Mihir Maheshkumar Chevli V. Union of India

SCA/3547/2021

AI Insights

The case involves Mihir Maheshkumar Chevli, the sole proprietor of J B M Textiles, who filed a petition under Article 226 of the Constitution of India against the Union of India and other respondents following the seizure of cash and electronic devices from his business premises by the Directorate of Revenue Intelligence (DRI). The seizure occurred on April 3, 2019, based on intelligence reports of illegal export activities. The petitioner contended that the seizure was unlawful as the statutory period for issuing a show cause notice under the Customs Act, 1962, had expired without any such notice being issued. The respondents argued that the seizure was part of a larger investigation into fraudulent export benefits availed by several firms, including the petitioner's.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 802087 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 18-02-2022
• Assessment Year: misc
• Other Referred Cases: Dipak Natwarlal Soni vs. Union of India, Assistant Collector of Customs vs. Charan Das Malhotra, Purushottam Jajodia vs. Director of Revenue Intelligence, New Delhi, New Drug Y Chemical Co. vs. Union of India, K. Abdulla Kunhi Abdul Rahaman vs. Union of India, Deepak Natwarlal Soni vs. Union of India, Jatin Ahuja vs. Union of India, Kore Concepts vs. Deputy Commissioner of Customs (SII B)
• Laws Referred To: Customs Act, 1962
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: PRIYANK LODHA
• Assessee Lawyers: S S IYER
• Keywords: Customs Act; IGST refund; Illegal export; Seizure; Show cause notice
• Section: 153; 110(2); 124; 226

Judgement Text

"C/SCA/3547/2021 JUDGMENT DATED: 18/02/2022 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 3547 of 2021 FOR APPROVAL AND SIGNATURE: HONOURABLE MS. JUSTICE SONIA GOKANI and HONOURABLE MR. JUSTICE HEMANT M. PRACHCHHAK ========================================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ? NO 2 To be referred to the Reporter or not ? NO 3 Whether their Lordships wish to see the fair copy of the judgment ? NO 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India or any order made thereunder ? NO ========================================================== MIHIR MAHESHKUMAR CHEVLI Versus UNION OF INDIA ========================================================== Appearance: MR. S S IYER(6553) for the Petitioner(s) No. 1 NOTICE SERVED for the Respondent(s) No. 1,2 PRIYANK P LODHA(7852) for the Respondent(s) No. 3,4 ========================================================== CORAM: HONOURABLE MS. JUSTICE SONIA GOKANI and HONOURABLE MR. JUSTICE HEMANT M. PRACHCHHAK Date : 18/02/2022 ORAL JUDGMENT (PER : HONOURABLE MS. JUSTICE SONIA GOKANI) 1 . T h i s i s a p e t i t i o n p r e f e r r e d u n d e r A r t i c l e 2 2 6 o f t h e C o n s t i t u t i o n o f I n d i a . Page 1 of 33 C/SCA/3547/2021 JUDGMENT DATED: 18/02/2022 2 . B r i e f f a c t s l e a d i n g t o t h e p r e s e n t p e t i t i o n a r e a s f o l l o w : 2 . 1 T h e p e t i t i o n e r i s a s o l e p r o p r i e t o r o f J B M T e x t i l e s , S u r a t a n d i s e n g a g e d i n t h e b u s i n e s s o f t e x t i l e t r a d i n g a n d e x p o r t . T h e D i r e c t o r a t e o f R e v e n u e I n t e l l i g e n c e ( ‘ t h e D R I ’ h e r e i n a f t e r ) , A h m e d a b a d Z o n a l U n i t , A h m e d a b a d h a d , o n r e c e i p t o f i n t e l l i g e n c e , s e a r c h e d t h e o f f i c e p r e m i s e o f t h e p e t i t i o n e r o n d a t e d 0 3 . 0 4 . 2 0 1 9 w h e r e t h e c a s h a m o u n t o f R s . 6 4 , 8 6 , 1 0 0 / - b e l o n g i n g t o t h e p e t i t i o n e r a n d h i s f a m i l y m e m b e r s , t w o m o b i l e p h o n e s a n d t w o f i l e s c o n t a i n i n g b u s i n e s s d o c u m e n t s a l s o w e r e s e i z e d b y t h e o f f i c e r s . P a n c h n a m a w a s d r a w n o n s e i z u r e b y t h e o f f i c e r s w h e r e t h e s i g n a t u r e o f t h e p e t i t i o n e r w a s t a k e n o n 0 3 . 0 4 . 2 0 1 9 w h i c h a s Page 2 of 33 C/SCA/3547/2021 JUDGMENT DATED: 18/02/2022 e x p l a i n e d b y h i m , w a s a f o r c i b l e a c t t h r u s t u p o n h i m b y t h e r e s p o n d e n t s . 2 . 2 T h e s t a t e m e n t o f t h e p e t i t i o n e r w a s r e c o r d e d o n 0 4 . 0 4 . 2 0 1 9 , a f t e r t h e p a n c h n a m a p r o c e e d i n g s d a t e d 0 3 . 0 4 . 2 0 1 9 . T h e r e w a s n o p r o p o s a l f o r c o n f i s c a t i o n o f s e i z e d c a s h o f R s . 6 4 , 8 6 , 1 0 0 / - a n d a l s o o f m o b i l e p h o n e s , c o m p u t e r a n d d o c u m e n t s s e i z e d d u r i n g t h i s p r o c e e d i n g . 2 . 3 A s h o w c a u s e n o t i c e c a m e t o b e i s s u e d o n 2 7 . 1 1 . 2 0 2 0 i n r e s p e c t o f t h e a l l e g e d i l l e g a l e x p o r t b y o n e M / s . A m i r a I m p e x i n c o n n i v a n c e o f n u m b e r o f o t h e r p e r s o n s w h i c h i n c l u d e d t h e p e t i t i o n e r , a s a l l e g e d b y t h e r e s p o n d e n t s . T h i s s h o w c a u s e n o t i c e w a s r e c e i v e d b y t h e p e t i t i o n e r o n 1 4 . 1 2 . 2 0 2 0 . Page 3 of 33 C/SCA/3547/2021 JUDGMENT DATED: 18/02/2022 2 . 