1988 (9) TMI 54 - HC - Customs

Customs - Seizure of currency notes amounting to 72 lakhs by police under Section 102 of Cr. P.C.

Issues Involved:
1. Legality of the seizure of Indian Currency Notes by Customs Authorities under Section 110(1) of the Customs Act, 1962.
2. Non-compliance with Section 124(a) of the Customs Act, 1962 regarding the issuance of a show-cause notice.
3. Jurisdiction and reasonable belief for the seizure and confiscation under Sections 110 and 121 of the Customs Act.
4. Allegations of coercion and duress in recording statements by the Customs Authorities.
5. Constitutional validity of the seizure orders under Articles 14, 19(1)(g), and 300-A of the Constitution of India.

Detailed Analysis:

1. Legality of the Seizure of Indian Currency Notes by Customs Authorities:
The petitioners challenged the seizure of Rs. 72,26,090/- by the Assistant Collector of Central Excise & Customs Division, Udaipur, under Section 110(1) of the Customs Act, 1962, on the grounds that the amount was the sale proceeds of smuggled gold. The petitioners argued that the amount was in police possession and thus could not have been seized by the Customs Authorities. The respondents contended that the seizure was valid as they had reason to believe the currency was linked to smuggled gold.

2. Non-compliance with Section 124(a) of the Customs Act:
The petitioners argued that no show-cause notice as required by Section 124(a) of the Customs Act was issued within six months of the seizure, nor was the period extended by the Collector of Customs. The court found substance in this contention, as the respondents admitted that no such notice was issued, nor was the period extended. Consequently, the seizure was rendered invalid due to non-compliance with Section 124(a).

3. Jurisdiction and Reasonable Belief for Seizure and Confiscation:
The petitioners claimed that there was no material evidence to support a reasonable belief that the seized amount was the sale proceeds of smuggled gold, and thus the seizure under Section 110 and confiscation under Section 121 were without jurisdiction. The respondents maintained that the seizure was based on a reasonable belief and due application of mind. However, the court noted the lack of a show-cause notice and the absence of sufficient cause for extending the period, leading to the conclusion that the seizure lacked jurisdiction.

4. Allegations of Coercion and Duress:
The petitioners alleged that the statements recorded by the Customs Authorities were under duress and coercion, and they were not provided copies of these statements. The respondents denied these allegations. The court did not delve deeply into this issue, focusing instead on the procedural lapses in the seizure process.

5. Constitutional Validity of the Seizure Orders:
The petitioners argued that the seizure orders violated Articles 14, 19(1)(g), and 300-A of the Constitution of India. The court found the seizure orders to be ineffective and quashed them due to procedural non-compliance, thus indirectly addressing the constitutional concerns.

Conclusion:
The court allowed the writ petition, declaring the seizure orders dated January 1, 1988, ineffective and quashing them. The court emphasized the non-compliance with Section 124(a) of the Customs Act and the lack of an extended period for issuing a show-cause notice, rendering the seizure invalid. The currency notes, currently in police custody, were ordered to be returned to the petitioners. No order as to costs was made.

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