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TMI Blog1974 (8) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... was released on bail on March 7, 1970. He then learnt that the recovered G. C. notes were wrongly shown to be of Rs, 1,57,000/-, (hereinafter called the G. C. notes) instead of ₹ 1,74,000/-, and that the Police had planted on him 8 bars of gold weighing 10 tolas each (hereinafter called the gold), 10 kilograms of opium and had also planted an unlicensed pistol on the person of Sadhu Singh. On March 9, 1970, an officer of the Customs Department, Amritsar, moved an application to the Court of Magistrate First Class, Amritsar, for taking over the gold and the G. C. notes. The Magistrate directed the Police Authorities, by his order dated March 21, 1970, to hand over the gold and the G. C. notes to the Customs Department, and the said Department took the gold and G. C. notes from the Police, Amritsar, on March 28, 1970. Sadhu Singh was prosecuted under Section 25 of the Arms Act, but the said prosecution was withdrawn on March 20, 1971. The petitioner and Sadhu Singh were prosecuted under Section 9 of the Opium Act. The said prosecution was withdrawn as against Sadhu Singh, but permission to withdraw the case as against the petitioner was not allowed by the Court. He (the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case were admitted. It was, however, pleaded that the G. C. notes of ₹ 1,57,000/-and 8 bars of gold, weighing 80 tolas, had been recovered from the petitioner by the Police and that the aforesaid G. C. notes had been obtained by the Customs Department from the Police under orders of the Magistrate on March 28, 1970. It was further pleaded that on appeal against the acquittal of the petitioner, recorded in the opium case by the Magistrate, was admitted by this Court and the same is pending, and that the Income-tax Authorities had served a notice on the respondent, seizing the G. C. notes and other goods and, as such, the same could not be returned to the petitioner. So, all the reliefs claimed by the petitioner were resisted on the ground that the extension order was validly passed and the show cause notices bad been rightly given, and other proceedings relating to adjudication of confiscation of the G. C. notes etc. , and for imposition of personal penalty had been legally instituted. ( 4. ) The contentions raised by the learned counsel for the petitioner can be formulated as under: (1) That the extension order was passed without any notice to him and after the expiry o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the aforesaid period of six months may, on sufficient cause being shown, be extended by the Collector of Customs for a period not exceeding six months. (3) x x x x (4) x x x x The language of Sub-section (2) of Section 110 admits of no ambiguity and it prescribes the initial period of six months com mencing from the date of seizure of goods for the issuance of notice under Clause (a) of Section 124 of the Act. The proviso attached to Sub-section (2) of Section 110, how ever, provides that the said period of six months can be extended for a period not exceeding six months by the Collector of Customs on sufficient cause being shown to him. ( 6. ) The matters, that the initial period of six months, as prescribed by Sub-section (2) of Section 110 of the Act, has to be extended for a period not exceeding six months as contemplated by the proviso thereto, before the expiry of the said initial period, and that the said extension in time cannot be allowed mechanically but has to be allowed after affording due opportunity to the person from whose possession the goods have been seized, stand concluded by the judgment of the Supreme Court in The Assistant Collector of Customs, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od of six months up to March 27, 1971, is not valid for the obvious reason that it had been passed by him after the expiry of the initia) period of six months. Therefore, there is no escape from the conclusion that on account of expiry of the initial period of six months provided in Subsection (2) of Section 110 and the same having not been validly extended, a vested right had accrued to the petitioner to claim the return of the G. C. notes, which had been seized from his possession. It may be noted that the petitioner does not admit that the gold had been taken from his possession and he does not claim the return of the same. So, the first contention of the learned counsel for the petitioner is well-founded. ( 7. ) Shri Kuldip Singh, learned counsel for the respondent, argued that a notice under Section 132 of the Income-tax 'act, seizing the G. C. notes and the gold under Clause (iii) of the said section, had been served upon the respondent and, as such, he cannot return the G. C. notes to the petitioner. Under the provisions of Sub-section (2) of Section 110 of the Act, a vested right had accrued to the petitioner to claim the return of the G. C. notes, because no