Gujarat High Court
Deepak Natvarlal Soni vs Union Of India on 10 September, 2018
Author: Anant S. Dave
Bench: Anant S. Dave, Biren Vaishnav
C/SCA/17472/2017 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 17472 of 2017
===============================================
DEEPAK NATVARLAL SONI
Versus
UNION OF INDIA
===============================================
Appearance:
MR PARESH M DAVE(260) for the PETITIONER(s) No. 1,2,3
MR DEVANG VYAS(2794) for the RESPONDENT(s) No. 1
MR MITESH R AMIN(2876) for the RESPONDENT(s) No. 2,3
===============================================
CORAM: HONOURABLE MR.JUSTICE ANANT S. DAVE
and
HONOURABLE MR.JUSTICE BIREN VAISHNAV
Date : 10/09/2018
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE ANANT S. DAVE)
1. The challenge in this writ petition under Article 226 of the Constitution of India by the petitioners who are family members is to the unjust, unreasonable and arbitrary action of the respondent authorities in not releasing the goods upon seizure affected on 11.2.2017 in view with regard to seized gold ornaments and two I phones while they arrived from Sharjah to Ahmedabad International Airport.
2. The prayer in this petition under Article 226 of the Constitution of India reads as under:
"14.(A) That Your Lordships may be pleased to issue a writ of mandamus or any other appropriate writ, order or direction thereby directing the respondent Nos. 2 and 3 herein Page 1 of 17 C/SCA/17472/2017 ORDER to return to the petitioners all gold ornaments/gold items and two Apple I-
phones seized under panchnama dated
11.2.2017 unconditionally.
(B) Pending hearing and final disposal of
the present petition, your Lordships may be pleased to direct the respondent Nos. 2 and to forthwith return all gold ornaments/gold items and two Apple I-Phones seized under panchnama dated 11.2.2017 on the conditions that may be deemed fit by this Hon'ble Court;"
3. Since there is no dispute about date on which goods in question came to be seized by custom authorities, our attention is invited by Mr. Paresh Dave, learned advocate appearing for the petitioners to various provisions of Customs Act, 1962 in the context of the prayer made herein above. Section 110 about Seizure of goods, documents and things and particularly sub-section (2) of Section 110 including the proviso therein, Section 124 about issue of show cause notice before confiscation of goods etc., and Section 153 which governed the subject goods prior to last amendment by Finance Act, 2018.
4. One of the main contentions of learned advocate for the petitioners is about failure on the part of the respondent-customs authority in not following mandatory provisions of sub-section (2) of Section 110 of the Act, 1962 Page 2 of 17 C/SCA/17472/2017 ORDER which lays down that the goods shall be returned to the person from whose possession the goods were seized under sub-section (1) of Section 110 and no notice in respect of thereof is given under clause (a) of Section 124 within six months of the seizure of the goods than the goods shall be returned to the person from whose possession such goods were seized. However, un-numbered proviso substituted by Finance Act, 2018 before substitution read that the period of six months may, on sufficient cause being shown be extended by the Principal Commissioner of Customs or Commissioner of Customs for a period not exceeding six months. It is further contended that Section 124 provide that no order confiscating any goods or imposing any penalty on any person shall be made under Chapter XIV unless the owner of the goods or such person is given a notice in writing with the prior approval of the officer of customs not below the rank of Assistant Commissioner of Customs informing on the ground on which it is to be confiscated the goods or to impose the penalty and clause
(b) of Section 124 is about affording 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 that clause (c) is about reasonable opportunity of being heard in the matter. That proper care is taken by the legislature, according to learned advocate for the petitioners by providing mode of service of notice, order etc., which prior to amendment by Finance Act, 2018 was about service of order, decision etc., which included summons or notice issued under Section 153 of the Act, 1962.