4 A s a v e r r e d b y t h e p e t i t i o n e r , 2 1 m o n t h s e l a p s e d a f t e r t h e s e i z u r e . N o n o t i c e s i n c e h a d b e e n i s s u e d w i t h i n a p e r i o d o f s i x m o n t h s a s s t a t u t o r i l y p r e s c r i b e d f r o m d a t e o f t h e s e i z u r e , t h e s e i z e d c a s h a n d m o b i l e p h o n e s w e r e n e e d e d t o b e r e t u r n e d t o t h e p e t i t i o n e r a n d h i s f a m i l y , h e n c e , t h i s p e t i t i o n . 3 . T h i s C o u r t a t t h e t i m e o f i s s u a n c e o f n o t i c e p a s s e d t h e f o l l o w i n g o r d e r o n 2 2 . 0 2 . 2 0 2 1 : “1. By way of the present petition, preferred under Article 226 of the Constitution of India, the petitioner seeks Writ of Mandamus or any other appropriate writ for return of the seized cash amount Rs.64,86,100/-, which according to him belongs to his family and himself, for which, substantiating documents including of the Income Tax Returns are already brought on the record with following prayers: “17. A. This Hon'ble Court may be pleased to hold that the impugned panchnama proceedings dated Page 4 of 33 C/SCA/3547/2021 JUDGMENT DATED: 18/02/2022 03.04.2019 as well as the non-return of the seized currency of Rs.64,86,100/- (Rupees Sixty Four lakhs Eighty Six thousand and Hundred only) belonging to the petitioner and his family members, seized two mobile phones, computer and documents after expiry of the statutory period of six months provided in section 110(2) of the Customs Act, 1962 is ex-facie illegal, non-est and ab initio void due to violation statutory provisions in Section 110 and other provisions of the Customs Act, 1962 as interpreted by the Courts of law in respect of return of seized currency, mobile phones, computer and documents lying with the authorities without issue of show cause notice within the period prescribed in said section; B. That this Hon'ble Court may be pleased to hold that the seized currency amounting to Rs.64,86,100/- (Rupees Sixty Four lakhs Eighty Six thousand and Hundred only), two mobile phones, computer and seized documents contained in two files be returned to the petitioner forthwith by the Respondent No.3 and Respondent No.4 herein; C. That this Hon'ble Court may be pleased to issue a writ of mandamus or in the nature of mandamus or any other writ, order or direction quashing and setting aside the impugned seizure and continued retention of the currency and two mobile phones Page 5 of 33 C/SCA/3547/2021 JUDGMENT DATED: 18/02/2022 through panchnama proceedings dated 03.04.2019 for the period beyond the expiry of six months, that is, beyond 03.10.2019 without issue of show cause notice under section 124 of the Customs Act, 1962 as lacking in jurisdiction, harsh, unfair, illegal, absurd and therefore non-est with consequential relief to the petitioner as per Prayer-B above; D. That this Honourable Court may be pleased to grant ad-interim and interim reliefs in terms of prayers (C) above pending admission, hearing and final disposal of this Special Civil Application; E. For award of the costs of this Petition; F. For such other and further or incidental reliefs as may be deemed just and proper in the facts and circumstances of the present case may kindly be granted.” 2. We have heard the learned advocate, Mr.S.S.Iyer, who has taken us through the various correspondences and has urged that under Section 110 of the Customs Act, 1962; the six month's period after the Seizure Panchnama on 3.4.2019 is also over on 3.4.2020 and there is not a whisper of the seized currency notes in the show cause notice dated 27.11.2020. His correspondence also has not been responded so far as this pertinent issue is concerned. According to him, it is a covered matter as in the case of Page 6 of 33 C/SCA/3547/2021 JUDGMENT DATED: 18/02/2022 Dipak Natwarlal Soni reported in 2019 (368) E.L.T. 27 (Gujarat). 3. Issue Notice for final disposal, returnable on 8.3.2021. Over and above the regular mode of service, service through e-Mode is additionally permitted.” 4 . I n r e p l y t o t h e s h o w c a u s e n o t i c e , t h e r e s p o n d e n t s a p p e a r e d a n d t h e i r r e p l y h a s a l s o b e e n t e n d e r e d b e f o r e t h i s C o u r t . 4 . 1 . I n t h e a f f i d a v i t - i n - r e p l y , i t h a s b e e n d e n i e d t h a t t h e r e h a s b e e n a n y v i o l a t i o n o f t h e p r o v i s i o n o f l a w . A c c o r d i n g t o t h e r e s p o n d e n t s , s i n c e i t i s a c a s e o f a l a r g e s c a l e i l l e g a l a v a i l m e n t o f t h e e x p o r t b e n e f i t s , n o i n d u l g e n c e i s n e c e s s a r y . I t i s a l s o c o n t e n d e d b y t h e r e s p o n d e n t s t h a t s p e c i f i c i n f o r m a t i o n h a d b e e n r e c e i v e d b y t h e D R I , A h m e d a b a d t h a t c e r t a i n e x p o r t f i r m s w e r e w r o n g l y a v a i l i n g e x p o r t b e n e f i t s i n c l u d i n g I G S T r e f u n d o n Page 7 of 33 C/SCA/3547/2021 JUDGMENT DATED: 18/02/2022 t h e b a s i s o f b o g u s / o v e r v a l u e d e x p o r t s , t h e r e f o r e , t h e o p e r a t i o n h a d b e e n c a r r i e d o u t a t t h e p r e m i s e o f S h r i K u b e r j i T e x t i l e s P a r k b y a j o i n t t e a m o f D R I a n d D i r e c t o r a t e o f G e n e r a l o f G o o d s a n d S e r v i c e T a x I n t e l l i g e n c e , A h m e d a b a d ( D G G I ) a n d t h e p a n c h n a m a h a d b e e n d r a w n i n p r e s e n c e o f t h r e e p e r s o n s n a m e l y S h r i M i h i r M a h e s h C h e v l i , M r . A m i t D o c t o r a n d M r . A a z a m S a b u w a l a . T h e y j o i n t l y o p e r a t e d d i f f e r e n t f i r m s w h i c h i n c l u d e d e i g h t f i r m s a n d t h o s e p e r s o n s h a d a d m i t t e d t h a t t h e y w e r e n o t p r o p r i e t o r s / p a r t n e r s / d i r e c t o r s o f a n y o f t h e f i r m s . 