- (1.) The question for our consideration in this appeal is whether the provisions of Sec. 123 of the Customs Act, 1962 (the Act) would be attracted in a case where the retention of the goods has become illegal under Sec. 110(2) of the Act because no notice as required under the said provision was served within the statutory period.
(2.) The factory premises of the appellant-firm were raided by the Custom authorities on 26-5-1969 and 28 packages of synthetic fabrics of foreign origin were seized. The seizure was made under Sec. 110 of the Act. By the order dated 27-11-1969 the Collector of Customs extended the period for the issue of show-cause notice prescribed under Sec. 124 of the Act by two months from the date of the order. Finally, the show-cause notice in terms of Sec. 124(l)(a) of the Act was received by the appellant-firm on 26-12-1969. The Assistant Collector, Bombay by the order dated 24-2-1971 under Sec. 112(b) of the Act, confiscated the goods in dispute and also imposed a penalty of Rs. 50,000 on the appellant. The appeal filed against the order of the Assistant Collector was dismissed by the Appellate Collector. The appellant challenged the orders of the Assistant Collector and the Appellate Collector by way of a writ petition under Arts. 226/ 227 of the Constitution of India before the High Court of Gujarat at Ahmedabad. The High Court dismissed the writ petition with cost. This appeal, by way of special leave, is against the judgment of the High Court.
(3.) It was contended before the High Court that the goods in dispute were seized by the Custom authorities on 29-5-1969 and the notice as contemplated by Sec. 124(l)(a) read with Sec. 110 of the Act was given on 19-12-1969. The said notice, having been served on the appellant after the statutory period of six months, was invalid and illegal. It was further contended that the notice being invalid, the appellant was entitled to the return of the seized goods under Sec. 110(2) of the Act and further the Custom Authorities were debarred from holding the adjudication proceedings in respect of the goods in dispute. In other words, it was contended that once the notice under Sec. 110(2) of the Act is invalid, no proceedings for confiscation of the seized goods can thereafter continue. The High Court, relying upon the judgment of this Court in Assistant Collector of Customs v. Charan Das Malhotra, (AIR 1972 SC 689 : (1971 (1) SCC 697), held the show-cause notice under Sec. 110(2) read with Sec. 124(l)(a) of the Act to be invalid but even then found the adjudication proceedings and the confiscation order to be valid on the following reasoning : "The consequence is that the order passed by the Collector of Customs and Central Excise dated 27-11-1969 extending the period of six months provided in Sec. 110 by two months from 26-11-1969 is bad and illegal in view of the provisions of Sec. 110(2) of the Act. But the question then arises is whether the petitioner is entitled to return of the goods seized, once the order of confiscation is passed under Sec. 111 of the Act. So far as Sec. 110 is concerned, it deals with the seizure of the goods and the return thereof. In other words, if the said provisions are not satisfied the goods seized have to be returned. Section 110 of the Act deals with the seizure of the goods. Section 124 of the Act deals with the confiscation and imposition of the penalty. The provisions relating to the seizure of the goods and those relating to the confiscation of the goods or imposition of penalty stand on different footing. Section 124 of the Act does not lay down any period within which the notice required by it has to be given. The period laid down in Sec. 110(2) affects only the seizure of the goods and not the validity of the notice. In the present case, after the proceedings of seizure, proceedings for confiscation and imposition of penalty were proceeded with and the proceedings ended in the order of confiscation and imposition of penalty vide order Ex. 'D'. As the goods have already been ordered to be confiscated the question of return of goods after the period of six months as mentioned in Seel 10 of the Act cannot survive." The High Court further noticed the provisions of Secs. 110, 111, 112 and 124 of the Act and observed as under : "These words are of widest import and they cannot be given a restricted meaning as is sought to be given by the learned Advocate for 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 Secs. 111 and 112 of the Act must be goods seized under the provisions of Sec. 110 of the Act. The power to seize the goods under Sec. 110 is distinct and separate from the power of confiscation and imposition of penalty as provided in Secs. 111 and 112 of Act. The later provisions are not absolutely dependent on the provisions of Sec. 110 of the Act.";