9911796707
TMI Blog2020 (10) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... hich provided by Chapter V that the time limits under certain Indirect Tax Laws, including the Customs Act, which falls during the period from 20.03.2020 to 29.06.2020 or any date after 29.06.2020 shall stand extended to 30.06.2020 or such date afterwards as the Central Government may specify. Hence, the proceedings in the present case, which would have normally expired on 15.04.2020, stood automatically extended to 30.06.2020, which may not be very relevant for our purposes since already there was an extension granted on 11.03.2020. Further in this case, the Investigating Officer had considered a representation made by the appellants, though not statutorily provided for, as per the directions issued by this Court in Ext. P17 judgment. The representation as is revealed from Exhibits P17 and P18, urge that they were in possession of the goods validly and in compliance of statutory formalities. There was no contention as could be urged under Section 110 (1A); which were the aspects; then absent in the statute as highlighted by the Constitution Bench in I.J.Rao to find the requirement of hearing under the un-amended Proviso to Section 110(2). Admittedly the seizure was conducted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o consider the justifiability of the seizure; nor are we called upon to adjudicate the source or ownership of the seized gold. The appellants too are now concerned with only the confiscation and further investigation by the Customs Department. The appellants contend that, the period for issuance of notice for confiscation having expired; the seized gold has to be released and there could be no further proceedings continued. After the seizure a notice was required to be issued within six months as provided under the Customs Act, 1962 ['Customs Act' for brevity]. Though the period was extended there was no notice or hearing granted before the time was extended. 3. We have heard Sri.Asaf Ali learned Counsel appearing for the appellants, assisted by Sri.P.K.Sajeevan and Sri.P.Vijayakumar, learned Assistant Solicitor General of India, assisted by Ms.Krishna. 4. Sri.Asaf Ali would specifically refer to Exhibits P9 and P10 series of documents to contend that the source of the gold recovered is very evident. Reading Section 110(2) of the Customs Act, it is argued that the Hon'ble Supreme Court has specifically held that before extension of the time as per the proviso, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant, which itself throws suspicion on the source of the gold seized. It is specifically pointed out that the order passed on 11.03.2020 records the additional reason of the pandemic situation, which is unprecedented and ample reason by itself to extend the period as provided under Section 110. The amended provision does not call for any hearing and even if a hearing is found to be mandatory under the provision, it would be an empty formality in the wake of the unprecedented situation brought about due to the spreading virus. The judgment of a Division Bench of the Rajasthan High Court in D.B.Custom Appeal No.1/2019 and connected case dated 25.07.2019 [Commissioner of Customs (Preventive), Jodhpur v. Swees Gems And Jewellery] is also relied upon to contend that there is no requirement of a hearing as per the amended provisions. The learned Assistant Solicitor General seeks for dismissal of the appeal. 6. We are concerned only with the further proceedings carried out after the seizure was effected as per Exhibit P11. Immediately we have to notice that even if we find the impugned proceedings for extension to be bad, that does not vitiate the entire proceedings initiated und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall not apply. Before amendment, the proviso mandated that the extension for a period not exceeding six months shall be on sufficient cause being shown by the Principal Commissioner or the Commissioner of Customs. It is in this background that the Hon'ble Supreme Court in the decisions cited has stressed upon the requirement for a hearing as also the need to pass such order before the initial period of six months, as provided in sub-section (2), expires. 8. We will first deal with the contention of the audi alteram partem rule, being an essential concomitant of a judicial or even a quasi-judicial proceeding. S.N.Mukherji, citing a number of decisions, found that the concept of natural justice though was thought to have included only two rules that is (i) no man can be a judge of his own cause and (ii) none shall be judged without a proper hearing, is an ever expanding concept. In C.B.Gautam a Constitution Bench found that, Section 269UD of the Income Tax Act; dealing with compulsory purchase of a property on detection of an intended sale at a price far lower than the market value, despite not specifically providing for a hearing, the requirement has to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g in exercise of the power under the Proviso to Section 110(2). That aspect was examined more comprehensively, in the light of the prejudice and injury that may be caused to the person from whom the goods are seized. The possibility of the restoration being eminent in the context of the nature of goods being perishable, the jeopardy caused by reason of the prevailing market conditions changing, the goods being required urgently for a vocational or personal need or any other matter peculiar to the person or the goods, where aspects only the owner of the goods would be able to place before