4 . 2 T h e I n d i a n c u r r e n c y n o t e s t o t a l i n g R s . 1 , 0 0 , 8 5 , 1 0 0 / - h a d b e e n s e i z e d o u t o f w h i c h R s . 6 4 , 8 6 , 1 0 0 / - i s c l a i m e d b y S h r i A m i t D o c t o r . T h e s e t h r e e p e r s o n s w e r e Page 8 of 33 C/SCA/3547/2021 JUDGMENT DATED: 18/02/2022 g e t t i n g c o m m i s s i o n f r o m t h i r d p a r t y e x p o r t i n E x p o r t P r o m o t i o n C a p i t a l G o o d s ( E P C G ) S c h e m e i n c a s h . T h e y a r r a n g e d i n v o i c e s i n t h e n a m e o f e x p o r t f i r m , b u t n o g o o d s w e r e p h y s i c a l l y r e c e i v e d u n d e r t h e s a i d d o c u m e n t s a n d t h e y m a d e p a y m e n t t o w a r d s t h i s s a i d s u p p l y o n p a p e r f r o m t h e a c c o u n t o f t h e r e s p e c t i v e e x p o r t f i r m s a n d t h e m o n e y w e r e r e t u r n e d b a c k t o t h e m b y t h e r e s p e c t i v e s u p p l i e r i n c a s h o r b y m i d d l e m a n t h r o u g h w h o m t h e s a i d b i l l s w e r e a r r a n g e d . T h e c a s h a m o u n t r e c e i v e d b y t h e m w e r e i n t h e f o r m c o m m i s s i o n f r o m t h e t h i r d p a r t y e x p o r t i n E P C G S c h e m e a n d t h e m o n e y r e t u r n e d b a c k b y t h e s u p p l i e r o n p a p e r . A s n o p r o p e r a n d s a t i s f a c t o r y r e p l y w a s r e c e i v e d d u r i n g t h e s e a r c h , t h e D I R a n d D G G I o f f i c e r s h a d d e t a i n e d t h e c a s h f o r f u r t h e r v e r i f i c a t i o n . S t a t e m e n t s w e r e a l s o Page 9 of 33 C/SCA/3547/2021 JUDGMENT DATED: 18/02/2022 r e c o r d e d u n d e r S e c t i o n 1 0 8 o f t h e C u s t o m s A c t , 1 9 6 2 ( ‘ t h e A c t ’ h e r e i n a f t e r ) a n d t h e m o d u s o p e r a n d i h a s b e e n e x p l a i n e d b y t h o s e p r e s e n t . 4 . 3 T h e a m o u n t , a c c o r d i n g t o t h e r e s p o n d e n t s , w h i c h h a s b e e n c l a i m e d b y S h r i A m i t D o c t o r w a s t h e a m o u n t o f I G S T r e f u n d , w h i c h w a s f r a u d u l e n t l y a v a i l e d a n d t h a t n e e d e d t o b e t r e a t e d a s E P C G c o m m i s s i o n i n c o m e a n d w a s l i a b l e t o b e t a x e d u n d e r t h e G S T A c t . B o t h t h e i n c o m e o f E P C G c o m m i s s i o n a n d I G S T r e f u n d w e r e r e c e i v e d i n c a s h c o v e r e d u n d e r t h e G S T L a w . T h e s t a t e m e n t s r e c o r d e d o f t h e p e t i t i o n e r a n d o t h e r a r e c o n t e n d e d t o b e v o l u n t a r y w i t h o u t a d o p t i n g a n y c o e r c i v e m e a s u r e . A l l e g a t i o n o f f o r c e o n e x p i r y o f 2 1 m o n t h s i s a f t e r t h o u g h t o n t h e p a r t o f t h e p e t i t i o n e r . E m p h a t i c a l l y Page 10 of 33 C/SCA/3547/2021 JUDGMENT DATED: 18/02/2022 f u r t h e r c o n t e n d e d t h a t D R I a n d D G G I a r e o r g a n i z a t i o n a l s t r u c t u r e o f C e n t r a l B o a r d o f I n d i r e c t T a x e s a n d C u s t o m s . T h e c a s h s e i z e d i s a m o u n t o f c o m m i s s i o n a n d I G S T r e f u n d w r o n g l y a v a i l e d . D G G I i s c l a i m e d t o b e t h e p r o p e r a u t h o r i t y t o a p p r o p r i a t e t h e s a i d a m o u n t a g a i n s t t h e I G S T r e f u n d w r o n g l y a v a i l e d a n d t h e c a s h w a s t r a n s f e r r e d t o D G G I , A h m e d a b a d a s t h e t o t a l I G S T r e f u n d w r o n g l y a n d i l l e g a l l y a v a i l e d i s o f t h e t u n e o f R s . 3 , 2 7 , 6 1 , 2 9 5 / - , w h i c h i s a l l e g e d t o b e a g r a v e e c o n o m i c o f f e n c e a n d h e n c e , r e q u e s t i s n o t t o i n t e r f e r e . 5 . T h e l e a r n e d a d v o c a t e , M r . S . S . I y e r f o r t h e p e t i t i o n e r a n d l e a r n e d s e n i o r s t a n d i n g c o u n s e l , M r . P r i y a n k L o d h a f o r t h e r e s p o n d e n t s - d e p a r t m e n t h a v e b e e n h e a r d e x t e n s i v e l y . Page 11 of 33 C/SCA/3547/2021 JUDGMENT DATED: 18/02/2022 6 . T h e s h o r t q u e s t i o n f o r c o n s i d e r a t i o n i s a s t o w h e t h e r t h e s h o w c a u s e n o t i c e g i v e n u n d e r S e c t i o n 1 2 4 o f t h e A c t a f t e r s i x m o n t h s o f s e i z u r e c a n b e s u s t a i n e d u n d e r t h e l a w . 7 . T h e c h a l l e n g e m a d e i s a l s o t o t h e a l l e g e d a r b i t r a r y a c t i o n o n t h e p a r t o f t h e r e s p o n d e n t s - a u t h o r i t y i n r e t a i n i n g t h e c a s h a m o u n t o f R s . 