2019 (5) TMI 1574 - HC - FEMA

Release of property seized - Proceedings instituted pursuant to a complaint u/s 16(3) of the Foreign Exchange Management Act, 1999 (FEMA) - as alleged show cause notice issued by the concerned officer alleging contravention of the provisions of Section 3(b) of FEMA, read with Regulation 5(2)(c) of the Foreign Exchange Management (Manner of Receipt and Payment) Regulation, 2000 - HELD THAT - Insofar as Indian currency is concerned, the same was transferred to the Income Tax Authority. Silver and silver articles, which were seized by the respondent. The petitioner claims that he has submitted all the requisite details as called upon to do so by respondent no.2, and has repeatedly requested the respondent to release the said goods. However, the petitioner s request has not been acceded to, as yet. He submits that the show cause notice issued on 03.01.2018 and the proceedings are illegal and the goods seized do no fall within the scope of FEMA. As stated that the petitioner had replied to the show cause notice on 25.01.2018; however, no further proceedings have taken place, thereafter. In view of the above, this Court is not inclined to entertain the present petition at this stage, as the show cause notice issued to the petitioner is yet to be adjudicated. The pending application is also disposed of. Given the facts of the present case, this Court directs the Adjudicating Authority to take a final decision as expeditiously as possible, and in any event within a period of six weeks from today after affording the petitioner a reasonable opportunity of hearing.

Summary

Issues:
Challenging proceedings under FEMA, seizure of silver and silver articles, legality of show cause notice, delay in adjudication, direction to Adjudicating Authority.

Analysis:
The petitioner challenged proceedings initiated by the Adjudicating Authority under Section 16(3) of FEMA based on a complaint filed by respondent no.2. The petitioner contested a show cause notice alleging contravention of FEMA provisions. Search and seizure operations on the petitioner's premises resulted in the seizure of silver, silver articles, Indian currency, and foreign currency. The Indian currency was transferred to the Income Tax Authority, leaving the issue concerning the seized silver and silver articles. The petitioner claimed to have provided all required details to respondent no.2 and requested the release of the goods, which was not granted. The petitioner argued the illegality of the show cause notice and the proceedings, stating that the seized goods did not fall under FEMA's scope.

The petitioner responded to the show cause notice but no further proceedings occurred. The Court declined to entertain the petition at that stage since the notice was pending adjudication. The Court disposed of the pending application. However, considering the case's circumstances, the Court directed the Adjudicating Authority to make a final decision promptly, within six weeks, after giving the petitioner a fair hearing. The Court ordered the issuance of the order under the Court Master's signature.