KARTHIKEYAN v. COLLECTOR CUSTOMS — 1970 DIGILAW 205 (KER)

Judgment :- 1. The petitioner is as exporter of Rose Wood Timber residing within the Corporation of Calicut. On 4 8 1969 the Central Excise Inspector, Divisional P. & T. Unit, Kozhikode,; searched the residential premises of the petitioner as per an authorisation from the Assistant Collector of Central Excise, Kozhikode who is the second respondent, and recovered from his premises 89 bottles of foreign liquor, another bottle containing 4 ounces of foreign liquor, 2 sets poni transistors, 2 foreign radios, 2 binoculars and 18 empty bottles used as containers for foreign liquor along with a few documents. The petitioner was not then in the house; and the search and the recovery were made in the presence of his son. A statement was recorded from him by the Inspector on the spot; and subsequently on 8 81969 the petitioner also gave a statement regarding the articles seized from the premises in his possession. This was followed by the usual investigation by the Central Excise Department, and a notice Ext. PI dated 1211970 to the petitioner from the first respondent, the Collector of Customs and Central Excise, stating that it appeared to him that the articles seized were of foreign origin liable for confiscation under S. III (d) of the Customs Act, 1962 and that an offence was committed by the petitioner under S.11 of the Act read with S.3 (2) of the Import and Export Control Act, 1947 and calling upon the petitioner to show cause why a penalty should not be imposed on him under S.112 (b) of the Act, and why the said articles should not be confiscated under S. III (d). Ext. PI was despatched only on 4 21970; and it was received by the petitioner on 10 21970. The petitioner submitted an explanation, Ext. P2, dated 28 21970, regarding possession of the above articles by him; and he also contended that, as the show-cause notice was received by him only after six months of the seizure and there was no extension of that period by the Collector, he was entitled to the return of the goods. The contention obviously is based upon the provisions of S.100 of the Customs Act. Ext. P2 was followed by a notice, Ext. P3 dated 14 1970, fixing the case for hearing to 29 41970. The petitioner by his letter Ext. The contention obviously is based upon the provisions of S.100 of the Customs Act. Ext. P2 was followed by a notice, Ext. P3 dated 14 1970, fixing the case for hearing to 29 41970. The petitioner by his letter Ext. P4 dated 20-4-19/0 protested to the posting of the case without deciding his claim for the return of the goods; and he also applied for a true copy of the order, if any, made by the Collector to extend the. time under S.110 of the Act. The 1st respondent, by letter Ext. P6 dated 2 51970, informed the petitioner that he had extended the time for issue of the show cause notice by one month from 4 21970 in exercise of the powers conferred on him under S.110 of the Act. The petitioner again by his letter Ext. P7 dated 18 51970, applied for a true copy of the above order, to which the first respondent replied by letter, Ext. P8 dated 161970, reiterating his previous position, namely that he has on 2 21970 extended the time by one month from 4 2 1970. The petitioner protested to the above communication by his letter, Ext. P9 dated 5 6 70; and he again requested for a true copy of the above order. On 8 71970, the first respondent issued a notice Ext. P11, posting the case for hearing to 181970, and informed the petitioner that if he failed to appear with all documents and other evidence in support of his defence, the case will be considered and disposed of ex¬parte. Thereupon the petitioner filed this writ petition praying for a writ of mandamus or other appropriate writ or order directing the first respondent to release the goods seized from him on 4 81969. 2. There is no dispute that Ext. P 1 was despatched on 4-2-1970. On the question whether there was an extension of time as stated in Ext. P8 and the circumstances under which it was extended, the first respondent states as follows in Para.5 of his counter-affidavit: "It is submitted that the then Collector Shri. M. C. Das signed the draft of Ext. P1 on 1211970- Ext. PI is also dated the same day. It was actually despatched from the first respondent's office on 4-2-1970. The delay it) the despatch of Ext. P1 on 1211970- Ext. PI is also dated the same day. It was actually despatched from the first respondent's office on 4-2-1970. The delay it) the despatch of Ext. P1 was brought to the notice of the then Collector on 2 21970; and he extended the time for issue of notice by one month on the same date in exercise of the power vested in him by the proviso to clause (2) of S.110 of the Customs Act, 1962." The correctness of the above statement is not disputed. The counsel for the petitioner rightly submitted his arguments only on the basis of sub-section (2) of S.110. It reads: "110(1) x x x x (2) Where any goods are seized under sub-section (1) and ho notice in respect thereof is given under clause (a) of S.124 within six months on 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 Collector of Customs for a period not exceeding six months". He first contended that the period of six months mentioned in the above provision should be reckoned from the date of seizure of the goods to the date of receipt of notice by him under S.124 (a), and not to the date of despatch of the notice. He submitted that the use of the word given in sub-section (2) shows that the notice must be actually served on the person, and that it was not sufficient that the notice was despatched. The question has to be decided on first impressions, as it does not appear to have been covered by any decision. S.124 (a) deals with issue of show cause notice before confiscation of the goods etc; and that section also states that the owner of the goods or the person on whom the penalty is proposed to be imposed shall be given notice in writing. That by itself does not give any indication whether the relevant date is the date of issue of the notice or the date of receipt of the notice by the person concerned. S.153 of the Act deals with service of order, decision, etc. and it reads: "153. Service of order, decision, etc. That by itself does not give any indication whether the relevant date is the date of issue of the notice or the date of receipt of the notice by the person concerned. S.153 of the Act deals with service of order, decision, etc. and it reads: "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 to toe person for whom it is intended or to bis agent; or (b) if the order, decision, summons or notice cannot be served in the manner provided in clause (a) by affixing it on the notice board of the Customs House." The above provision shows that a notice issued under the Act can be served by sending it by registered post to the person for whom it is intended or to his agent, and that, if it cannot be served in that manner, it can be served by affixing on the notice board of the Customs Office. It gives an indication that