6 4 , 8 6 , 1 0 0 / - a l o n g w i t h t w o m o b i l e p h o n e s a n d o t h e r m a t e r i a l s e i z e d f r o m t h e o f f i c e o f t h e p e t i t i o n e r o n 0 3 . 0 4 . 2 0 1 9 . T h e s e i z u r e o f g o o d s a n d t h e c a s h b y t h e r e s p o n d e n t s i s u n d e r s e c t i o n 1 1 0 o f t h e C u s t o m s A c t a n d S e c t i o n 1 2 4 o f t h e A c t p r o v i d e s f o r t h e s h o w c a u s e n o t i c e t o b e i s s u e d f o r t h e c o n f i s c a t i o n o f t h e g o o d s . Page 12 of 33 C/SCA/3547/2021 JUDGMENT DATED: 18/02/2022 7 . 1 T h e k e y c o n t e n t i o n r a i s e d b y t h e p e t i t i o n e r i s t h a t t h e r e s p o n d e n t s - a u t h o r i t y h a s n o t f o l l o w e d t h e m a n d a t e p r o v i d e d u n d e r S u b - s e c t i o n ( 2 ) o f S e c t i o n 1 1 0 o f t h e A c t t h a t t h e g o o d s s e i z e d u n d e r S u b - s e c t i o n ( 1 ) o f S e c t i o n 1 1 0 o f t h e A c t s h a l l n e e d t o b e r e t u r n e d t o t h e p e r s o n f r o m w h o m t h e y w e r e s e i z e d . A s p r o v i d e d u n d e r S u b - s e c t i o n ( 2 ) o f S e c t i o n 1 1 0 o f t h e A c t , i f n o s h o w c a u s e n o t i c e i s g i v e n u n d e r c l a u s e ( a ) o f S e c t i o n 1 2 4 o f t h e A c t i n r e s p e c t o f s u c h g o o d s , c a s h a n d t h e a r t i c l e s w i t h i n s i x m o n t h s o f t h e s e i z u r e o f t h e g o o d s , t h e s a m e n e e d s t o b e r e f u n d e d t o t h e p e r s o n f r o m w h o m t h e y a r e s e i z e d . 7 . 2 T h e a m e n d m e n t i n t h e F i n a n c e A c t , 2 0 1 8 p r o v i d e d t h a t t h e s u f f i c i e n t c a u s e b e i n g s h o w n , s u c h p e r i o d c o u l d b e e x t e n d e d Page 13 of 33 C/SCA/3547/2021 JUDGMENT DATED: 18/02/2022 b y t h e P r i n c i p a l C o m m i s s i o n e r o f C u s t o m s o r C o m m i s s i o n e r o f G o o d s f o r a p e r i o d n o t e x c e e d i n g s i x m o n t h s . 7 . 3 S e c t i o n 1 2 4 o f t h e A c t p r o v i d e s t h a t n o o r d e r o f c o n f i s c a t i o n o f a n y g o o d s o r i m p o s i n g o f p e n a l t y o n a n y p e r s o n i s t o b e m a d e u n d e r C h a p t e r X I V , u n l e s s t h e n o t i c e h a s b e e n s e r v e d u p o n t h e p e r s o n w h o i s t h e o w n e r o f t h e g o o d s , i n w r i t i n g w i t h p r i o r a p p r o v a l o f t h e o f f i c e r o f c u s t o m s n o t b e l o w t h e r a n k o f a n A s s i s t a n t C o m m i s s i o n e r o f C u s t o m s i n f o r m i n g t h e g r o u n d s o n w h i c h i t i s t o b e c o n f i s c a t e d o r f o r i m p o s i t i o n o f p e n a l t y . 7 . 4 T h e m o d e o f s e r v i c e o f n o t i c e p r i o r t o t h e a m e n d m e n t b y F i n a n c e A c t , 2 0 1 8 i n c l u d e d t h e s u m m o n s o r n o t i c e i s s u e d u n d e r S e c t i o n 1 5 3 o f t h e A c t . T h i s C o u r t ( C o r a m : J u s t i c e Page 14 of 33 C/SCA/3547/2021 JUDGMENT DATED: 18/02/2022 A n a n t S . D a v e & J u s t i c e B i r e n V a i s h n a v ) i n c a s e o f D e e p a k N a t v a r l a l S o n i v s . U n i o n o f I n d i a , r e p o r t e d i n 2 0 1 9 ( 3 6 8 ) E L T 2 7 ( G u j . ) w a s c o n s i d e r i n g t h e s i m i l a r i s s u e a n d a d d r e s s e d t h i s q u e s t i o n o f i s s u a n c e o f t h e n o t i c e a s e n v i s a g e d u n d e r S e c t i o n 1 1 0 ( 2 ) v i s - a - v i s S e c t i o n 1 2 4 a n d S e c t i o n 1 5 3 w h i c h i s n o l o n g e r r e s i n t e g r a . A f t e r a d e t a i l e d d i s c u s s i o n , i t h a d b e e n h e l d t h a t t h e a c t i o n o f r e s p o n d e n t s - a u t h o r i t y i n n o t r e t u r n i n g t h e g o o d s s e i z e d u p o n f a i l u r e t o c o m p l y w i t h S e c t i o n s 1 1 0 ( 2 ) , 1 2 4 a n d 1 5 3 o f t h e A c t , i s i l l e g a l a n d t h e w r i t p e t i t i o n w a s a l l o w e d b y d i r e c t i n g t h e r e s p o n d e n t s t o r e t u r n a l l g o l d o r n a m e n t s / g o l d i t e m s a n d t w o a p p l e I - p h o n e s s e i z e d u n d e r p a n c h n a m a t o t h e p e t i t i o n e r w i t h i n a s p e c i f i e d p e r i o d u n c o n d i t i o n a l l y s u b j e c t t o a d j u d i c a t i o n Page 15 of 33 C/SCA/3547/2021 JUDGMENT DATED: 18/02/2022 p r o c e s s t o b e c a r r i e d o u t a f r e s h i n a c c o r d a n c e w i t h l a w . 7 . 5 T h e r e l e v a n t p a r a g r a p h s w i l l b e p r o f i t a b l y r e p r o d u c e d : “9. Having heard learned counsels appearing for the parties, at the outset, outcome of adjudication proceedings resulting into finality with regard to subject seizure of goods at the end of competent authority, no record is produced and no affidavit is filed in this regard. The issue about giving notice so envisaged under Section 110 (2)of the Customs Act, 1962 vis-a-vis Section 124 and Section 153 is no more res integra. For better appreciation and above provisions of Customs Act, 1962 we produce herein below such provisions governing seizure in the year 2017 that is before amendment carried out by Finance Act, 2018. “110. Seizure of goods, documents and things.