2013 (9) TMI 179 - HC - Customs

Return of one Container Revenue seized the container - the petitioner sought provisional release of goods which was allowed but the petitioner had not sought the release of goods on account of the onerous conditions imposed for the provisional release of goods - Held that - The petitioner cannot be denied the right to possess goods for the inefficiency or in action of the revenue for a period of more than one year - There was no merit in the arguments raised by the revenue - Mere fact that show cause notice had been issued after the filing of the present petition will not defeat the right of the petitioner to seek release of goods. A plain and combined reading of Sections 110(2), 124 and 110A spells out that any order for provisional release shall not take away the right of the assessee under Section 110(2) read with Section 124 of the Act - where no action was initiated by way of issuance of show cause notice under Section 124(a) of the Act within six months or extended period stipulated under Section 110(2) of the Act, the person from whose possession the goods were seized becomes entitled to their return - The remedy of provisional release was independent of remedy of claiming unconditional release in the absence of issuance of any valid show cause notice during the period of limitation or extended limitation prescribed under Section 110(2) of the Act - Keeping in view the judgement of Jayant Hansraj Shah Vs. Union of India 2008 (2) TMI 293 - HIGH COURT BOMBAY examining the provisions of Section 110(2) of the Act the appeal was allowed.

Summary

Issues:
Claim for writ of mandamus to return a container seized by Directorate of Revenue Intelligence (DRI) at Inland Container Depot, Ballabgarh, Faridabad based on the petitioner filing a bill of entry dated 01.06.2011. Dispute regarding the release of goods under Section 110 and 124 of the Customs Act, 1962. Interpretation of the right to seek release of goods in light of the issuance of a show cause notice after the filing of the petition.

Analysis:
The petitioner sought a writ of mandamus to direct the respondents to return a container seized by the DRI at Inland Container Depot, Ballabgarh, Faridabad, based on the petitioner filing a bill of entry dated 01.06.2011. The petitioner claimed that under Section 110 of the Customs Act, 1962, authorities have the right to seize goods if they believe the goods are liable for confiscation. If goods are seized and no notice is issued within six months under Section 110(2), the goods must be returned to the person from whose possession they were seized. A show cause notice under Section 124 of the Act was issued on 19.09.2012. The petitioner argued that failure to issue a notice within the stipulated time entitles the release of seized goods.

The respondents contended that the issuance of a show cause notice after the filing of the petition does not entitle the petitioner to seek the release of goods. They relied on a Supreme Court judgment stating that certain rights, like bail, are enforceable only within specific periods. However, the petitioner cited various judgments, including a Supreme Court case and High Court judgments, supporting the immediate return of goods if no show cause notice is issued within the prescribed time. The petitioner argued that the right to possess goods cannot be denied due to the revenue's inaction for an extended period.

The High Court analyzed the provisions of Section 110(2) of the Act and relevant case law. Referring to previous judgments, the Court held that the right to claim release of goods is not defeated by the issuance of a show cause notice after the petition is filed. The Court emphasized that the interpretation of the Act itself prevails over judgments related to different statutes. Therefore, the petitioner was granted the right to possess the goods seized for over a year due to the inefficiency or inaction of the revenue. Consequently, the Court allowed the petition and directed the respondents to release the seized goods in accordance with the law.