TMI Blog1989 (5) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... M.N. Venkatachaliah, JJ. [Judgment per : Pathak, CJI]. - This appeal by certificate granted by the High Court of Calcutta is directed against the judgment dated 31st July, 1970 of that High Court partly allowing a writ petition arising out of proceedings under the Customs Act, 1962. 2. On 5th May, 1966, noticing an advertisement in a newspaper offering imported manual and electric typewriters, adding and calculating machines, the Customs authorities raided the premises of M/s. Typewriters and Stationery Operation Private Limited, Calcutta, on the same day and recovered fifteen typewriters, adding and calculating machines. The machines had been sold to the company by R.N. Bagh, who in turn disclosed that he had purchased them from the crew members of some vessels. On 7th May, 1966, the Customs Officers searched the residence and business premises of M/s. Central Typewriter Company and recovered several typewriters and calculating and adding machines. From some documents seized during the raid and statements recorded, it appeared that there was a conspiracy between the respondents and some of the crew members of certain vessels where it was agreed that the respondents would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eover, was not communicated to the respondents before the expiry of six months from the date of the seizure, the order of extension was invalid and the respondents had become entitled as of right to the return of the goods. The writ petition was allowed, and the proceedings initiated by the respondents against the appellants were quashed by the learned Single Judge by his judgment and order dated 11th December, 1969. 6. The appellants appealed to the Appellate Bench and the Appellate Bench of the High Court by judgment dated 31 July, 1970 allowed the appeal in part, quashing the order of extension dated 3 November, 1966 and directing the appellants to restore the machines and documents seized from the respondents. The Customs authorities were permitted to initiate and complete such other proceedings against the respondents as were open to them in law. 7. The appellants now appeal to this Court insofar as the judgment and order of the Appellate Bench proceeds against them. 8. Section 110(1) of the Customs Act, 1962 provides that if the proper officer has reason to believe that any goods are liable to confiscation under that Act he may seize such goods. Section 110(2) provides ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iance was placed by learned Counsel for the respondents on Charan Das Malhotra (supra). That decision was rendered by two learned Judges of this Court. Reference was also made in M/s. Lokenath Tolaram etc. v. B.N. Rangwani and Others - 1983 (13) E.L.T. 1520 (S.C.) = 1974 (2) SCR 199 which was a decision rendered by four learned Judges of this Court, and in which reference was made to Charan Das Malhotra (supra). The learned Judges hearing this appeal were of the opinion that the view taken in the two cases required reconsideration, and therefore this appeal was referred to a larger Bench for a decision on the question whether the Collector is bound to issue notice to the persons from whose possession the goods are seized and to give him an opportunity to make his representation on the point whether the time for issuing notice under Section 124(a) of the Act should be extended beyond six months. That is how the appeal has come before us. 12. In Charan Das Malhotra (supra) the Court referred to the consideration that seizure was authorised under Section 110(1) on the mere "reasonable belief" of the concerned officer, that it was an extraordinary power and that therefore Parliament ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning extension of the time. The Court did not specifically give the stamp of approval to the law laid down in Charan Das Malhotra (supra). 13. There is no doubt that the words "on sufficient cause being shown" in the proviso to Section 110(2) of the Act indicates that the Collector of Customs must apply his mind to the point whether a case for extending the period of six months is made out. What is envisaged is an objective consideration of the case and a decision to be rendered after considering the material placed before him to justify the request for extension. The Customs Officer concerned who seeks the extension must show good reason for seeking the extension, and in this behalf he would probably want to establish that the investigation is not complete and it cannot yet be said whether a final order confiscating the goods should be made or not. As more time is required for investigation, he applies for extension of time. The Collector must be satisfied that the investigation is being pursued seriously and that there is need for more time for taking it to its conclusion. The question is whether the person claiming restoration of goods is entitled to notice before time is exte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further investigation, call for an extension of time. It is impossible to conceive that a person from whose possession the goods have been seized with a view to confiscation should be entitled to know and to monitor, how the investigation against him in proceeding, the material collected against him at that stage, and what is the utility of pursuing the investigation further. These are matters of a confidential nature, knowledge of which such person is entitled to only upon the investigation being completed and a decision being taken to issue notice to show cause why the goods should not be confiscated. There can be no right in any person to be informed midway; during an investigation, of the material collected in the case against him. Consequently, while notice may be necessary to such person to show why time should not be extended he is not entitled to information as to the investigation which is in process. In such circumstances, the right of a person, from whose possession the goods have been seized, to notice of the proposed extension must be conceded, but the opportunity open to him on such notice cannot extend to information concerning the nature and course of the investiga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or of Central Excise and Assistant Collector, Bangalore - A.I.R 1968 Mysore 89 where the High Court of Mysore has held that no notice is necessary to the person from whose possession the goods are seized when the Collector proceeds to consider whether the original period of six months should be extended. Reliance has also been placed on Sheikh Mohammed Sayeed v. Assistant Collector of Customs for Preventive and Others - A.I.R. 1970 Calcutta 134 which proceeds on the view that the Collector has to satisfy himself only subjectively on the point whether extension is called for. In Karsandas Pepatlal Dhineja Others v. Union of India and Another - 1981 E.L.T. 268 the High Court defined the implications of the use of the words "on sufficient cause being shown" in a statutory proceeding. None of these cases convince us that the person from whose possession the goods have been seized is not entitled to notice of the proposal to extend the period. 16. In our opinion, the person from whose possession the goods have been seized is entitled to notice of the proposal before the Collector of Customs for the extension of the original period of six months mentioned in Section 110(2) of the Cus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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