-(1) If the proper officer has reason to believe that any goods are liable to confiscation under this Act, he may seize such goods : Provided that where it is not practicable to seize any such goods, the proper officer may serve on the owner Page 16 of 33 C/SCA/3547/2021 JUDGMENT DATED: 18/02/2022 of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer. (1A) xxx (1B) xxx (a) …. (b) …. (c) …. (1C) xxx (2) Where any goods are seized under subsection (1) and no notice in respect thereof is given under clause (a) of section 124 within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized” {Provided that the aforesaid period of six months may, on sufficient cause being shown, be extended by the Principal Commissioner of Customs or Commissioner or Customs for a period not exceeding six months.} (3) xxx (4) xxx Section 124. Issue of show cause notice before confiscation of goods, etc.-No order confiscating any goods or imposing any penalty on any person shall be Page 17 of 33 C/SCA/3547/2021 JUDGMENT DATED: 18/02/2022 made under this Chapter unless the owner of the goods or such person- (a) is given a notice in [writing with the prior approval of the officer of customs not below the rank of [an Assistant Commissioner of Customs], informing] him of the grounds on which it is proposed to confiscate the goods 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. Provided that the notice referred to in clause (a) and the representation referred to in clause (b) may at the request of the person concerned be oral. 153. Service of order, decision, etc.- Any order or decision passed or any summons or notice issued under this Act, shall be served,- (a) by tendering the order, decision, summons or notice or sending it by registered post or by such courier as may be approved by the Commissioner of Customs; (b) if the order, decision, summons of notice cannot be served in the manner provided in clause (a), by affixing it on the notice board of the customs house”. Page 18 of 33 C/SCA/3547/2021 JUDGMENT DATED: 18/02/2022 10. It is not in dispute that seizure of goods in question was effected on 11.2.2017 in the arrival hall of terminal No.2 of SVPI Airport, Ahmedabad, in presence of panchas and seizure memo was issued accordingly on the same day. Further, request was made by the petitioners for returning seized ornaments and ‘I phones’ on 19.8.2017, reminder dated 1.9.2017 wherein reference was made to seizure memo dated 11.2.2017 and various decision of Delhi High Court and also that of Supreme Court which mandated return of seizure goods in case of failure of giving notice within six months from the date of seizure which was over in the facts of the case on 11.8.2017. That reply dated 12.9.2017 was received from the office of Assistant Commissioner, Customs, Ahmedabad wherein it was stated that show cause notice dated 9.8.2017 has been issued from file No. VIII/10-12/SVPIA/O&A/2017 by the Additional Commissioner, Customs, Ahmedabad and was delivered at the residence of the petitioners under proper panchnama dated 10.8.2017 since residential premises of the petitioners was found to be locked. In addition to the above, a copy of show cause notice was also affixed on the notice board of Customs House, Ahmedabad on 10.8.2017 in terms of provisionsof Section 153 (b) of the Customs Act, 1962 and, therefore, seized articles were not to be released and the petitioners were requested to join the adjudication procedure. The above fact is reflected in the affidavit dated 30.10.2017 filed by Dy. Page 19 of 33 C/SCA/3547/2021 JUDGMENT DATED: 18/02/2022 Commissioner of Customs (Air Intelligent Unit) SVPI Airport, Ahmedabad. 11. In view of the above stand it is categorically stated by the petitioners that they had not received any such notice given by the authority and claim about service of notice by fixation by inserting the same in the residential premises in presence of panchas or fixation of such notice on the notice board of the Customs House etc. were denied and, for which, the petitioners had no knowledge. It was further stated that Mr. Deepak Soni, petitioner no. 1was admitted to the hospital for heart ailment. They had not attended even their business, however, son of petitioner no.1 was through out available at the shop as he was looking after the business when the petitioner no.1 was unwell. It is further borne out from the record, various summons were issued by custom authorities to appear and cooperate but had no occasion the petitioners remained present before the authority. That apart, no record is available or produced before this Court that show cause notice was given in terms of Section 110 (2) read with Section 124 and service thereof as envisaged under Section 153 of the Act, 1962. That so called panchnama drawn by the authority reveal that two panchas were taken from Amraiwadi and Vastral area of Ahmedabad away at the distance of more than 20 Km. And in their presence residential house of the petitioners was found locked and no person was available there. Since it was raining, it Page 20 of 33 C/SCA/3547/2021 JUDGMENT DATED: 18/02/2022 was thought fit not to fix the notice and it was inserted through grill of the door of the