.
2. Validity of the extension order under the proviso to Section 110(2) of the Customs Act.
3. Allegations of antedating the extension order.
4. Compliance with natural justice in extending the period for issuing a notice.
5. Constitutionality of the proviso to Section 110(2) under Article 19(1)(g) of the Constitution.

Issue-wise Detailed Analysis:

1. Legality of the Seizure under Section 110(1) of the Customs Act:
The petitioners argued that the seizure of gold was illegal as it was not made in the reasonable belief that the goods were liable to confiscation under the Customs Act. The court noted that the seizure was based on the belief that the gold was imported without a permit from the Reserve Bank of India, making it liable for confiscation under Section 111(d) of the Customs Act. The court held that the belief required for seizure under Section 110(1) is subjective and need not be disclosed. The petitioners did not allege that the officer lacked reasonable belief or that the belief was unreasonable. Thus, the court concluded that the seizure was legal.

2. Validity of the Extension Order under the Proviso to Section 110(2) of the Customs Act:
The petitioners contended that the extension order by the Collector of Customs was not made on the date it bore (August 18, 1963) but was antedated after the six-month period had expired. The court examined the circumstances and found no evidence to support the claim of antedating. It noted that the petitioners did not allege antedating in their initial communications and only raised the issue in the writ petitions. The court found the extension order valid as it was made within the permissible period.

3. Allegations of Antedating the Extension Order:
The petitioners alleged that the Collector of Customs antedated the extension order to make it appear as if it was made within the six-month period. The court scrutinized the surrounding circumstances and found no credible evidence to support this allegation. It emphasized that the delay in dispatching the order did not necessarily imply antedating. The court also referred to the Supreme Court's guidance on assessing such allegations based on probabilities and found the charge of antedating groundless.

4. Compliance with Natural Justice in Extending the Period for Issuing a Notice:
The petitioners argued that the extension order was made without hearing them, violating natural justice principles. The court held that the power to extend the period under the proviso to Section 110(2) is an administrative power. It does not require hearing the persons from whom the goods were seized. The court reasoned that involving the petitioners at this stage would be impractical and detrimental to the investigation. Therefore, the Collector was not obligated to state the grounds for extension in his order.

5. Constitutionality of the Proviso to Section 110(2) under Article 19(1)(g) of the Constitution:
The petitioners claimed that the proviso to Section 110(2), allowing the Collector to extend the period for issuing a notice, imposes an unreasonable restriction on their fundamental right to acquire, hold, and dispose of property under Article 19(1)(g). The court assessed the reasonableness of the restriction by considering the purpose of the Customs Act, which aims to prevent smuggling and punish smugglers. It noted that smuggling operations are complex and may require extended investigation periods. The court concluded that the proviso, which allows a maximum extension of six months, is a reasonable restriction in the public interest and is constitutional.

Conclusion:
The court dismissed the writ petitions, upholding the legality of the seizure, the validity of the extension order, and the constitutionality of the proviso to Section 110(2). The petitioners were ordered to pay the costs of the writ petitions.