2025 (2) TMI 812 - HC - Customs

Service of SCN - SCN not given within the stipulated time - Section 124(a) read with Section 110 (1) and (2) of the Customs Act 1962 - interpretation of the word given in relation to the issuance and service of the show cause notice within the statutory timeframe - simple argument made by learned counsel for the respondent is that since show cause notice was not served on the respondent within six months he was entitled to return of the goods - HELD THAT - The respondent became entitled to return of the seized goods on 4th October 2023. The appellant authorities did not release the goods. Now if as a subsequent event a confiscation order was passed that order would operate on the goods wherever they were situated. This subsequent confiscation order has got nothing to do with the cause of action involved in the writ petition and appeal. It is an independent right acquired by the appellant authorities to be exercised independently. The appellants are obliged to immediately return the goods to the respondent subject to the confiscation order. In other words even if it is assumed that by virtue of confiscation the ownership of the goods has been transferred to the appellants still its possession status quo ante which was to be with the respondent has to be restored until the confiscation order is enforced. Conclusion - The failure to serve a notice within the stipulated time requires the return of seized goods to the owner. The appellants are directed to return the seized gold to the respondent within four weeks of communication of this order - appeal disposed off.

The issues presented and considered in the Meghalaya High Court judgment are as follows:1. Whether the failure to serve a show cause notice within the stipulated time under Section 110(2) of the Customs Act, 1962, necessitates the return of seized goods to the owner.2. The interpretation of the term "given" in relation to the issuance and service of the show cause notice within the statutory timeframe.3. The impact of subsequent events, such as the passing of a confiscation order, on the ownership and possession of the seized goods.The detailed analysis of the identified issues is as follows:Issue 1:- Relevant legal framework and precedents: Sections 124(a), 110(1), and 110(2) of the Customs Act, 1962.- Court's interpretation and reasoning: The Court emphasized the strict statutory timeline for the issuance of a show cause notice and the return of seized goods if the notice is not "given" within the specified period.- Key evidence and findings: The show cause notice in this case was physically posted and delivered beyond the six-month period.- Application of law to facts: The failure to serve the notice within the statutory timeframe did not render the notice invalid, but the seized goods should have been returned.- Treatment of competing arguments: The argument of political unrest in Manipur affecting the timely issuance of the notice was considered but not accepted by the Court.- Conclusions: The Court held that the failure to serve the show cause notice within the stipulated time required the return of the seized goods to the owner.Issue 2:- Relevant legal framework and precedents: Interpretation of the term "given" in Section 110(2) based on legal precedents.- Court's interpretation and reasoning: The Court relied on previous judgments to define "giving notice" as proper service physically or electronically on the owner of the goods within the statutory timeframe.- Key evidence and findings: The show cause notice in this case was issued within six months but physically delivered beyond that period.- Application of law to facts: The Court concluded that the notice was not "given" within the statutory timeframe, requiring the return of the seized goods.- Conclusions: The Court affirmed that the ownership and possession of the goods should be restored to the respondent.Issue 3:- Relevant legal framework and precedents: Impact of subsequent events, such as the passing of a confiscation order, on the possession and ownership of seized goods.- Court's interpretation and reasoning: The Court clarified that subsequent events, like a confiscation order, do not affect the obligation to return the goods if the notice was not served within the statutory timeframe.- Key evidence and findings: A confiscation order was passed after the failure to return the goods to the respondent.- Application of law to facts: The Court held that the confiscation order did not alter the obligation to return the goods to the respondent.- Conclusions: The Court directed the immediate return of the seized goods to the respondent, regardless of the subsequent confiscation order.Significant holdings:- The Court emphasized the strict adherence to statutory timelines for the issuance and service of show cause notices under the Customs Act, 1962.- The Court clarified that the failure to serve a notice within the stipulated time requires the return of seized goods to the owner.- The Court directed the appellants to return the seized gold to the respondent within a specified timeframe, irrespective of subsequent events like a confiscation order.In conclusion, the Meghalaya High Court judgment focused on the strict interpretation of statutory timelines for the issuance of show cause notices and the return of seized goods, emphasizing the importance of timely compliance with procedural requirements under the Customs Act, 1962.

← Previous Next →