1994 (9) TMI 77 - HC - Customs

Summary

Issues Involved:
1. Interpretation of the word "Given" in Sections 110(2) and 124(a) of the Customs Act.
2. Whether Section 110(2) of the Customs Act is a mandatory provision.
3. Validity of the show cause notice issued beyond the prescribed period.
4. Quashing of confiscation proceedings initiated under Section 110(1) of the Customs Act.

Summary:

1. Interpretation of the word "Given" in Sections 110(2) and 124(a) of the Customs Act:

The main question to decide was the interpretation of the word "given" as it appears in Sections 110(2) and 124(a) of the Customs Act. The petitioners argued that "given" should mean that the show cause notice must have been received by the person or at least reached or tendered to the person. Conversely, the Customs Authorities contended that "given" means the date on which the notice was issued by the authorities. The court accepted the petitioners' interpretation, stating that the word "given" must mean that the notice must have been received by the importer or at least reached them.

2. Whether Section 110(2) of the Customs Act is a mandatory provision:

The court examined whether Section 110(2) is mandatory. Section 110(2) stipulates that if no notice is given within six months from the date of seizure, the goods must be returned to the person from whom they were seized. The court held that Section 110(2) is indeed mandatory, and the Collector of Customs can only extend the period by another six months if sufficient cause is shown. Beyond one year, the Collector loses the power to extend the period, and a vested civil right accrues to the importer to get the seized goods released.

3. Validity of the show cause notice issued beyond the prescribed period:

The court discussed the importance of giving notice within the prescribed period and held that merely sending the notice by registered post does not fulfill the requirement of "given" as per Sections 110(2) and 124(a). The court referred to various judgments, including the Supreme Court's interpretation in K. Narasimhiah v. H.C. Singri Gowda, which stated that "giving" is not complete unless the notice reaches the person concerned. The court concluded that the show cause notice must be received or at least reach the importer within the prescribed period.

4. Quashing of confiscation proceedings initiated under Section 110(1) of the Customs Act:

The court held that the proceedings for confiscation under Section 110(1) cannot be quashed merely because the show cause notice was served beyond the period of limitation. The Supreme Court's decision in M/s. J.K. Bardolia Mills v. M.L. Khunger clarified that non-compliance with Section 110(2) only means the seized goods must be returned, but it does not render the initial seizure illegal.

Conclusion:

The court issued a writ of mandamus directing the respondents to release the seized goods to the petitioners within a fortnight, upon payment of customs duty, and to issue the requisite detention certificate for demurrage and other charges. The writ application was allowed in part with no order as to costs.