house of the petitioners in a green colour polythene bag. 12. If the law in this regard is considered in the case of Ambalal Moraraji Soni (supra) this Court by considering provisions of Gold (Control) Act and also that of Section 124 of Customs Act, 1962 refer to decisions of the Apex Court in the case of Narasimhiab v. Singri Gowda, AIR 1966 SC 330 where giving notice was interpreted that as soon as the person with a legal duty to give the notice despatches the notice to the address of the person to whom it has to be given the giving is not complete. Even the Apex Court also considered concept of reasonable opportunity to be given of being heard and other aspects. Further by referring to Section 110 (2) of Customs Act and Section 79 of the Gold (Control) Act, this court referred to the case of Assistant Collector of Customs v. Charan Das Malhotra AIR 1972 SC 689 in which it was held as under: “The right to restoration of the seized goods is a civil right which accrues on the expiry of the initial six months ad which is defeated on an extension being granted, even though such extension is possible within a year from the date of the seizure. Consequently such a vested civil right in the respondent cannot be defeated by an ex parte order of extension of time by the Page 21 of 33 C/SCA/3547/2021 JUDGMENT DATED: 18/02/2022 Collector. An opportunity to be heard should be available even in a case where extension is granted before expiry of the initial six months, after which period alone the respondent can claim the right to return of the seized goods.” Thereafter, discussing the facts of the case on hand the Division Bench held as under: “Giving of the notice contemplated by Section 124 of the Customs Act and Section 79 of the Gold Control Act means that the notice must have been received because as pointed out by the Supreme Court in Narasimhiah’s case, AIR 1966 SC 330 (supra) the giving of the notice is not complete unless and until it reaches the person concerned or its actual tender to him. Merely despatching of the notice to the address of the person does not complete the giving of the notice. I the instant case, therefore, the fact that the respondents despatched the notices by post on November 5, 1968, would not complete the giving of the notice. The giving of the notice should have been completed on or before November 6, 1968 i.e. notices should have reached the petitioner on or before November 6, 1969 or should have been tendered to him before that date. That was not done in the instant case and, therefore, as from November 7, 1969, the civil Page 22 of 33 C/SCA/3547/2021 JUDGMENT DATED: 18/02/2022 right to get back the seized goods accrued to the petitioner.” 13. That in another decision in the case of Purushottam Jajodia v. Director of Revenue Intelligence, New Delhi, once again considered the case of K. Narasimhiah (supra) AIR 1966 SC 330 and reiterated that notice can be regarded as ‘given’ only when it is received by the party and mere its issues within the said time-limit not sufficient. Again in the case of New Drug Y Chemical Co. v. Union of India (supra) the Division Bench of Bombay High Court considered requirement of compliance of provisions of Section 153 (a) of Customs Act, 1962 held that sending of order by “Speed Post” is not sufficient compliance of the above provisions and order is to be served upon assessee or his agent sending it by Registered Post A.D. Or by other modes of service and that Section 153 (a) will come into play only when service was not envisaged under Section 153(a) is not possible then only affixation of notice board of the Customs House is permitted. 14. Thus, in the facts of this case submissions made by learned counsel for the petitioner and facts as well as on law remained virtually un-answered and the petitioners were not given notice so envisaged under Section 110 (2) read with Section 124 and Section 153 of the Customs Act, 1962 and the case on hand is covered by the decision to which we have made reference in earlier Page 23 of 33 C/SCA/3547/2021 JUDGMENT DATED: 18/02/2022 paragraph and the case of the petitioners is further strengthened that procedure followed by drawing panchnama etc. was of no use and the same cannot be termed as compliance with provisions of the Act, 1962, Even the decision relied on by Mr. Mitesh Amin, learned advocate for the respondents in the case of vs. Ram Kumar Agarwal reported in 2012 (280) ELT 13 (M.P.)submitted that the Bombay High Court simply considered provisions of Section 110 (2), 124, 153 of the Customs Act and in the facts appeared before it, appeal filed by the authority was allowed. In the above case also the court concluded that service of notice will be complete either by tendering or by sending the same by registered post A.D. And such facts cannot be equated with the facts of this case and that of High Court of Karnataka dated 22.4.2015 in the case of K.Abdulla Kunhi Abdul Rahaman will have no bearing on the facts of this case since it was categorically placed on record by the department that show cause notice was already despatched on 13.3.2014 which came to be delivered on the petitioner on 17.3.2014 after the expiry of two days of period of six months so envisaged under Sub-Section (2) of Section 110 of the Act.” 7 . 