Mandatory hearing and inquiry before confiscation of transit goods invalidates premature notices and payment-in-lieu demands.
Section 16A was construed to require notice, hearing and the prescribed inquiry before confiscation of goods in transit under sub-sections (4) and (5). The proviso was held to govern the section as a whole, so the confiscatory stage could not be reached until those safeguards were complied with; only then could the option to pay in lieu of confiscation under sub-section (6) arise. Notices issued straightaway on the assumption of confiscation were therefore inconsistent with the statutory sequence and invalid. The confiscation notices were quashed, with liberty to proceed afresh in accordance with law after following the mandatory procedure.
Issues: (i) Whether the proviso to section 16A governing confiscation of goods in transit required the officer to give the affected person an opportunity of being heard and to conduct the prescribed inquiry before taking action for confiscation under sub-sections (4) and (5); (ii) whether notices issued straightaway on the footing of confiscation and the option to pay in lieu of confiscation under sub-section (6) were valid.
Issue (i): Whether the proviso to section 16A governing confiscation of goods in transit required the officer to give the affected person an opportunity of being heard and to conduct the prescribed inquiry before taking action for confiscation under sub-sections (4) and (5).
Analysis: The scheme of section 16A distinguishes the stage of seizure from the stage of confiscation. The proviso was construed as applying to sub-sections (1) to (5) as a whole, because the language used was "under this section". Accordingly, before confiscation could be ordered, the officer was bound to hear the affected person and make the prescribed inquiry. Only after that stage could the question of confiscation be considered, and only then would sub-section (6) operate to offer an option to pay in lieu of confiscation.
Conclusion: The proviso was mandatory and applied before confiscation under section 16A(4) or 16A(5) could be effected.
Issue (ii): Whether notices issued straightaway on the footing of confiscation and the option to pay in lieu of confiscation under sub-section (6) were valid.
Analysis: The notices showed that the officer proceeded directly on the basis that confiscation would follow once the goods were seized, without first following the mandatory hearing and inquiry required by the proviso. The counter-affidavits also failed to show that such an opportunity had been afforded. The notices therefore reflected a wrong approach to the statutory sequence and bypassed the procedural safeguard built into the provision.
Conclusion: The notices were invalid and liable to be set aside.
Final Conclusion: The confiscation notices were quashed, and the officers were left free to proceed afresh in accordance with law after complying with the statutory requirement of hearing and inquiry.
Ratio Decidendi: Where a confiscation provision is preceded by a proviso requiring notice, hearing, and inquiry before confiscation, those safeguards must be complied with before the authority can invoke the confiscatory and penalty-paying stages of the provision.
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