TMI Blog1976 (3) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... the said firm at Nasik. On the same day they obtained from the Competent Officer a transport voucher under Section 11 K for transport of the said goods by road from Bombay to Nasik. In the said transport voucher it was mentioned that the goods would leave the petitioners shop at Sheikh Memon Street at 6 p.m. On January 23, 1969. Such time was mentioned in the transport voucher according to the petitioners because the Excise Officer declined to sign a transport voucher on that day if the goods were to be transported the next day as intended by the petitioners. On January 23,1969 at about 7.30 p.m. a party of Customs Officers raided the garage and residence of the petitioners Nos. 2, 3 and 4 at building "Triveni" situate at Walkeshwar Road, Bombay and seized 22 bars of silver from that garage along with 11 small pieces of silver contained in a gunny bag which was found on the loft. The Customs officers also seized a Willys Station Wagon bearing No. MRW - 9690 and some old books of account. They also seized from the residence of petitioners Nos. 2, 3 and 4 in building Triveni currency notes of the value of Rs. 54,000/- and 7 gold coins and some cash. On January 24, 1969 from the shop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was contended that the order dated July 22, 1969 whereby the period for issue of a show cause notice under Section 124 of the Act was extended, was in breach and violation of the principles of natural justice as the said order was issued by the Officer without giving any opportunity whatsoever to the petitioners. Secondly, it was contended that even the seizure of the goods was unjustified, because, on the facts of the case it was impossible for any officer to entertain any reason to believe that the goods were seized were liable to confiscation within the terms of Section 110(1) of the Act so as to justify the seizure. On that ground the validity of the show cause notice dated January 22,1970 issued under Section 124 of the Act was challenged. The learned Judge following the decision of the Supreme Court in the Assistant Collector of Customs and Superintendent. Preventive Service Customs, Calcutta and others v. Charan Das Malhotra, reported in A.I.R. 1972 S.C. 689, took the view that as the order extending the time for issuing the show cause notice under Section 124 was passed without giving any opportunity to the petitioners of being heard, the said order was liable to be quashed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods. He submitted that the impugned show cause notice dated January 22,1970 in so far as it relates to confiscation of the goods must be quashed once the six months' period prescribed in Section 110 expires and no show cause notice is issued within that period and when no valid order of extension issued within that period and when no valid order of extension of the period of seizure or for issue of the show cause notice is passed by the appropriate authorities. According to his submission, a show cause notice under Section 124 cannot be given once the period of six months or the extended period mentioned in the proviso has elapse since the date of the seizure. His submission was that as under the order of the trial Court the goods are ordered to be returned to the petitioners, the proceedings initiated pursuant to the notice dated January 22,1970 under Section 124 of the Act cannot be continued and they should be quashed. On the other hand, Mr. Joshi on behalf of the original respondents contended that Section 110 and Section 124 are entirely independent provisions, that Section 110 is contained Chapter XII which deals with searches, seizure and arrest. He submitted that these p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. So far as the return of silver bullion is concerned, he drew our attention to the events that have place after the matter was disposed of by the learned Judge and submitted that in view of the subsequent events that have taken place the order passed by the learned Judge should be modified in any event a clarification should be made so that the original respondents may not be hauled up for contempt in case, or in view of the order that may be passed by the learned Magistrate or in view of the order of confiscation that may be passed by the authorities under the Act, it may not be possible for any of the original respondents to return the silver bullion, the Willy's station wagon and/or the 'Contex-30' calculating machine to the petitioners. 5. By Central Ordinance No. 1 of 1969 which was promulgated on January 3, 1969, Chapters IVA and IVB were added in the Act and the said provisions were continued later on by Act 12 of 1969. These Chapters IVA and IVB have been introduced in the Act with effect from Jan. 3,1969, Section 11-A, authorises the Central Government by notification to specify goods of any particular class or description in regard to which special measures may be dee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13 enumerates the types of goods liable to confiscation. By Ordinance No. 1 of 1969 which was continued by Act 12 of 1969 Clause (1) was introduced in this section and one of the types of goods which could be confiscated under this clause was any specified goods in relation to which any provisions of Chapter IVB or of any rule made under the Act for carrying out the purposes of that Chapter have been contravened. Section 124 provides for issue of show cause notice before confiscation of goods etc. and its provisions are as under :- "124. 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 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 reasonable opportunity of being heard in the matter: Provided that the notice referred to in clause (a) and the representation referred to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t have reason to believe that the goods seized were liable to confiscation. In view of the circumstances enumerated by him, in his judgment that contention has not been canvassed before us. However, it is urged by Mr. Sen before us that upon a proper interpretation of Section 110 seizure of the goods which are liable to confiscation is a condition precedent to initiation of any proceedings for confiscation thereof and if such goods are not either validly seized or are not continued under seizure before issue of a show cause notice under Section 124, then it is not open to the Authority to initiate proceedings by giving a show cause notice under Section 124(a). He strongly relied upon the provisions of sub-section (2) of Section 110 and submitted that it is implicit in the provisions of the said section that a show cause notice under clause (a) of Section 124 cannot be issued after the expiry of the period of six months from the date of seizure if there is no extension, or, after the expiry of the further period of six months if there is an extension as contemplated by the proviso to sub-section (2), particularly when the goods are required to be returned to the person from whose po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on from whose possession they were seized. All the provisions of Chapter XIII are steps to facilitate investigation machinery and failure to issue a show cause notice under clause (a) of