Court finds show-cause notice extensions invalid, orders return of seized goods.

The court held that the extensions of time for issuing the show-cause notice were granted without due hearing, making the retention of the seized goods unlawful. The adjudication proceedings were found to be void ab initio and without jurisdiction. Consequently, the writ petition was maintainable, and the court made the Rule absolute, ordering the return of the seized goods to the petitioners. The court did not delve into the merits of other points raised, as the primary issues were sufficient to decide the case.

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Issues Involved:
1. Legality of the search and seizure conducted by the Customs Department.
2. Validity of the extension of time for issuing the show-cause notice under Section 110(2) of the Customs Act, 1962.
3. Jurisdiction and propriety of the adjudication proceedings and the imposition of penalties.
4. Maintainability of the writ petition in light of the pending appeal.

Detailed Analysis:

1. Legality of the Search and Seizure:
The petitioners claimed that the search conducted by the Preventive and Intelligence Unit of the Customs Department on 2nd/3rd August 1966 was a "roving one" and that nothing incriminating was found at their residence. However, several pieces of jewelry and Indian currency notes worth Rs. 63,250/- were seized from their business premises. The petitioners contended that the goods seized were not contraband and were part of their legitimate business activities. The Customs Department, through their affidavit-in-opposition, stated that the search was conducted based on credible information and that the petitioners failed to produce any evidence of licit importation or possession of the seized items. The department also claimed that the seized goods were believed to be illicitly imported and thus liable for confiscation under the Customs Act.

2. Validity of the Extension of Time for Issuing the Show-Cause Notice:
The petitioners argued that the extensions of time for issuing the show-cause notice were made without their knowledge and in contravention of Section 110(2) of the Customs Act, which mandates that such extensions can only be granted on "sufficient cause being shown" and after providing an opportunity to the affected party. The court referred to the case of Charandas Malhotra v. Assistant Collector of Customs, where it was held that the power under the proviso to Section 110(2) is quasi-judicial and requires a judicial approach. The court observed that the extensions in this case were granted without due hearing, making the retention of the seized goods unlawful.

3. Jurisdiction and Propriety of the Adjudication Proceedings and the Imposition of Penalties:
The petitioners contended that the adjudication proceedings were irregular and unauthorized, as the goods in question were not contraband and could not be confiscated. They also argued that the show-cause notice issued on 29th July 1967 was improper as it was issued after the expiry of the extended period. The court noted that the adjudication proceedings commenced on 2nd February 1968, and the order of confiscation and penalty was passed on 18th April 1969. The court found that the proceedings were initiated and continued in violation of the statutory requirements, making them void ab initio.

4. Maintainability of the Writ Petition in Light of the Pending Appeal:
The respondents argued that the writ petition was not maintainable as the appeal preferred by the petitioners was still pending before the Central Board of Excise and Customs. They cited the case of Radha Kissan More v. E. Rajaram Rao, which held that when an alternative remedy is available and has been availed, the High Court should not interfere under Article 226 of the Constitution. However, the court distinguished the present case, stating that the proceedings were initiated and continued without jurisdiction and in violation of principles of natural justice. Therefore, the writ petition was maintainable despite the pending appeal.

Conclusion:
The court held that the extensions of time for issuing the show-cause notice were granted without due hearing, making the retention of the seized goods unlawful. The adjudication proceedings were found to be void ab initio and without jurisdiction. Consequently, the writ petition was maintainable, and the court made the Rule absolute, ordering the return of the seized goods to the petitioners. The court did not delve into the merits of other points raised, as the primary issues were sufficient to decide the case.

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