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TMI Blog2022 (1) TMI 1021X X X X Extracts X X X X X X X X Extracts X X X X ..... the Customs Act, 1962 (Act for brevity) and for a writ of prohibition to prohibit the revenue from withholding the goods covered under the shipping bills dated 13.09.2019. 4. The first Writ Petitioner is a private limited company incorporated under the Companies Act, 1956 having its registered place of business at Calcutta. The second Writ Petitioner is the Managing Director of the Company. During July, 2019, the officers of the revenue commenced an investigation against the writ petitioners by way of search and seizure. Summons were issued and statements were recorded by the CGST Authorities with respect to 24 exports made by the writ petitioners between February 2019 and June 2019. During September 2019, the writ petitioners filed two shipping bills dated 13.09.2019 for export of Chewing Tobacco through Calcutta Port and another export consignment under shipping bill dated 30.09.2019 for the same product. The said three export consignments were subjected to examination and all the three consignments were seized under Section 110 of the Customs Act on the allegations of mis-declaration. Thereafter, the revenue commenced investigation with respect to the exports made by the writ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods and as such the provisions of Section 110(2) of the Act is applicable to the case of the writ petitioners, fastening a statutory obligation on the revenue to return the seized goods in terms of section 110(2) at the expiry of the period of 6 months from the date of seizure and in the absence of any appropriate order of extension under section 110(2) there is a statutory right for the writ petitioners to obtain return of the seized goods. It was contended that the authorities cannot mechanically pass the order extending the time limit for issuing the Show Cause Notice and unless the authority is satisfied that there exists sufficient cause necessitating the extension and burden of proof of such necessity is clearly on the investigating authority who applied for extension and not on the person from whom the goods were seized. It was further contended that prior to issuance of the order extending the period for issuance of Show Cause Notice, no opportunity was granted to the writ petitioners and an exparte decision came to be taken by the authorities which is arbitrary and illegal. Reliance was placed on the decision of the Hon'ble Supreme Court in Assistant Collector of Custom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant/revenue that reasonable opportunity was not granted to the revenue to place the facts and controvert the submissions made by the writ petitioners, nevertheless, oral submissions were made by the appellants/respondent. 10. The Learned Writ Court held that the scope of Section 110(2) was considered by the Hon'ble Supreme Court in Charan Das Malhotra and Bibhuti Bhusan Bagh (supra) wherein it has been held that the power under the proviso to Section 110(2) of the Act is quasi-judicial which required a judicial approach and extension order cannot be mechanically passed. Further it was held that the order of Hon'ble Supreme Court in Charan Das Malhotra and Bibhuti Bhusan Bagh (supra) held that notice was required to be issued to the person from whom the goods were seized before the expiry of 6 months. The court also noted the amended proviso which came into effect on 29.03.2018 and held that the adjudicating authority is required to adhere to principles of natural justice in any adjudication proceeding, unless there is a specific prohibition in the statute from doing so. Noting, the proviso to Section 110(2) prior to its amendment, the Court held that the authority was exercis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Principal Commissioner of Customs (Port), Calcutta has passed the order-in-original dated 21.09.2021 affirming the proposal made in the Show Cause Notice, rejected the declared value of the goods and re-determined the value at Rs. 4,64,770/- and also confiscated the goods giving the right to redeem the goods under section 125(1) of the Act on payment of redemption fine of Rs. 20,00,000/- and imposing penalty on the writ petitioners as well as other co-noticees. 13. The Learned Counsel appearing for the respondent/writ petitioners submitted that the order which was impugned in the writ petition has no bearing on the adjudication proceedings, commenced by Principal Commissioner of Customs and therefore, the writ petitioners participated in the adjudication and they will avail remedies provided for under the Act as against the order- in-original dated 21.09.2021. Thus, it is submitted by the Learned Counsel appearing for the respondent/writ petitioners that nothing would survive for consideration in this appeal filed by the revenue, as the goods have already been confiscated and the adjudication has been completed and order has been passed. 