notice, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 of the Act requires that a notice, as required under Clause (a) of Section 124 of the Act, should be given to the person from whom goods had been seized, within a period of six months, and if such notice is not so given to him, the goods must be returned to him. The word 'return' would mean to pass back or to release the same from seizure. But it would not tantamount to cesser of the liability of the goods from confiscation under the provisions of the Act. Therefore, Subsection (2) of Section 110 of the Act, in my opinion, makes provision for curtailment of the period during which the seized goods can be retained for issuance of notice under Clause (a) of Section 124. Once the snid notice is issued within the period prescribed by Sub-section (2) only proviso thereto, of Section 110, the goods seized can be retained till the adjudication of the confiscation proceedings. So, the faliure on the part of the Customs officers to issue notice within the period contemplated by Sub-section (2) or proviso thereto, of Section 110, would certainly clothe the person, from whom the goods have been seized, with the right to claim the return of the same, but it does not, in my opinion, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extension had not been properly granted the appellant is entitled to the return of the goods. That by itself may not invalidate the notice itself. support the view that I have taken that seizure of goods under Sub-section (1) and return of tie same under Sub-section (2) of Section 110 are different from the issuance of show-cause notice for confiscation of goods or imposition of personal penalty as contemplated by Section 124 of the Act. The aforesaid decision of the Calcutta High Court was the subject of review by the Supreme Court in Charan Das Malhotra's case (AIR 1972 SC 689) (supra ). The decision of the Calcutta High Court was upheld by the Supreme Court and nothing was remarked against the aforesaid observations. It was rather observed there by the Supreme Court in the concluding portion of para 5 at page 690 that Section 124 does not lay down any period within which the notice required by it has to be given. The period laid down in Section 110 (2) affects only the seizure of the goods and not the validity of the notice. To confiscate' would mean to adjudge goods or property to be forfeited to the public domain and to deprive the owner of his right of ownership of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decision in the aforesaid letters patent appeal can be of no help to the petitioner. What would be the effect of adjudication of confiscation of goods after the return of the same to the owner or to the person from whose possession the same had been seized, is a matter which is besides the point. The possibility of non-availability of the goods after return of the same to the owner may not be excluded. The Collector may or may not be able to net the same after the adjudication of confiscation of goods when the same had been returned to the owner under Sub-section (2) of Section 110, but these considerations cannot, in my opinion, for the reason already recorded above, change or restrict the extent and scope of provisions of Section 124. Cash or G. C. notes, after return of the same to the owner under Sub-section (2) of Section 110, may or may not be available on recording of adjudication of confiscation of the same, but a car or any goods like that may be readily available for taking possession thereof after adjudication of confiscation of the same even though the same had to be returned under Sub-section (2) of Section 110. The provisions contained in subsection (2) of Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct to the powers of the Income-tax authorities to seize the same. I, however, find no merit in the writ petition respecting the other reliefs. Consequently, I partly allow this writ petition and quash the extension order whereby time was extended for issuing the show-cause notice, (Annexure P. 3) and direct the respondent to return the G. C. notes of ₹ 1,57,000/- to the petitioner, after notice to the Income-tax Department, Patiala, within one month from today. The respondent would inform the said Income-tax Department about the date and time to be fixed within one month from today when the aforesaid G. C. notes would be returned to the petitioner with intimation of the same to him (petitioner ). In case the Income-tax authorities still persist to seize the G. C. notes, they may do so subject to the powers available to them under law, in presence of the petitioner or his duly authorised agent, or even in his absence if the notice of the date and time for the return of the G. C. notes has been duly served upon him. The writ petition respecting the other reliefs, that is, quashing of the show-cause notices and prohibiting the respondent from proceeding with the adjudication of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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