1982 (1) TMI 65 - HC - Customs

Issues Involved:
1. Constitutionality of Section 110(3) of the Customs Act, 1962.
2. Validity of Notification No. 68/63, dated 4-5-1963.
3. Alleged wrongful exercise of the power of seizure.
4. Alleged violation of Articles 14 and 19(1)(g) of the Constitution.

Issue-wise Detailed Analysis:

1. Constitutionality of Section 110(3) of the Customs Act, 1962:

The petitioners challenged the constitutionality of Section 110(3) of the Customs Act, 1962, arguing it constituted an unreasonable restriction on the freedom to carry on trade and was arbitrary. The court examined the statutory framework and found that the power of search and seizure must be founded on a specific statutory right. Section 12 of the Excise Act, 1944, empowers the Central Government to apply provisions of the Customs Act, 1962, for the purpose of implementing and enforcing Section 3 of the Excise Act. The court held that the power of search implies the power to seize, and the Notification applying Section 110(3) was valid. The court also found that the safeguards under the Criminal Procedure Code apply to searches and seizures under the Excise Act, ensuring adequate protection and safeguards.

2. Validity of Notification No. 68/63, dated 4-5-1963:

The petitioners contended that the Notification No. 68/63 was ultra vires Section 12 of the Excise Act, 1944. The court held that Section 12 of the Excise Act empowers the Central Government to apply provisions of the Customs Act, 1962, and the Notification was validly issued. The court noted that searches and seizures are part of the procedure relating to the investigation of offences and that the power to search implies the power to seize. The court found that the Notification applying Section 110(3) of the Customs Act was not ultra vires Section 12 of the Excise Act.

3. Alleged wrongful exercise of the power of seizure:

The petitioners argued that the power of seizure was wrongfully exercised, as thousands of documents, including personal documents, were seized at random and not returned despite the passage of time. The court found that the respondents were conducting a thorough investigation into a suspected fraud involving evasion of Excise Duty. The court held that the seizure of documents was justified and that the respondents were not keeping the documents beyond reasonableness. The court noted that the petitioners were entitled to inspect the seized documents and take copies thereof, and there was no wrongful exercise of the power of seizure by the respondents.

4. Alleged violation of Articles 14 and 19(1)(g) of the Constitution:

The petitioners argued that Section 110(3) of the Customs Act was void and ultra vires Articles 14 and 19(1)(g) of the Constitution. They contended that the provision allowed for the indefinite retention of documents without adequate safeguards. The court held that the power of search and seizure is a power of the State for the protection of social security and is valid only when safeguards are extended. The court found that the safeguards under the Criminal Procedure Code apply to searches and seizures under the Excise Act. The court also held that the absence of a specific time limit for the return of seized documents did not make the provision arbitrary or discriminatory, as the documents could be retained until the relevant proceedings were terminated. The court concluded that Section 110(3) of the Customs Act was not violative of Articles 14 and 19(1)(g) of the Constitution.

Conclusion:

The court dismissed the petition, holding that the Notification No. 68/63 was valid, the power of seizure was not wrongfully exercised, and Section 110(3) of the Customs Act, 1962, was not unconstitutional or violative of Articles 14 and 19(1)(g) of the Constitution. The petitioners were ordered to bear the costs.

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