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Judgment
Vinod K. Sharma J.
The petitioner prays for issuance of a writ in the nature of certiorari to quash the impugned order dated February 28, 2012, extending the period of six months for issuance of show-cause notice, under the proviso to section 110(2) of the Customs Act, 1962. Section 110(2) of the Customs Act (hereinafter "Act"), reads as follows:
(2) Where any goods are seized under sub-section (1) and no notice in respect thereof is given under clause (a) of section 124 within six months of 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 Commissioner of Customs for a period not exceeding six months.
The learned counsel for the respondents opposed the writ petition, on the ground that ex parte order passed against the petitioner is appealable. Therefore, this writ petition is not maintainable as alternative statutory remedy is available to the petitioner.
The petitioner/company carries on business of importing and trading in fabric items. The goods of the petitioner were seized u/s 110(1) of the Act, on August 29, 2011, under a mahazar by the officers of the second respondent, on the ground of misdeclaration and misclassification of the goods.
As per the provisions of the Act, it was obligatory on the respondents to issue notice u/s 124 of the Act within six months of the seizure of the goods. On expiry of the period of six months, the goods are bound to be released to the party, with liberty to the respondent to proceed with the enquiry and impose duties and penalties.
However, the proviso to section 110(2) gives liberty to the customs authority to extend the period of six months, but after following due process of law and giving personal hearing to the aggrieved party. It is also obligatory on the part of the customs authority to give justification for extending the period and further give personal hearing to the party, to con-test the justification of the customs officer in not taking action within the stipulated period of six months.
It is not in dispute that the period of six months was to expire on February 29, 2012. It was for this reason, the respondents issued a notice to the petitioner on February 21, 2012 calling upon the petitioner to show cause as to why the period be not extended by six months and to give an opportunity of hearing to the petitioner it was directed to appear before the authorities on February 24, 2012.
The petitioner received the said notice on February 23, 2012. Immediately, the petitioner submitted a reply and informed the respondents that it was not possible for the representative of the petitioner to be present in such a short notice and requested for further time. The impugned order was passed, by considering the reply submitted by the petitioner, but without giving opportunity of hearing, by ignoring the request of the petitioner for grant of further time.
The question to be decided in this case, therefore, is whether the issuance of notice of three days would amount to compliance of the principles of natural justice or it is to be held that the respondents purely complied with the formality of show-cause notice, without giving an opportunity to the petitioner to represent his case.
The answer to this question is against the Department. Section 110(2) of the Act gives six month''s time to take action against the defaulter in accordance with law. Furthermore, sufficient cause is required to be shown for extension of time. The reading of the proviso to section 110(2) shows that it is only as sufficient cause being shown that the period can be extended by six months. The burden is on the Department to show cause as to why the necessary formalities could not be completed in six months as provided. The show-cause notice to the party therefore is not a mere formality, but a statutory right to oppose the decision for extension of time. Issuance of a notice of three days has defeated the right of the petitioner to effectively defend its case. The petitioner had not only submitted reply, but also requested for more time, so as to represent the case before the Department. The Department in hurry to pass the order before February 29, 2012, passed an ex parte order, by considering the objection filed by the petitioner, without giving an opportunity of personal hearing. The impugned order therefore on the face of it is in violation of principles of natural justice.
The object of fixing six months time for taking action is to ensure that the goods are not unnecessarily retained and the party is not made to suffer merely for want of adjudication by the customs authorities. The proviso also shows that the Department before extending the time is required to show sufficient cause. This stipulation is for the reason that the Department does not suffer in any way by release of goods, as its right to adjudicate and recover the duties and penalties stands protected.
Even seen from the point of equity, there is no justification in upholding the impugned order, which has been passed in violation of the principles of natural justice, as non-release of the goods is going to prejudice the rights of the petitioner, whereas after the release of the goods also, the respondents are protected as the Department can take action, not only to impose duty, but also penalty.
As the impugned order is passed in violation of the principles of natural justice and the statute, the alternative remedy of statutory appeal cannot be a bar to maintain this writ petition.
This order be not read to mean that the goods can be released without payment of admitted duties.
Writ petition is allowed. The impugned order is set aside. The petitioner shall be entitled to release of goods subject to payment of admitted duties and the right of the Department to hold enquiry and impose duties and penalties u/s 124 of the Act.
Connected miscellaneous petition is closed. No costs.