1982 (11) TMI 56 - HC - Customs

Seized goods Retention beyond the time limit is illegal and without jurisdiction Natural justice Invalid extension of period for retention Burden of proof wrongly cast on the petitioner Order of confiscation illegal Prohibitory order Effect Burden of proof Smuggled goods

Issues Involved:
1. Legality of the extension of time for issuing a show cause notice.
2. Validity of the confiscation order.
3. Compliance with the principles of natural justice.
4. Reasonable belief for seizure of goods.
5. Vested civil rights of the petitioner.

Detailed Analysis:

1. Legality of the Extension of Time for Issuing a Show Cause Notice
The petitioner challenged the extension of time granted by the Additional Collector of Customs under Section 110(2) of the Customs Act, 1962, on the grounds that it was done ex parte, without notice to him. The court emphasized that the extension of time is a quasi-judicial power requiring a judicial approach and cannot be exercised without giving the affected party an opportunity to be heard. Citing the Supreme Court's decision in *Assistant Collector of Customs v. Charan Dass Malhotra*, the court held that the extension order dated 4-8-1967 was void ab initio as it was made without hearing the petitioner.

2. Validity of the Confiscation Order
The court found that the confiscation of the goods was unlawful due to the illegal detention of the goods beyond the statutory period. According to Section 110(2) of the Customs Act, if no show cause notice is issued within six months of the seizure, the goods must be returned to the person from whom they were seized. The court held that the refusal to return the goods after the expiry of six months was illegal, rendering the subsequent confiscation order dated 14-8-1968 null and void.

3. Compliance with the Principles of Natural Justice
The court highlighted that the extension of time for issuing a show cause notice must comply with the principles of natural justice. The petitioner was not given an opportunity to be heard before the extension was granted, violating the fundamental principles of natural justice. This non-compliance invalidated the extension order and, consequently, the confiscation proceedings.

4. Reasonable Belief for Seizure of Goods
The court examined whether the customs officer had a reasonable belief that the goods were smuggled at the time of seizure. The court found that the customs authorities acted on vague information and did not provide any definite material to justify the reasonable belief that the goods were smuggled. The court noted that the goods did not have any foreign markings or labels and were ordinary ornaments. Thus, the seizure was based on suspicion rather than reasonable belief, invalidating the application of Section 123 of the Customs Act, which shifts the burden of proof to the person from whom the goods were seized.

5. Vested Civil Rights of the Petitioner
The court emphasized that the right to the restoration of the seized goods is a vested civil right that accrues to the owner upon the expiry of the initial six months period if no notice is issued or valid extension is granted. This right cannot be defeated by an ex parte extension order. The court held that the petitioner's right to the restoration of the goods vested indefeasibly and absolutely on 14-8-1967, and the subsequent confiscation order was an arbitrary misuse of power.

Conclusion:
The High Court quashed the confiscation order dated 14-8-1968, the order of the Central Board of Excise and Customs dated 18-9-1971, and the order of the Central Government dated 30-5-1972. The respondents were directed to return the seized items to the petitioner forthwith. The court reiterated that the statutory obligation to return the goods under Section 110(2) of the Customs Act must be strictly adhered to, and any deviation from this mandate renders subsequent actions illegal. The judgment underscores the importance of compliance with natural justice and the protection of vested civil rights.

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