6 I n c a s e o f K o r e K o n c e p t s v s . D e p u t y C o m m i s s i o n e r o f C u s t o m s ( S I I B ) , r e p o r t e d i n 2 0 1 6 ( 3 3 3 ) E . L . T . 7 6 ( D e l . ) w h e r e t h e s h o w Page 24 of 33 C/SCA/3547/2021 JUDGMENT DATED: 18/02/2022 c a u s e n o t i c e w a s n o t i s s u e d w i t h i n s t i p u l a t e d p e r i o d a c c o r d i n g t o t h e C o u r t , t h e s e i z u r e o r d e r w o u l d n o t s u s t a i n a n d t h e g o o d s w h i c h w e r e r e l e a s e d e a r l i e r p r o v i s i o n a l l y w e r e h e l d t o h a v e b e e n r e l e a s e d u n c o n d i t i o n a l l y a n d t h e B a n k G u a r a n t e e f u r n i s h e d a t t h e t i m e o f p r o v i s i o n a l r e l e a s e w o u l d c e a s e t o o p e r a t e , t h e s a m e a l s o w a s r e q u i r e d t o b e r e t u r n e d f o l l o w i n g t h e e a r l i e r d e c i s i o n o f J a t i n A h u j a v s . U n i o n o f I n d i a , r e p o r t e d i n 2 0 1 3 ( 2 8 7 ) E . L . T . 3 ( D e l . ) . T h e H i g h C o u r t o f D e l h i i n c a s e o f J a t i n A h u j a ( s u p r a ) h e l d a s u n d e r : - “9. It can be gathered from the above discussion that the provision of Section 110(2) insofar as the prescription of a time limit for holding seized goods, is deemed mandatory; the consequence of not issuing a show cause notice within the period or extended period specified is clearlys pelt out to be that the ‘goods shall be returned to the person from whose possession they were seized’ (apparent from a Page 25 of 33 C/SCA/3547/2021 JUDGMENT DATED: 18/02/2022 combined reading of Section 110(2) and its proviso). The corollary is not that the Customs authorities lose jurisdiction to issue show cause notice. 13. In the light of the above discussion, the Petition has to succeed. It is declared that the effect of non-issuance of show cause notice under Section 124 in this case, has resulted in the operation of Section 110(2) and the statutory dissolution of the seizure order made in the case of the Petitioner’s car. The said vehicle ‘released provisionally and subject to conditions under Section 110A’ shall be deemed to have been unconditionally released. If the Maserati car has not been released, the same shall be released within two weeks and the superdarinama is hereby quashed. The writ petition is allowed in the above terms;no costs.” 8 . R e v e r t i n g t o t h e f a c t s o n h a n d s , M / s . A m i r a I m p e x o f M a h a r a s h t r a e n g a g e d i n t h e b u s i n e s s o f v a r i o u s i t e m s i s a l l e g e d t o h a v e i n d u l g e d i n g r o s s o v e r v a l u a t i o n a n d m i s - d e c l a r a t i o n o f t h e e x p o r t g o o d s w i t h a n i n t e n t t o w r o n g f u l l y a v a i l I G S T r e f u n d i n v a r i o u s o t h e r e x p o r t r e l a t e d i n c e n t i v e s . Page 26 of 33 C/SCA/3547/2021 JUDGMENT DATED: 18/02/2022 9 . A s e a r c h w a s c o n d u c t e d a t t h e o f f i c e p r e m i s e o f t h e p r o p r i e t o r o f J B M T e x t i l e s S h r i A m i t H a r i s h a n k a r D o c t o r a n d a l s o o f S h r i M i h i r M a h e s h C h e v l i a n d S h r i A a z a m S a b u w a l a a t S u r a t . T h e s t a t e m e n t s w e r e r e c o r d e d o f t h e a u t h o r i z e d s i g n a t o r y o f a b o u t e i g h t f i r m s , w h i c h w e r e a l s o o p e r a t i n g i n d e p e n d e n t l y f r o m t h e s a m e p r e m i s e . I t a l s o w a s a l l e g e d t h a t t h e e x p o r t o f t h e g o o d s w e r e m a d e i n t h e n a m e s o f f i v e f i r m s o u t o f t h e e i g h t f i r m s w h i c h w e r e c a l l e d u p o n t o s h o w c a u s e t o t h e A d d i t i o n a l / J o i n t C o m m i s s i o n e r o f C u s t o m s f o r F O B v a l u e o f e x p o r t g o o d s u n d e r t h e p r o v i s i o n o f S e c t i o n 1 4 ( 1 ) o f t h e A c t r e a d w i t h R u l e 8 o f C u s t o m s V a l u a t i o n ( D e t e r m i n a t i o n o f V a l u e o f E x p o r t G o o d s ) R u l e s , 2 0 0 7 a n d u n d e r R u l e 6 o f t h e C u s t o m s Page 27 of 33 C/SCA/3547/2021 JUDGMENT DATED: 18/02/2022 V a l u a t i o n ( D e t e r m i n a t i o n o f V a l u e o f E x p o r t G o o d s ) R u l e , 2 0 0 7 . 1 0 . T h e n o t i c e f o r c o n f i s c a t i o n a n d p e n a l t y a l s o w a s g i v e n u n d e r t h e A c t o n 2 7 . 1 1 . 2 0 2 0 . A d m i t t e d l y , t h e s e a r c h p r o c e e d i n g s h a d b e e n c a r r i e d o u t a s p e r t h e p a n c h n a m a d r a w n a n d p l a c e d b e f o r e t h i s C o u r t o n 0 3 . 0 4 . 2 0 1 9 . T h e s t a t e m e n t s h a v e a l s o b e e n r e c o r d e d o n 0 4 . 0 4 . 2 0 1 9 a n d a s h o w c a u s e n o t i c e h a d b e e n i s s u e d o n 2 7 . 1 1 . 2 0 2 0 f o r t h e a l l e g e d i l l e g a l e x p o r t a t t e m p t e d b y M / s . A m e e r a I m p e x b y t h e A d d i t i o n a l D i r e c t o r o f R e v e n u e I n t e l l i g e n c e - r e s p o n d e n t N o . 4 , s e r v e d u p o n t h e p e t i t i o n e r o n 1 4 . 1 2 . 