Actual service of show cause notice required before adjudication can begin; unserved postal notice is insufficient.

Under the Foreign Exchange Regulation Act, adjudication proceedings commence only when the show cause notice is actually served in the manner prescribed by the special rules. A notice sent by registered post does not amount to service if it is returned unserved, because the statutory scheme requires delivery, tender, or, on failure, affixture at the relevant premises; the general presumption under the General Clauses Act cannot override that special requirement. Where no affixture was effected after postal non-service, the proceedings did not begin and the extended retention period for the seized currency was unavailable, making retention beyond one year unjustified.

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Issues: Whether proceedings for adjudication under the Foreign Exchange Regulation Act, 1947 commenced only upon actual service of the show cause notice, so as to permit retention of the seized currency beyond one year under Section 19-G.

Analysis: The statutory scheme required adjudication proceedings to begin with issuance of a show cause notice, and the prescribed service rule contemplated delivery or tender, registered post, or, where service could not be effected, affixture at the relevant premises. Although Section 27 of the General Clauses Act, 1897 creates a presumption of service by registered post, that presumption could not prevail where the notice was returned unserved and the special rules indicated a different intention by insisting on actual service or affixture. Since the department did not effect service by affixture after the postal endorsement of non-service, the notice could not be treated as served and the adjudication proceedings could not be said to have commenced.

Conclusion: The extended period under Section 19-G was unavailable, and retention of the seized money beyond one year was not justified.

Ratio Decidendi: Where the governing statute and rules prescribe actual service of notice, or affixture upon failure of service, a notice sent by registered post and returned unserved does not amount to service, and the proceedings do not commence for the purpose of extending the period of retention.

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