section 124 within the prescribed time will only result in an obligation on the part of the Customs Authorities to return the goods to the person from whose possession they were seized. There is nothing in the language of Section 110 to indicate that a fetter or limitation is imposed upon the power of the Competent Authority to initiate proceedings under Section 124. On the other hand, Section 124 is contained in Chapter XIV which contains substantive provisions relating to confiscation of goods etc. and imposition of penalty. Under Section 124 issue of a imposition of personal penalty is mandatory, but the language of section 124 is clear and precise and no restriction or limitation or even a fetter is imposed as regards the time when proceedings may be initiated by issue of a show cause notice. Section 124 prescribes the conditions precedent which are to be fulfilled by the Authority before an order of confiscation of goods or an order imposing any penalty can be passed against any person. These ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o omitted to take into account the consequences that will follow for failure to give a notice, which are indicated in Section 110(2) of the Act. Even there is no discussion as regards the unrestricted language used in Section 124. In the absence of proper discussion, with respect, it will not be possible for us to accept the view that has been taken by the learned Judge especially when it is inconsistent with the view that has been expressed by the Supreme Court by the other High Courts in various decisions. 10. The question was first considered by the Division Bench of the Calcutta High Court in Malhotra's case reported in AIR 1968 Cal. 28. In that case one of the prayers made before the court was for return of the goods seized. The Court hold that the notice under Section 124(a) not having been issued within six months and the extension having been illegally obtained exports the goods were liable to be returned. The notice under Section 124(a) was also independently challenged in that case and was set aside by that Court not on the ground that it was not issued within six months as prescribed by Section 110(2), but on a totally different ground, namely, that the notice was mate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bservations are regarded as Passing observations, upon a proper interpretation of Section 110 as well as Section 124 we take the same view as has been taken by the Division Bench of the Calcutta High Court and which view is reaffirmed by the above observations of the Supreme Court. 12. The provisions of Section 110 and section 124 had come up for consideration before the various High Courts where contentions similar to those urged by Mr. Sen were advanced. Reference can be made to the judgment of the Division Bench, of the Madras High Court in the case of Collector of Customs and Central Excise v. Amruthalakshmi reported in (1974) 2 Mad. Law Journal 88. In that case no notice under Section 124 was given within six months from the date of seizure of the goods effected under Section 110. The Division Bench of the Madras High Court has taken the view that there is no connection between the exercise of power of confiscation of goods and imposing of penalty and the provisions in Section 110 of the Act which required the officer to hand over the goods to the owner after the period specified, if no notice under Section 124(a) of the Act was given. Section 110 puts a limit to the power o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turn of goods after the expiry of the period mentioned in Section 110 of the Act cannot survive. The Division Bench also pointed out that if the intention of legislature was to restrict confiscation of goods or imposition of penalty only in respect of the goods which are seized under Section 110 of the Act, the legislature would have used the language qualifying the word "goods" used in Section 111,112 and 124 of the Act. The words used in Sections 112 and 124 are "any goods" and "any person;". These words are of widest, import and they cannot be given a restricted meaning as is sought to be given by the petitioner. There is nothing in these provisions to indicate that the goods in respect of which an order of confiscation or penalty can be passed under Sections 111 and 112 of the Act must be goods seized under the provisions of Section 110 of the Act. The period of six months mentioned in Section 110 relates only to the seizure of the goods and not to validity of the notice under Section 124 of the Act. Section 124 does not lay down any period within which the notice required by it has to be given. 14. A similar view is taken by a single Judge of the Punjab High Court in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents an opportunity to apply for an order under Section 516A of the Code of Criminal Procedure to the learned Magistrate before who the criminal proceedings were pending. Pursuant to such liberty an application was made on behalf of the prosecution under Section 516A of the Code of Criminal Procedure on July 27,1972. In the said application, the partnership firm and the two of its partners filed an application before the learned Magistrate inter alia stating that they agreed not to transfer or alienate the seized items without the written permission of the Court. On the said application on August 22, 1972 the learned Magistrate passed the following orders :- "On the accused executing a bond in the sum of Rs. 5,52,000/- with two sureties of equal amount, the complainant shall deliver to them all the silver ingots and the silver pieces seized by him on 23/24-1-1969 and as mentioned in the panchnama and on usual conditions, except samples produced in Court." On the accused executing a bond with one surety in the sum of Rs. 15,000/- with one surety of the like amount, the complainant shall deliver to them the Willy's Station Wagon No. MRW-9690 which was seized from the accused and on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to such final orders as may be passed by the Magistrate. In case before the criminal proceedings are over, the proceedings for confiscation of the goods before the Customs Authorities are completed and an order for confiscation is made, then the Customs Authorities will be at liberty to apply to the learned Magistrate to pass appropriate orders in respect of such items of goods or things which may be confiscated. Such compliance with the order of Magistrate either upon disposal of the proceedings or upon disposal of the adjudication's proceedings under the Act will be subject to the right of the aggrieved party to adopt such legal proceedings as may be available in accordance with law. So far as the calculating machine is concerned, Mr. Mehta on behalf of the petitioners states that the petitioners will produce the same as and when required in adjudication's proceedings before the Customs Authorities without prejudice to the petitioners' rights and contentions. So far as the Station Wagon is concerned, the same continues to remain with the Customs Authorities as no bond contemplated by the order of Magistrate has been executed by the petitioners. So far as books of account and doc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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