in giving notice under the Act. receipt of the same by the person concerned is not relevant; but what is relevant is issuing of the notice in any one of the manners provided in that section. In this view of the matter, it follows that the show cause notice in this case has been given to the petitioner under S.110 of the Act within the prescribed period of 6 months, as it has been admittedly sent by registered post within that time. 3. Assuming that it is the date of receipt of notice by the person concerned which is relevant, the question for consideration is whether an extension' of the period of 6 months mentioned in S.110 (2) of the Act can be made by the Collector without hearing the person concerned. Counsel for the petitioner submitted that such extension can be made only on sufficient cause being shown; and that as an extension would affect the vested right of a person to get the goods released, if the show cause notice is not issued within the prescribed period, no order extending the time can be passed by the Collector without hearing the person concerned and giving him an opportunity to show cause against the extension. In support of the above contention, counsel brought to my notice a Division Bench decision of the Calcutta High Court in Charandas v. Asst Colle-cort of Customs (AIR. 1968 Calcutta 28). In that case, the premises of the appellant was searched by the Customs authorities on 19-3-1963; and certain articles ware seized by them. On 18-9-1963 the Additional Collector of Customs made an exparte order extending the period for issuing the show cause notice under S.110 (2) of the Act by 4 months. Before the expiry of that period another application was made by the Investigating Officer on 311964. That application however happend to be ordered by the Collector only on 20 21964; and he passed another ex-parte order extending the time by two months. It is not very clear from the decision what exactly was the relief sought for by the appellant in that case. The contention was that the above two orders extending the period under S.110 (2) of the Act was bad, as they were passed without hearing the appellant. Sinha CJ. who delivered the judgment of the Court is dealing with the above contention stated as follows: "As long as the period of issuing notice has not expired, it might be one thing. But quite a different set of circumstances arise when the period has expired and the right to the return of the goods is vested in the person from whose possession the goods are seized-If you are to take away the right you can only do that for a "sufficient cause". How can the officer concerned decide as to whether a "sufficient cause" has been shown so as to divest a vested right, unless he hears the parties affected...! am not suggesting that the hearing should be as if it was in a court of law. But some opportunity would have to be given to a person who has a vested tight to the return of the goods to be heard in his defence before that right can be taken away. Even though it is an executive action, the statutory provisions require that a judicial approach should be adopted." Speaking with great respect, I am not able to endorse the view contained in the above statement. The learned Chief Justice thinks that the period fixed under S.110(2) of the Act can be extended even after the expiry of the said period. Even though it is an executive action, the statutory provisions require that a judicial approach should be adopted." Speaking with great respect, I am not able to endorse the view contained in the above statement. The learned Chief Justice thinks that the period fixed under S.110(2) of the Act can be extended even after the expiry of the said period. In my view, no question of extension of time can arise after the time has expired. When the time expires, the person from whose possession the goods were seized, gets the right for the return of the goods. The extension can only be before that right accrues; and if the time is extended, the right does not accrue. Again according to the learned Chief Justice, different considerations arise in the matter of extension before the expiry of the period and after the expiry of the period. I am unable to find any scope for the differentiation in the light of the language used in the section. All that the section says is that the extension can be made only "on sufficient cause being shown". Whether the extension is before the expiry of the period or after the expiry, it would always affect the right of the person, whose goods have been seized. In the former case, he would have got the goods returned to him after the expiry of the period, but for the extension; and in the latter case, his right to get them returned is taken by virtue of the extension. If the power of extension is a quasi-judicial power, the authority exercising it has to give a reasonable opportunity for being beard to the person who would be affected by the exercise of that power, whether it is exercised before the expiry of the period or after its expiry. The learned Chief Justice himself states that the extension of time under S.110 is an executive action, and that it should be exercised with a judicial approach. I respectfully agree with this statement, in the sense that any administrative or executive decision should be made on a just and proper consideration of the relevant facts and circumstances of the case. The Collector of Customs can extend the period of six months fixed in S.110 (2) of the Act only "on sufficient cause being shown". I respectfully agree with this statement, in the sense that any administrative or executive decision should be made on a just and proper consideration of the relevant facts and circumstances of the case. The Collector of Customs can extend the period of six months fixed in S.110 (2) of the Act only "on sufficient cause being shown". The cause has to be shown before him by the officer investigating the case and who wants the extension. In that matter, the accused does not come into the picture; and there is no question of hearing him. The Collector has to be satisfied on the facts placed before him that there is sufficient cause for extension. I, therefore, reject the contention that the extension of time allowed by the Collector in the instant case is bad as it was done without notice to the petitioner. 4. Counsel for the petitioner also contended that there has been no proper extension of time in this case, as there was no sufficient cause for the extension of time. It is clear from the facts of this case that the time was extended due to some omisison or negligence is the office of the Collector of Customs in despatching the notice which was signed by him on 12 11970. When it was brought to his notice, it was only just and proper that he extended the time, so that the proceedings may not be defeated; and he has done so before the expiry of the period. Therefore the objection that the extension has been done without sufficient cause cannot be sustained. 5. In the result, this Original Petition is dismissed. There will be no order as to costs.