Customs Act: Extension Denied, Restoration Upheld.

The Court determined that the power of the Collector of Customs under the proviso to Section 110(2) of the Customs Act is quasi-judicial, requiring a judicial approach and an opportunity for the affected party to be heard before an extension is granted. Regarding the extension of the period for giving notice under Section 124(a), the Court held that the right to restoration of goods becomes absolute upon the expiry of the initial or extended period, and any extension granted after this period is invalid as it defeats the vested right of the respondent. The appeal was dismissed, upholding the restoration of seized watches to the respondent.

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Issues Involved:
1. Nature of the power of the Collector of Customs under the proviso to the second Sub-section of Section 110 of the Customs Act, 52 of 1962.
2. Whether the Collector can extend the period for giving notice under Section 124(a) of the Customs Act after the initial or extended period has expired.

Detailed Analysis:

1. Nature of the Power of the Collector of Customs:
The primary issue revolves around the nature of the power vested in the Collector of Customs under the proviso to Section 110(2) of the Customs Act. The Court examined whether this power is administrative or quasi-judicial.

Legal Framework and Interpretation:
Section 110(1) allows seizure of goods if a proper officer has "reason to believe" they are liable to confiscation. Section 110(2) mandates the return of seized goods if no notice under Section 124(a) is given within six months, unless extended by the Collector for a period not exceeding six months, upon "sufficient cause being shown."

Court's Reasoning:
The Court emphasized that the power to extend time under the proviso requires a judicial approach. The phrase "sufficient cause being shown" necessitates an inquiry into the facts presented, implying a quasi-judicial function. The Collector must determine on materials placed before him whether an extension is warranted, ensuring the decision is not arbitrary or mechanical.

Precedents and Analogies:
The Court referred to cases like *De Verteuil v. Knaggs* and *Kraipak v. Union of India*, highlighting the necessity of a fair inquiry when determining sufficient cause. The Court also noted that the difference in language between "reason to believe" in Section 110(1) and "sufficient cause being shown" in the proviso to Section 110(2) indicates a deliberate legislative intent to impose a higher standard for extending the period.

Conclusion:
The power under the proviso is quasi-judicial, requiring a judicial approach and an opportunity for the affected party to be heard before an extension is granted.

2. Extension of the Period for Giving Notice:
The second issue concerns whether the Collector can extend the period for giving notice under Section 124(a) after the initial or extended period has expired.

Facts and Procedural History:
The respondent's business premises were raided, and watches were seized on March 19, 1963. The initial six-month period expired on September 19, 1963, and an extension was granted until January 19, 1964. A further extension was granted on February 20, 1964, after the first extended period had expired.

Contentions:
The appellant argued that the liability to return seized goods is not absolute and can be extended within an overall period of one year. The respondent contended that the right to restoration of goods vested upon the expiry of the initial or extended period and could not be divested by an order passed after the period had lapsed.

Court's Analysis:
The Court held that the right to restoration of goods accrues upon the expiry of the initial or extended period. An order for extension passed after this period is invalid as it defeats the vested right of the respondent. The Court emphasized that the Collector's power to extend time must be exercised within the prescribed period, and any extension beyond this period without a prior order is not permissible.

Conclusion:
The Collector cannot extend the period for giving notice under Section 124(a) after the initial or extended period has expired. The right to restoration of goods becomes absolute upon the expiry of these periods.

Separate Judgments:
The judgment was delivered by J.M. Shelat, J., with no separate judgments from other judges.

Final Decision:
The appeal was dismissed with costs, upholding the judgment of the Division Bench, which ordered the restoration of the seized watches to the respondent. The Court did not address the issue of the vagueness of the notice under Section 124(a) as it was not challenged before them.

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