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TMI Blog1992 (12) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... having regard to the provisions of Section 79 of the Gold (Control) Act, 1968, the failure to issue a valid notice under Section 79 of the Act within the period prescribed by law would only entitle the person from whose custody the goods are seized, to the return of those goods, or whether, having regard to the proviso to Section 79, no proceeding for confiscation and imposition of penalty can be taken, and no show-cause notice for the confiscation of the goods and imposition of penalty can thereafter be issued? The questions as aforesaid arose in the course of hearing of a series of writ appeals and writ petitions referred to in the referral order. As we see from the order of reference a contention appears to have been taken that in the absence of service of a valid notice under Sec. 110 of the Customs Act, within the time prescribed by law, on the person concerned, not only the goods seized would have to be returned but the entire proceedings relating to confiscation and penalty would come to nought. Similar was the contention taken with reference to Section 79 of the Gold (Control) Act, 1968. 2. We have heard learned senior counsel Mr. Vaidyanathan, of the Supreme Court Bar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s or to impose a penalty; (b) is given an opportunity of making a representation in writing within such reasonable time as may be specified in the notice against the grounds of confiscation or imposition of penalty mentioned therein; and (c) is given a reasonable opportunity of being heard in the matter." The relevant section in the Gold Control Act is Sec. 79. It reads: "Giving of an opportunity to the owner of gold, etc. - No Order of adjudication of confiscation or penalty shall be made unless the owner of the gold, conveyance, or animal or other person concerned is given a notice in writing - (i) informing him of the grounds on which it is proposed to confiscate such gold, conveyance or animal or to impose penalty; and (ii) giving him a reasonable opportunity of making a representation in writing within such reasonable time as may be specified in the notice against the confiscation or imposition of penalty mentioned therein and, if he so desires, of being heard in the matter: Provided that the notice and the representation referred to in this section may, at the request of the owner or other person concerned, be oral: Provided further that where no such notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 extension should be cancelled or not. Having regard to the seriousness and the magnitude of injury to the public interest in the case of the illicit importation of goods, and having regard to considerations of the damage to economic policy underlying the formulation of import and export planning, it seems necessary to reconcile the need to afford an opportunity to the person affected with the larger considerations of public interest." We notice the final order made in that case was as follows : In our opinion, the person from whose possession the goods have been seized is entitled to notice of the proposal before the Collector of Customs for the extension of the original period of six months mentioned in S. 110(2) of the Customs Act, and he is entitled to be heard upon such proposal but subject to the restrictions referred to earlier in regard t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in I.J. Rao v. Bibhuti Bhushan Bagh (A.I.R. 1989 S.C. 1884) concluded this controversy by pointing out Malhotra's case only decided the need to issue notice to the affected person when the time prescribed for notifying the person whose goods are seized had lapsed but even so the Collector acting under Sec. 110(2) of the Customs Act intends to extend the time contemplated under Sec. 110(2). 6. Mr. Shilendra Kumar, learned Sr. Standing Counsel for the Central Government invited our attention to a later Bench decision of the Supreme Court in Chaganlal Gainmull v. Collector of Central Excise and Others, 1990 (Supp.) Supreme Court Cases 527 in which after considering the decision in Malhotra's case the court had laid down that the default, if any, in not issuing the show-cause notice within the prescribed time would only result in the seized goods being returned to the owner thereof and it would not further result in the adjudication proceedings themselves standing annulled. That was again a case in which adjudication proceedings were assailed on the ground that the show-cause notice contemplated under Sec. 110(2) of the Customs Act had not been issued within the time prescribed by l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 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, (emphasis supplied) The delay beyond six months in the issue of the show cause notice goes to and affects the power to detain the seized goods beyond six months and does not denude the adjudicating authority of the power to initiate proceedings even thereafter." The above decision of the Supreme Court, brings to an end and gives a quietus to the controversy as to whether adjudication proceedings could be carried on even after the expiry of the period prescribed under Sec. 110(2) of the Act. Mr. Vaidyanathan pointed out that in Gainmull's case[1990 (Supp.) Supreme Court Cases 527] the decision in I.J. Rao's case (A.I.R. 1989 S.C. 1884) was not noticed at all and, therefore, contends that the ratio of the decision in Gainmull's case is somewhat weakened. This is not an aspect on which we perhaps can comment. However, it behoves on our part to state that neither in I.J. Rao's case nor in Gainmull's case the Supreme Court had held that non-issuance of notice within the period enjoi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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