Page 3 of 17 C/SCA/17472/2017 ORDER5. According to learned advocate for the petitioners, a show cause notice under clause (a) of Section 124 of the Act was to be served upon the petitioner within six months i.e. on or before 11.8.2017. Upon making representation which included an application before Commissioner of Customs and Assistant Commissioner of Customs (Airports) for returning seized gold ornaments and 'I phones', as no show cause notice was given as envisaged under the Act, 1962 and six months had already expired from seizure of the goods. The first effort was made on 19.8.2017 and also a reminder on 1.9.2017. At the same time a communication was received dated 12.9.2017 from the office of Assistant Commissioner of Customs, Head Quarter stating that a show cause notice dated 9.8.2017 had been issued under Section 124 of the Act in terms of the amendment by Act 23 of 2012 provided under Section 153 (b) of the Act that copy of the show cause notice was also fixed on the notice board of Customs House, Ahmedabad, on 10.8.2017 which referred to service/delivery of such notice at the residential address of the petitioner and dropped inside the house by drawing panchnama dated 10.8.2017. Therefore, according to respondent No.2 show cause notice for the seizure which was made on 11.2.2017 and the notice is served on 10.8.2017 within the time limit of six months provided under Section 110 (2) of the Customs Act, 1962 goods so seized were not required to be released. The above stand according to learned advocate for the petitioner is contrary to the scheme contained in Chapter XIV of the Act, 1962 and the various decision of this Court and other High Courts interpreting the above provisions and even dispatch of the notice to the address of the person within the period of six Page 4 of 17 C/SCA/17472/2017 ORDER months so prescribed does not complete the requirement namely giving of the notice.
(1)Ambalal Moraraji Soni vs. Union of India AIR 1972 Gujarat 126 (2)Purshottam Jajodia vs. DIR. Of Revenue Intelligence, New Delhi, 2014 (307) ELT837 (Del.) (3)New Drug & Chemical Co. vs. Union of India 2015 (325) ELT 313 (Bom.) (4)Sai Incorporation vs. Principal Commissioner of Customs (Import) 2016 (338) ELT 578 (Del.) Therefore, prayer in the writ petition deserves to be granted by allowing the writ petition.
6. Opposing the prayer for releasing the goods on the ground of failure on the part of the customs authority to issue notice as envisaged under Section 110(2) read with Section 124 and mode of service so provided under Section 153 of the Act, Mr. Mitesh Amin, learned counsel for the customs authorities would contend that upon seizure effected of the goods carried by the petitioners on 11.2.2017 which were liable for confiscation since the petitioners made an attempt to smuggle such goods namely gold jewellery and 'I phone' for evading custom duties a statement under Section 108 of Custom Act of the petitioners was recorded. While answering the specific statement made by learned advocate for the petitioners about necessity to comply with provisions under sub-section (2) of Section 110 it is emphasized that requirement of conditions precedent under 110(2) and 124 of the Act, 1962 will not vitiate validity of Page 5 of 17 C/SCA/17472/2017 ORDER the notice or the adjudication proceedings for the goods so seized liable to be confiscated as Section 110 and 124 are mutually exclusive. By taking us to the record it is submitted that on 10.8.2017 a panchnama was drawn duly signed by two panchas in person by Inspector, Customs (AIU), Sardar Patel International Airport, Ahmedabad, at the residential address of the petitioners that such notice was to be given at the residential address of the petitioners and upon a request made by the officer panchas had agreed to cooperate. Upon a visit to residential premise of the petitioners it was found locked and no one was present there. As, it was monsoon and hence not possible to affix such notice on the wall of the residential premise and, therefore, they were informed by the custom officer that such notice is to be placed inside the door and accordingly the notice as above, was placed in a green colour polythene bag and inserted inside the house through grill. In addition to above, such notice was dispatched on 9.8.2017 and displayed on the notice board of the custom authority on 10.8.2017 as envisaged under Section 153(b) and thus, compliance so envisaged by the Act, 1962. Mr. Amin, learned counsel for the respondent would further contend that plain reading of sub-section (2) of Section 110 is about giving a notice under Clause (a) of Section 124 within six months of the seizure of the goods and such notice was dispatched on 9.8.2017 and given to the petitioner on 10.8.2017, for which, panchnama was drawn on the very same day with the residential house was found locked and no person was present there. That giving notice as required, for which, manner was also followed up by the authority which specified Section 153 in toto and it is also submitted Page 6 of 17 C/SCA/17472/2017 ORDER that upon issuance of such notice now adjudication proceedings are completed and order in original is passed on 17.7.2018. Mr. Amin relied on decision of judgement in the case of Commissioner Central Excise Indore vs. Ram Kumar Agarwal reported in 2012 (280) ELT 13 (M.P.) and that of High Court of Karnataka at Begalaru dated 22.4.2015 in writ petition No.35408 of 2014 wherein it has been held that legislature does not intend to issue service of notice within six months and Karnataka High Court taking a view that dispatch of the notice which was evident from the postal record though delivered after the expiry of two days of six months was considered to be due compliance satisfying the requirement of 110(2), 124 (a) and Section 153 of the Act together.
