TMI Blog2022 (1) TMI 1021X X X X Extracts X X X X X X X X Extracts X X X X ..... ing 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 Hon ble Supreme Court in the celebrated decision in the case of Tulsiram Patel while answering the question as to whether the principle of natural justice be modified or in exceptional cases can it even be excluded to be read that the rule of audi alteram partem is a subject to the doctrine of necessity and yields to it as pointed out by the Hon ble Supreme Court in J. MOHAPATRA CO. VERSUS STATE OF ORISSA [1984 (8) TMI 350 - SUPREME COURT]. It was held that where a right to prior notice and an opportunity to be heard before the order is passed would obstruct taking of prompt action such a right can be excluded. Such a right can also be excluded where action is to be taken its object and purpose and the scheme of the relevant statutory provisions warrants its exclusion nor can the audi alteram partem rule to be invoked, if importing it would have the effect of paral ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion was filed for issuance of a writ of Mandamus to withdraw/cancel the order dated 24.06.2020 passed by the revenue under proviso to Section 110(2) of 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 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... signments intervene on 17.04.2020 and no notice under clause (a) of Section 124 of the Act had been issued to the writ petitioners with respect to the seized 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petition and the writ petition came to be allowed by order dated 14.09.2020, impugned before us. 9. It is submitted by the Learned Standing Counsel appearing for the appellant/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, unl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hould not be imposed on each one of the noticees under section 114 and / or Section 114AA of the Act. 12. The writ petitioners participated in the adjudication proceeding and 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 ₹ 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 ₹ 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 consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extended upto 30.06.2020. Thus, in terms of the proviso to Section 110(2) as amended, the period for issuance of Show Cause Notice under section 124 of the Act was extended by a further period 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 sufficie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore an order is passed if would obstruct taking of prompt action, such right can be excluded and this right can also be excluded where the nature of the action to be taken, its object and purpose and 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 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... power under the proviso to Section 110 (2) cannot be exercised without granting prior opportunity to the respondents and such legal position has remained the same even after the amendment. Further, by placing reliance 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 prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e proviso to Section 110 (2) as it originally stood, that is prior to 29.03.2018 conferred power on the authority to extend the period of issuance of Show Cause Notice under section 124 (a) of the Act by further 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the administrative process or where the need for promptitude or urgency of taking action so demands. 24. The proviso as it stood prior to the amendment specifically provides for sufficient cause being shown the 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 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter of interpretation in Bibhuti Bhushan Bagh and Charan Das Malhotra. However, the amendment only provides for recording of reasons in writing and information to the persons from whom the goods were seized. This marked 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasoning of the Supreme Court was primarily based on the fact that issuance of show cause notice (i.e under Section 124) is part of a quasi-judicial or judicial act and consequently, the delay in its issue can at times, be prejudicial 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remained unaffected, a second proviso has been added, which states that:- Provided further that where any order for provisional release of the seized goods has been passed under Section 110A, the specified period of six months shall not apply. 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 v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ell-settled that in a taxation statute, there is no room for any intendment, that regard must be had to the clear meaning of the words and that the matter should be governed wholly by the language of the notification. Equity has no place in interpretation of a tax 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 ..... 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