Bombay High Court
Works Of Art (Pvt.) Ltd. And Another vs Union Of India And Others on 5 February, 1987
Equivalent citations: 1988(36)ELT91(BOM)
JUDGMENT
1. This petition under Article 226 of the Constitution seeks to revoke an order of detention and permit the export of items covered by the invoices, copies whereof are at Ex. 'D' appended to the petition.
2. The invoice items were brought for examination to the Customs Authorities and bills of landing in respect thereof were issued by the shipping company in favour of petitioners. In about May, 1986, the Customs Authorities detained items numbering about 200 on the suspicion that some of the items may be 'antiquities' within the meaning of Antiquities and Art Treasures Act, 1972. Petitioners addressed several communications to respondents pleading that the consignments had been unnecessarily detailed, though at one stage they had been cleared, and that, the detention was working to their great disadvantage in terms of finance and reputation. On 25-11-1986, petitioners received an undated communication, which, to the extent relevant for the purposes of this petition, reads thus :-
"The subject consignments were seized under the provisions of Section 110 of the Customs Act, 1962 on 3-6-1986. Since the investigation is not yet completed it has been decided to extend the time limit for issue of show cause notice by another six months by the Collector of Customs. This is for your information. You are also requested to co-operate with the department in finalising the investigation."
While the investigation was in progress, the petitioners filed Writ Petition No. 1974 of 1986 complaining of intimidatory tactics employed by the Officers of the respondents. On 14-8-1986, upon a statement being made by Counsel for the respondents the petition was disposed of.
3. On 9-12-1986, petitioners filed the present petition. They contend that the goods figuring in the petition were not 'antiquities' and they had obtained three certificates to this effect from well known authorities. Respondents had no material to justify the contrary suspicion entertained by them. More than six months had passed since the seizure effected on 3-6-1986. The communication received by them on 25-11-1986 was not a valid exercise of powers under Section 110 of the Customs Act. Now show cause notice was given before the grant of the extension spoken of by the communication received by them on 25-11-1986. The delay in permitting the export was causing immense loss to the petitioners. Their standing as dealers in handicrafts was seriously jeopardised. Therefore the prayer that a writ of mandamus be issued to the respondents to release the three consignments and permit the same to be exported immediately.
4. On 16-12-1986, Pendse, J. granted rule returnable on January 8, 1987. Till date, no affidavit in return has been filed and even today a short adjournment was sought to enable the filing of such an affidavit. That request has been rejected for the obvious reason that the petition peremptorily fixed for hearing on January 8, 1987 cannot be adjourned more than three weeks later for the mere filing of a return. Counsel representing the respondents contends that the authorities have acted in good faith and that if the writ sought by the petitioners is granted, all trace of evidence required to prosecute the petitioners in case such a step becomes necessary in the future, will have been lost. He therefor, prays that the petition be dismissed. I see no merit in the submission and allow the writ petition for the reasons given below.
5. The undeniable position is that no show cause notice was given to the petitioners before seizing the goods on 3-6-1986. What petitioners received on 25-11-1986 was an intimation that the time limit for issue of show cause notice had been extended by another six months. That such a communication is not a valid exercise of the powers conferred by Section 110 of the Customs Act is the decision of the Supreme Court in the Assistant Collector of Customs and Others v. Charan Das Malhotra . The decision of the Court in that case has rightly been summarised in the head note thus :-
"The power under the Proviso to Section 110(2) is quasi-judicial and at any rate one requiring a judicial approach. While the power of seizure under sub-section (1) of Section 110 can be exercised on the basis of reasonable belief on part of the concerned officer, the power of extending the period to give notice under Section 124(a) is to be exercised only on "sufficient cause being shown". This expression envisages at least some sort of inquiry on facts placed before the authority and determination by him of those facts. Extension order is not to be passed mechanically. The power under sub-section (1) cannot be equated with the power under the Proviso to sub-section (2) of Section 110."
Pendse, J. following the above decision in Dhirajlal Amritlal Mehta v. Union of India [1982 E.L.T. 273 (Bom.)] held thus :-
"It is not in dispute that the show cause notice was served after the expiry of six month from the date of seizure.... The decision of the Supreme Court entirely supports the claim of the petitioner. It is not in dispute that in the present case the Assistant Collector did not give any hearing to the petitioner before exercising the powers to extend the time. The Supreme Court has held that an opportunity of being heard ought to be given to the person from whom the goods are seized because the Collector while exercising powers of extension is exercising quasi-judicial powers. As the petitioner was not heard before grant of extension, it must be held that the order of extending the period done unilaterally by the Assistant Collector was totally illegal."
Admittedly, in the instant case the only communication sent by the Customs Authorities to the petitioners was that received by them on 25-11-1986. No show cause notice prior to the seizure was given. Therefore in terms of the aforesaid two decisions, the notice reproduced above cannot confer validity on the seizure effected by the Customs Authorities.
6. Mr. Ganesh submitted that the goods had been cleared for export and even if this was an error, the Authorities later could not change their mind and pass an order for seizure or detention. In this connection, he relies upon the Delhi High Court's decision reported in 1982 E.L.T. 43 (Delhi) Jain Shudh Vanaspati Ltd. and Another v. Union of India and Others. The Court in that case was dealing with Section 47 of the Customs Act. That section is in pari materia with Section 51 of the said Act which would be applicable to the instant case. The decision of the Delhi High Court is to the effect that once an order of clearance is made, it cannot be reviewed. I have my doubts as to the correctness of that view, and, say so, with all respect to the learned Judges who were parties to the decision. But that need not come in the way of disposing of this petition, for the matter is surely covered by the Supreme Court's decision aforementioned.
7. Mr. Shah contends that if the goods are allowed to be exported, the respondents would be without any evidence to prosecute the petitioners, in case parts of the consignments turn out to be 'antiquities'. As yet, the respondents have no evidence worth the name to justify the suspicion entertained by them,. This is besides the fact that the goods have been in their custody and control since May 1986. The process of appraisal, enquiry and investigation cannot be continued indefinitely, and, certainly not, when petitioners are the sufferers. The disadvantage at which the petitioners are placed is evident. They are dealers in handicrafts. The business is a select one primarily dependent upon goodwill, which in turns depends upon the fulfillment of commitments made by the dealers. Here, according to the petitioners, the deal was concluded in February 1986. The goods are with the respondents since May 1986. More than 7-8 months have passed and respondents still do not have any material to fortify the suspicion entertained by them. Therefore if they are placed at a disadvantage when it comes to investigating or prosecuting petitioners for a breach of the Antiquities and Art Treasures Act, 1972, they have to thank themselves. That cannot be a reason for denying the petitioners the relief to which they are entitled. Hence the order.
ORDER
8. Rule made absolute in terms of prayer (a). Respondents shall pay the costs of the petition and in addition bear their own. At the request of Counsel for respondents, the operation of this order is stayed for a week from today.