the Commissioner. However it was held that : But it will not be open to him to question whether the stage of the investigation, and the need for further investigation, call for an extension of time (sic-para 13) since the person from whom the goods are seized cannot be permitted to monitor the investigation. The opportunity afforded was held to be one limited to the 'pragmatic necessities of the case'(sic). It was also held that the initial period of six months and an extension by another six months was too short, but the Parliament had so fixed it only considering the hardship caused to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner to show sufficient cause, which meant that such cause had to be based on objective considerations. However, the amended provision merely requires the Commissioner to record the reasons in writing and inform the person from whom such good were seized before the expiry of the period so specified . In this court's considered view, the amended provision deliberately sought to overbear the previous view that a notice before extension was necessary. Now two conditions are to be satisfied: one, the Commissioner has to record his reasons in writing, why the extension is necessary, and two, inform the person from whom such good were seized before the expiry of the period so specified. The latter condition is equally important, in the opinion of this court, because it is a pre-requisite for the exercise of the power of extension. The pre-amended provision was silent on this aspect. 16. There are other reasons for this court to hold that the amendment brought about a radical change in the law. Parliament had knowledge - or is deemed to have knowledge of the existing state of law, which required notice, before extension. Therefore, the change of terminology is significant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rement to show sufficient cause for the purpose of extension. The decisions placed before us have specifically found that the requirement of a hearing has to be read into the proviso and in such circumstance a notice to the person from whom the goods were seized should be issued before the expiry of the initial six months. The Constitution Bench in I.J.Rao categorically held in Paragraph 14 that ...while notice is issued before the expiry of that period, service of such notice may not be affected on the person concerned in sufficient time to enable the Collector to make the order of extension before that period expires. Service of the notice may be postponed or delayed or rendered ineffective by reason of the person sought to be served attempting to avoid service of notice or for any other reason beyond the control of the customs authorities. In that event, it would be open to the Collector, if he finds that sufficient cause has been made out before him in that behalf to extend the time beyond the original period of six months, and thereafter, after notice has been served on the person concerned, to afford a post-decisional hearing to him in order to determine whether the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so arbitrary and perverse as to shock any reasonable mans conscience there can be no interference to the order passed as irrational. We have held that there is no illegality nor a procedural defect and the question now is only as to whether the reasons are sustainable or can be labelled as irrational. We have looked at Annexure R1(a) order passed by the Commissioner under the proviso to Section 110(2). The reasons stated are that due to the ingenious modus operandi practiced to evade duty, failure of the person from whose custody the goods were recovered to give proper explanation/proof for illicit possession, the quantum involved and also the nature of the investigation which involves inter-State accomplices; the investigation had proceeded only half-way. The Commissioner also has noticed the specific ground raised by the Investigating Officer as to a number of individuals summoned having intimated their inability to appear before the Investigating Officer due to the prevailing Covid pandemic. We are of the opinion that the reasons cited are not in any manner arbitrary or perverse and are rational enough to amply support the extension as sought for and granted. 17. We specifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be urged under Section 110 (1A); which were the aspects; then absent in the statute as highlighted by the Constitution Bench in I.J.Rao to find the requirement of hearing under the un-amended Proviso to Section 110(2). 20. There is one other allegation raised by the appellants that the order dated 11.03.2020 is one pre-dated after the initial period had expired. To substantiate the said contention, the appellants rely on Exhibit P18, the order passed by the Investigating Officer in compliance of Exhibit P17 judgment. The ground raised is that Exhibit P18 is dated 22.04.2020 and if Annexure R1(a) was issued on the date appearing on it, definitely there would have been a mention of the same in the order passed. At the outset we notice that the date 22.04.2020 is on the covering letter which forwarded the proceedings by which the representations were considered in compliance of the directions in Exhibit P17. The proceedings indicate the personal hearing having been conducted on 19.03.2020 and the order itself issued on 13.04.2020; before the expiry of the initial period provided under Section 110(2), which expires only on 15.04.2020. There was no reason why the order of extension ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
