Court quashes extension order, orders return of G.C. notes. Petition dismissed on other reliefs.

The court partially allowed the writ petition, quashing the extension order and directing the respondent to return the G.C. notes to the petitioner. The petition was dismissed regarding other reliefs, including quashing the show-cause notices and prohibiting the continuation of confiscation proceedings. No order as to costs was made, considering the special circumstances of the case.

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Issues Involved:
1. Validity of the extension order for issuing show-cause notice.
2. Timeliness and legality of the show-cause notices.
3. Application of the principle of issue-estoppel to the confiscation proceedings.

Issue-wise Detailed Analysis:

1. Validity of the Extension Order:
The petitioner argued that the extension order was invalid as it was passed without notice to him and after the expiry of the initial six-month period provided under Sub-section (2) of Section 110 of the Customs Act, 1962. The court found that the initial six-month period for issuing the notice expired on September 28, 1970. The Collector's order dated September 2, 1970, extending this period was invalid as no notice was given to the petitioner. The subsequent order on March 19, 1971, extending the period was also invalid as it was passed after the expiry of the initial six months. Consequently, the petitioner had a vested right to claim the return of the G.C. notes. The court concluded that the extension order was bad and without jurisdiction, thus quashing it.

2. Timeliness and Legality of the Show-Cause Notices:
The petitioner contended that the show-cause notices issued on March 22, 1971, were invalid as they were issued beyond the initial six-month period without a valid extension. The court noted that Section 124 of the Customs Act does not prescribe a time limit for issuing show-cause notices, unlike Section 110 which deals with the seizure of goods. The failure to issue a notice within the prescribed period under Section 110(2) does not invalidate the show-cause notice under Section 124. Therefore, the court disagreed with the petitioner's contention, stating that the show-cause notices were not illegal despite being issued after the initial six-month period.

3. Application of Issue-Estoppel:
The petitioner argued that the confiscation proceedings were barred by the principle of issue-estoppel as he had already been acquitted in the opium case. The court rejected this contention, stating that confiscation is a judgment in rem, while the decision in the opium case is a judgment in personam. The parties and subject matter in both cases were different. Therefore, the principle of issue-estoppel did not apply, and the continuation of the confiscation proceedings was not barred.

Conclusion:
The court partially allowed the writ petition, quashing the extension order and directing the respondent to return the G.C. notes of Rs. 1,57,000 to the petitioner, subject to the rights of the Income-tax authorities. The petition was dismissed regarding other reliefs, including quashing the show-cause notices and prohibiting the continuation of confiscation proceedings. No order as to costs was made, considering the special circumstances of the case.

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