1971 (7) TMI 60 - HC - Customs

Summary

Issues:
1. Seizure of gold by Customs Officers without serving notice under Section 124(a) of the Customs Act within 6 months.
2. Legality of extension of seizure period without hearing the petitioner.
3. Validity of show cause notice issued under Section 124 of the Customs Act.

Issue 1: The petitioner, a registered gold dealer, had gold ornaments seized by Customs Officers on suspicion of illicit importation. The petitioner argued that the seizure was illegal as no notice under Section 124(a) of the Customs Act was served within 6 months. The Customs Authorities extended the seizure period by two months without giving the petitioner an opportunity to be heard. The petitioner contended that the extension was illegal as it was done without a hearing.

Issue 2: The Court considered the legality of the extension of the seizure period without hearing the petitioner. The petitioner argued that the authorities must hear the parties before granting an extension under Section 110(2) of the Customs Act. Citing a Supreme Court judgment, the Court held that the petitioner had a vested right to reclaim the gold after 6 months, and this right could not be defeated by an ex parte extension order. The Court concluded that the extension without hearing the petitioner was illegal, directing the restoration of the seized gold.

Issue 3: The validity of the show cause notice issued under Section 124 of the Customs Act was challenged by the petitioner. The petitioner argued that the authorities had already made up their mind about the guilt of the petitioner before issuing the notice. The Court noted that the notice indicated a preconceived notion of guilt by stating that the gold was illicitly imported. Referring to a previous case, the Court held that the purpose of the notice was to provide an opportunity to prove legal importation, not to disprove a conclusion already reached. The Court quashed the show cause notice, emphasizing that the opportunity to show cause must be genuine and not a mere formality.

In conclusion, the Court ruled in favor of the petitioner on all issues. The extension of the seizure period without a hearing was deemed illegal, and the show cause notice was quashed due to the authorities' preconceived notion of guilt. The Court directed the restoration of the seized gold to the petitioner.