Gujarat High Court Releases Confisticated Cash, Goods As GST Dept. Delayed Issuance Of SCN Beyond Statutory Time Period

The division bench of Justice Sonia Gokani and Justice Hemant M. Prachchhak has observed, "it is quite unfathomable as to why the time limit is not adhered to and issuance of the show cause notice has been delayed beyond the statutory time period and hence, intervention will be necessary at the end of this Court by keeping open the rights of the respondents to initiate adjudication process afresh in accordance with law."

The petitioner is a sole proprietor of JBM Textiles, Surat and is engaged in the business of textile trading and export. The Directorate of Revenue Intelligence (DRI) on receipt of intelligence, searched the office premise of the petitioner where the cash belonging to the petitioner and his family members and two mobile phones also were seized by the officers.

A show cause notice came to be issued after the lapse of 19 months in respect of the alleged illegal export by Amira Impex in connivance with a number of other persons which included the petitioner, as alleged by the respondents/ department.

The petitioner averred that 19 months elapsed after the seizure. No notice had been issued within a period of six months as statutorily prescribed from date of the seizure, the seized cash and mobile phones were needed to be returned to the petitioner and his family.

The challenge made is also to the alleged arbitrary action on the part of the respondents-authority in retaining the cash amount of Rs.35,99,000/- along with two mobile phones and other material seized from the office of the petitioner on 03.04.2019. The seizure of goods and the cash by the respondents is under section 110 of the Customs Act and Section 124 of the Act provides for the show cause notice to be issued for the confiscation of the goods.

In the affidavit-in-reply, the department denied that there has been any violation of the provision of law. According to the respondents, since it is a case of a large scale illegal availment of the export benefits, no indulgence is necessary.

The issue raised was whether the show cause notice given under Section 124 of the Act after six months of seizure can be sustained under the law.

Section 124 of the Act provides that no order of confiscation of any goods or imposing of penalty on any person is to be made under Chapter XIV, unless the notice has been served upon the person who is the owner of the goods, in writing with prior approval of the officer of customs not below the rank of an Assistant Commissioner of Customs informing the grounds on which it is to be confiscated or for imposition of penalty.

The court noted that the period prescribed under the law has already lapsed long before the show cause notice has been issued, this Court needs to intervene for this being a clear violation of statutory provisions of section 110 and other provisions of Customs Act, the items are required to be returned to the petitioner.

The court directed the department to return the cash and articles/goods to the petitioner not later than the period of eight weeks seized from the petitioner.

"Respondents shall be at liberty to initiate action of adjudication, in accordance with law, if permissible under the law otherwise," the court added.

Case Title: Amit Harishkumar Doctor Versus Union of India

Citation: R/Special Civil Application No. 4495 of 2021

Counsel for Petitioner: Advocate S.S.Iyer

Counsel for Respondents: Advocate Priyank P. Lodha

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