14. We have heard the submissions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 6 months with effect from 30.6.2020. Therefore, it is submitted that the authority has recorded reasons and has communicated the same to the writ petitioners thus fulfilled the twin conditions. Further, it is submitted that on a plain reading of the amended proviso to Section 110, it is clear that the opportunity of prior hearing stands expressly excluded in the statute. Therefore, the Learned Writ Court committed an error in setting aside the order dated 24.06.2020 on the grounds of breach of principle of natural justice. It is submitted that the Learned Single Bench had referred to the two decisions relied on the writ petitioners in the case of Charan Das Malhotra and Bibhuti Bhushan Bagh, which are not applicable to the facts and circumstances of the case on hand, as these decisions were rendered considering the statute as it stood prior to its amendment. 17. It is submitted that under the pre-amended law the power under the proviso to Section 110(2) could be exercised for "sufficient cause" and this was subject matter of interpretation in the said two decisions of the Hon'ble Supreme Court and in the light of the said proviso the decision was rendered. After the amendment, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the scheme of the relevant statutory provisions warrant its exclusion and the right of audi alteram partem cannot be invoked, if imparting, it would have the effect of paralysing the administrative process or where the need for promptitude or urgency of taking action so demands. Reliance was placed on the decision of the Hon'ble Supreme Court in Ajit Kumar Nag Vs. General Manger (PJ), Indian Oil Corporation Limited 2005 7SCC 764 for the same proposition that opportunity of hearing can be excluded. Reliance was placed on the decision of the Hon'ble Supreme Court in Commissioner of Customs (Import), Mumbai Vs. Dilip Kumar & Company 2018 (361) E.L.T. 577 (S.C) to support the arguments that in a taxation statute there is no room for any intendment and equity has no place in interpretation of the statute. Reliance was placed on the decision of the Hon'ble Supreme Court in The Commissioner of Sales Tax, Uttar Pradesh, Lucknow, Vs. M/s, Parson Tools and Plants, Kanpur, AIR 1975 SC 1039, for the proposition that when the legislature clearly declares its intent in the scheme and language of a tax statute, it is the duty of the Court to give full effect to the same without scanning its wisd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iance on the decision in the case of Bibhuti Bhushan Bagh (supra) it is submitted that the mandatory procedure to be followed before exercising the power under the proviso to Section 110 (2) of the Act has been clearly laid down keeping in view of the two judicial pronouncements which were relied upon by the Learned Counsel for the respondent. It is submitted that the amendment which has been brought out in the proviso by way of substitution has to be read in consonance with the guidelines issued by the Hon'ble Supreme Court in the aforementioned decision. Therefore, it is submitted that the Learned Single Bench was right in holding that the appellants are required to adhere to the principle of natural justice while exercising power under section 110 (2) of the Act and by virtue of the amended proviso two additional burden have been fastened upon the appellant. Further it is submitted that the Learned Single Bench was right in coming to the conclusion that the amended proviso does not obviate the requirements of adherence to the principle of natural justice while power under section 110 (2) of the Act is exercised. Therefore, without providing an opportunity of hearing to the respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period not extending 6 months on "sufficient cause" being shown. The important change that has been brought about by the amendment with effect from 29.03.2018 is that the authority can extend the period of issuance of Show Cause Notice for a further period of 6 months by recording reasons in writing and inform the person from whom such goods were seized before the expiry of the period so specified. The question would be whether in terms of the amended proviso the person from whom the goods were seized is entitled to be heard before the time for issuance of Show Cause Notice is extended by the authority. The respondents case rests upon the two decisions namely Charan Das Malhotra and Bibhuti Bhushan Bagh. To be noted, both the decisions were rendered prior to the amendment brought about to the proviso to Section 110 (2). The argument of the Learned Counsel for the respondent which was accepted by the Learned Writ Court that despite the amendment brought about in the statute the two decisions are relevant and the respondents from whom the goods were seized are entitled to be heard before an order of extension is made, extending the period for issuance of Show Cause Notice under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority can extend the period for issuance of Show Cause Notice. This expression was interpreted in Charan Das Malhotra as well as in Bibhuti Bhushan Bagh to mean that although the decision of the authority as to the sufficiency of materials before him may be within his exclusive jurisdiction, it is nonetheless difficult to comprehend as to how he can come to a determination unless he has before him the pros and cons of the question and interpreted the determination by the authority for extension of time to expose his decision to one side and perhaps one based on an incorrect statements of facts. It was further held that the difference in the language used in the first of limb of the proviso to the sub-section 2 would lend support to the contention that the power in one case may be subjective and therefore, not calling