2 0 2 0 . A d m i t t e d l y , t h i s n o t i c e o f c o n f i s c a t i o n i s i s s u e d b e y o n d t h e p r e s c r i b e d s t a t u t o r y p e r i o d o f s i x m o n t h s . Page 28 of 33 C/SCA/3547/2021 JUDGMENT DATED: 18/02/2022 1 0 . 1 T h e i n t e r i m r e p l y t o t h e s a i d s h o w c a u s e n o t i c e w a s f i l e d o n 1 2 . 0 1 . 2 0 2 1 . S i n c e n o t r e s p o n d e d , a r e m i n d e r h a d a l s o b e e n s e n t o n 2 1 . 0 1 . 2 0 2 1 . T h e c a s h a n d t h e s e i z e d a r t i c l e s s i n c e c o n t i n u e d t o b e w i t h t h e r e s p o n d e n t s , p r e s e n t p e t i t i o n h a s b e e n p r e f e r r e d . 1 0 . 2 M a n d a t e o f S u b - s e c t i o n ( 2 ) o f S e c t i o n 1 1 0 o f t h e A c t i s c r y s t a l c l e a r t h a t i f n o n o t i c e i s g i v e n u n d e r c l a u s e ( a ) o f s e c t i o n 1 2 4 o f t h e A c t f o r c o n f i s c a t i o n w i t h i n s i x m o n t h s o f t h e s e i z u r e o f t h e g o o d s , t h e g o o d s s h a l l b e r e t u r n e d t o t h e p e r s o n f r o m w h o s e p o s s e s s i o n t h e y w e r e s e i z e d p r o v i d e d t h a t t h e P r i n c i p a l C o m m i s s i o n e r o f C u s t o m s f o r r e a s o n s t o b e r e c o r d e d i n w r i t i n g c a n e x t e n d t h i s p e r i o d , n o t e x c e e d i n g t h e p e r i o d o f s i x m o n t h s a n d Page 29 of 33 C/SCA/3547/2021 JUDGMENT DATED: 18/02/2022 i n f o r m t h e c o n c e r n e d p e r s o n f r o m w h o m s u c h g o o d s w e r e s e i z e d b e f o r e e x p i r y o f t h e p e r i o d s o s p e c i f i e d . I t i s f u r t h e r n e e d e d t o b e s p e c i f i e d t h a t w h e r e a n o r d e r f o r p r o v i s i o n a l r e l e a s e o f t h e s e i z e d g o o d s h a s b e e n p a s s e d u n d e r S e c t i o n 1 1 0 A o f t h e A c t , t h e s p e c i f i e d p e r i o d o f s i x m o n t h s s h a l l n o t a p p l y . 1 1 . I n t h e i n s t a n t c a s e , a d m i t t e d l y t h e r e h a s b e e n n o p r o v i s i o n a l r e l e a s e o f t h e s e i z e d g o o d s . F u r t h e r e x t e n s i o n o f s i x m o n t h s w i t h t h e r e a s o n e d o r d e r b y t h e P r i n c i p a l C o m m i s s i o n e r o f C u s t o m s o r C o m m i s s i o n e r o f C u s t o m s a l s o i s c o m p l e t e l y m i s s i n g . T h e p e r i o d o f s i x m o n t h s f r o m t h e d a t e o f s i g n a t u r e e x p i r e d o n 0 3 . 1 0 . 2 0 1 9 . E v e n f u r t h e r p e r i o d o f s i x m o n t h s a s p r o v i d e d i n t h e f i r s t p r o v i s o t o S e c t i o n Page 30 of 33 C/SCA/3547/2021 JUDGMENT DATED: 18/02/2022 1 1 0 ( 2 ) a l s o g o t o v e r o n 0 3 . 0 4 . 2 0 2 0 . O f c o u r s e , i n a b s e n c e o f a n y o r d e r , m u c h l e s s r e a s o n e d o r d e r b y p r e s c r i b e d a u t h o r i t y , e x t e n s i o n w o u l d n e e d t o b e d i s r e g a r d e d y e t , t h e r e s p o n d e n t s c h o s e n o t t o r e t u r n t h e s e i z e d c u r r e n c y o r m o b i l e p h o n e s a n d t h e r e q u e s t o f t h e p e t i t i o n e r h a s n o t b e e n a d d r e s s e d n o r r e p l i e d t o . 1 2 . N o t i c i n g t h a t t h e p e r i o d p r e s c r i b e d u n d e r t h e l a w h a s a l r e a d y l a p s e d l o n g b e f o r e t h e s h o w c a u s e n o t i c e h a s b e e n i s s u e d , t h i s C o u r t n e e d s t o i n t e r v e n e f o r t h i s b e i n g a c l e a r v i o l a t i o n o f s t a t u t o r y p r o v i s i o n s o f s e c t i o n 1 1 0 a n d o t h e r p r o v i s i o n s o f C u s t o m s A c t , t h e s e i t e m s a r e r e q u i r e d t o b e r e t u r n e d t o t h e p e t i t i o n e r . 1 3 . T h e C o u r t n o t i c e s t h a t n o t h i n g h a s b e e n e x p l a i n e d i n t h e e n t i r e r e p l y o f 2 7 Page 31 of 33 C/SCA/3547/2021 JUDGMENT DATED: 18/02/2022 p a r a g r a p h s w i t h r e g a r d t o t h e n o n c o m p l i a n c e o f t h e s t a t u t o r y m a n d a t e u n d e r S e c t i o n 1 1 0 ( 1 ) ( 2 ) r e a d w i t h S e c t i o n 1 2 4 o f t h e A c t . I t i s q u i t e u n f a t h o m a b l e a s t o w h y t h e t i m e l i m i t i s n o t a d h e r e d t o a n d i s s u a n c e o f t h e s h o w c a u s e n o t i c e h a s b e e n d e l a y e d b e y o n d t h e s t a t u t o r y t i m e p e r i o d a n d h e n c e , i n t e r v e n t i o n w i l l b e n e c e s s a r y a t t h e e n d o f t h i s C o u r t b y k e e p i n g o p e n t h e r i g h t s o f t h e r e s p o n d e n t s t o i n i t i a t e a d j u d i c a t i o n p r o c e s s a f r e s h i n a c c o r d a n c e w i t h l a w . 1 4 . R e s u l t a n t l y , p r e s e n t p e t i t i o n i s a l l o w e d . R e s p o n d e n t s s h a l l r e t u r n t h e c a s h a n d a r t i c l e s / g o o d s t o t h e p e t i t i o n e r n o t l a t e r t h a n p e r i o d o f e i g h t w e e k s s e i z e d f r o m t h e p e t i t i o n e r . R e s p o n d e n t s s h a l l b e a t l i b e r t y t o i n i t i a t e a c t i o n o f Page 32 of 33 C/SCA/3547/2021 JUDGMENT DATED: 18/02/2022 a d j u d i c a t i o n , i n a c c o r d a n c e w i t h l a w , i f p e r m i s s i b l e u n d e r t h e l a w o t h e r w i s e . 1 5 . N o o r d e r a s t o c o s t s . (SONIA GOKANI, J) (HEMANT M. PRACHCHHAK,J) M.M.MIRZA Page 33 of 33 "