2024 (2) TMI 779 - HC - Customs

Seizure of Gold - smuggling of gold - Extension of period for issuance of show cause notice - Interpretation of statute, sub-section (2) of Section 110 - Validity of intimation issued under Section 110(2) of the Customs Act, 1962 - HELD THAT - The Principal Commissioner of Customs concluded that the investigation was delayed due to key persons, who are involved in the case, being at large and therefore their examination being stalled. For such reason, he also concluded that further investigation is required to be carried out and that an extension of time is necessary. These conclusions are said to have been reached on the basis of facts placed before the Principal Commissioner of Customs. It certainly cannot be inferred from the above that reasons in writing were not recorded. The other aspect to be taken into account is whether the recorded reasons are germane to the extension. Since it is recorded therein that the investigation was delayed due to persons being at large and that such persons are required to be examined or questioned in relation to the case, it certainly cannot be said that the recorded reasons are not germane to the extension. At the highest, the petitioner may be in a position to say that sufficient reasons were not recorded. However, in exercise of discretionary jurisdiction, it is ordinarily not appropriate to examine the sufficiency of reasons because appellate jurisdiction is not being exercised. Therefore, no case is made out for interference with the impugned intimation - Petition disposed off.

Summary

Issues involved: Challenge to intimation issued under Section 110(2) of the Customs Act, 1962.

Summary:
The case involved writ petitions challenging an intimation issued under Section 110(2) of the Customs Act, 1962 regarding alleged smuggling of gold. The impugned intimation extended the period for issuance of show cause notice by six months. The interpretation of Section 110(2) was a key point of contention, with the petitioner arguing that sufficient reasons should be recorded for extension, while the respondent contended that the amended provision only required recording of reasons and informing the affected persons.

The petitioner relied on previous judgments to support their argument that Section 110(2) required hearing the affected person before extension. However, post-amendment, the requirement was to record reasons in writing. The impugned order cited reasons for extension related to delays in investigation due to key persons being at large. The respondent argued that all necessary conditions were met for the extension.

The court analyzed the provisions of Section 110(2) and found that the Principal Commissioner of Customs had the discretion to extend the period by recording reasons in writing and informing the affected persons. The court noted that the petitioner was informed about the extension and that reasons were indeed recorded in the impugned communication. The recorded reasons were deemed relevant to the extension, focusing on delays in investigation due to key persons being unavailable.

Ultimately, the court held that the recorded reasons were sufficient, and there was no need to assess the sufficiency of reasons in discretionary jurisdiction. The writ petitions were disposed of accordingly, with the option for the petitioner to challenge the disposal of seized goods separately in accordance with the law.