for an enquiry, and the power in the other is one the exercise of which necessitates an enquiry into materials placed before the authority for his determination and therefore, the Hon'ble Supreme Court concluded that the power under the proviso is not to be exercised without an opportunity of being heard given to the person from whom the goods are seized. It was fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed change in the phraseology of the proviso cannot be ignored. Sufficient cause has always been interpreted to mean that there should be a proper and object consideration which phraseology is absent in the amended proviso to Section 110 (2) as it provides only for recording of reasons in writing and informing the persons from whom the goods were seized before the expiry of the period so specified. Therefore, the legislators in their wisdom while amending the proviso by substituting it with a new proviso had specifically done away with the providing of a notice or an opportunity before making the order of extension for issuance of Show Cause Notice. The proviso as it originally stood had not specifically provided for information being furnished to the persons from whom the goods were seized before the expiry of the period so specified. The Court while interpreting the statutory provisions cannot ignore this marked change brought about in the statute. Therefore, in our considered view the decision in the Charan Das Malhotra vs. Bibhuti Bhushan Bagh cannot render assistance to the respondents/writ petitioners while interpreting the amended proviso. The amendment has made a sea change ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rejudicial to the interests of the party or importer, who has an interest in the goods. The observations of the Court are pointed, with respect to the nature of the goods and the information about their condition, which the party likely to be affected might possess. This court is also alive to the fact that Section 110 confers a general power of detention of goods : thus, all classes of life can be implicated. Yet, the Court has to also be alive too the fact that I.J. Rao (supra) was premised upon the phraseology of Section 110 (2), and the power of extension being conditioned "on sufficient cause being shown" which was the subject matter of the Court's discussion. Now, the amendment has done away with that expression; the power to extend 9the period of detention) after amendment states that, "if the Commissioner of Customs may, for reasons to be recorded in writing, extend such period to a further period not exceeding six months and inform the person from whom such goods were seized before the expiry of the period so specified." 2) The change in the statute, in the opinion of this Court, is a significant one. The previous provision required the Commissioner to show sufficient ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y." 6) The effect of these amendments, is that the rigour of unamended Section 110(2) has been softened. Now, a person, whose goods are detained, can claim provisional release. At the time when I.J Rao was decided, that facility was not available. Seen in the context of these facts, it is apparent that a textual reading of Section 110 (2) would lead one to conclude that no separate notice is necessary, before extending the period of limitation by a further six months (for issuance of show cause notice); the authority has to record reasons in writing, which of course, should be based on materials and inform the concerned party about the extension before the expiry of the first period of six months. At this stage, it is necessary to also notice that even in I.J.Rao (supra) the Court recognized that not all reasons can be disclosed, because investigative processes and information gathering can be confidential. 27. In our considered view the above decision would apply with full force to the case on hand. The Court rightly noted that the rigour of the unamended Section 110 (2) has been softened and that apart as the statute stood as on date the person from whom the goods are seized c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax statute. Strictly one has to look to the language used; there is no room for searching intendment nor drawing any presumption. Furthermore, nothing has to be read into nor should anything be implied other than essential inference while considering a taxation statute. 29. The other tools of interpretation namely contextual or purposive interpretation cannot be applied nor any resort be made to look to other supporting materials especially in taxation statutes where equity has no place. 30. The order dated 24.06.2020, impugned in the writ petition is a speaking order by recording reasons in writing. After elaborately setting out the facts and the outcome of the investigation, the revenue had referred to Taxation and other Laws (Relaxation of Certain Provisions) Ordinance, 2020, by virtue of which the time limit for issuance of Notice, as specified in or prescribed or notified under the Customs Act which falls during the period from 20th day of March, 2020 to 29th day of June, 2020, has been extended until 30.06.2020. The reason so recorded in the order dated 24.06.2020 has not been questioned by the writ petitioners, nor the writ court has commented upon the same. Hence we hold ..... X X X X Extracts X X X X X X X X Extracts X X X X
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