7. Therefore, show cause notice so given to the petitioners by dispatching the same and in presence of panchas for which panchnama was drawn and in addition to above, such show cause notice was fixed on the very same day at the notice board of customs office rejection of the application of the applicant for a request to return the goods seized deserves no interference in exercise of powers under Article 226 of the Constitution of India.
8. Mr. Dave, learned advocate for the petitioners would re-emphasis firstly that in the case of Ambalal Moraraji Soni vs. Union of India (supra) the word 'given' as used in Section 110 (2) and 124 (a) of the Customs Act was interpreted and therein merely dispatching of the notice to the address of the person from whom goods were seized was found incomplete qua giving of the notice. That right to Page 7 of 17 C/SCA/17472/2017 ORDER return of the seized goods is a civil right which vested in the person concerned if notice is not given to him within a period of six months from the date of seizure. That issuance of such notice as envisaged under the Act particularly under Section 110 (2) which may result into confiscation of goods and failure to adhere to such provisions would negate even right of the person from whom the goods were seized to defend his case properly. Be that as it may, according to learned advocate for the petitioner in the facts of this case and the manner in which, notices were dropped or inserted through the grill of the door of the residence of the petitioners it does not amount giving notice under Section 124 and also contrary to service of notice, so provided under Section 153 of the Act, before its amendment by Finance Act, 2018 and governing the subject matter for the goods seized in the year 2017. Further, clause (a) (b) of Section 153 according to learned advocate for the petitioner mandates the custom authority firstly by tendering the order, decision, summons or notice by registered post or by such courier as may be approved by the Commissioner of customs and no such record is available or produced before this Court or even averments made in this regard as the case may be custom authority- respondent herein is on giving notice to the petitioner on 10.8.2017 by drawing panchnama and the manner service is described therein. That clause (b) of Section 153 will come into play only upon providing necessary proof with regard to attempts made by authority namely dispatching the notice by registered post or by such recognized courier and in case if notices is not served by either of the mode as above, clause (b) procedure is to be followed namely that Page 8 of 17 C/SCA/17472/2017 ORDER affixing the notice on the notice board of the custom house. That would be the correct and precise interpretation of clause (a) and (b) of Section 153 of the Act upon plain reading of the language of both the clauses.
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 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.Page 9 of 17 C/SCA/17472/2017 ORDER
(1A) xxx (1B) xxx
(a) ....
(b) ....
(c) ....
(1C) xxx (2) Where any goods are seized under sub-
section (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 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 Page 10 of 17 C/SCA/17472/2017 ORDER 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".
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 Page 11 of 17 C/SCA/17472/2017 ORDER 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. 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 Page 12 of 17 C/SCA/17472/2017 ORDER 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 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 Page 13 of 17 C/SCA/17472/2017 ORDER 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 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 Page 14 of 17 C/SCA/17472/2017 ORDER 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 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 Page 15 of 17 C/SCA/17472/2017 ORDER 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 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 Commissioner Central Excise Indore (supra) 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 Page 16 of 17 C/SCA/17472/2017 ORDER 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.
15. As conjoint reading of the above, we are of the considered view that action of respondent authorities in not returning the goods seized upon failure to comply with Sections 110(2), 124 and 153 of Customs Act, is illegal and we allow this writ petition by directing the respondent Nos. 2 and 3 herein to return to the petitioners within 8 weeks from today all gold ornaments/gold items and two apple I- phones seized under panchnama dated 11.2.2017 unconditionally subject to adjudication process to be carried out afresh in accordance with law.
16. Petition is allowed accordingly with no order as to costs.
17. Learned counsel for the customs authority requests to stay the order as above for about eight weeks, to which learned advocate for the petitioner has objection. We find no reason to stay the operation of the order and accordingly, the request is rejected.
(ANANT S. DAVE, J) (BIREN VAISHNAV, J) NAIR SMITA V. Page 17 of 17