1987 (2) TMI 78 - HC - Customs

Court rules detention order invalid under Article 226, orders release of goods.

The Court ruled in favor of the petitioners, holding the detention order invalid under Article 226 of the Constitution. It found the extension of time ... Seizure - Export Issues:1. Validity of detention order under Article 226 of the Constitution.2. Extension of time limit for issuing show cause notice under Section 110 of the Customs Act, 1962.3. Legality of detention and seizure of goods suspected as 'antiquities'.4. Rights of petitioners as dealers in handicrafts and the impact of delay in permitting export.Analysis:Issue 1: Validity of detention order under Article 226 of the ConstitutionThe petition sought to revoke an order of detention and permit the export of items detained by Customs Authorities. The petitioners argued that the detention was causing financial and reputational harm. The Court noted the delay in permitting export and the petitioners' standing as handicraft dealers being jeopardized.Issue 2: Extension of time limit for issuing show cause notice under Section 110 of the Customs Act, 1962The Court observed that no show cause notice was given before seizing the goods, and an extension of time for issuing such notice was not a valid exercise of powers under Section 110. Citing a Supreme Court decision, the Court emphasized the quasi-judicial nature of the power to extend time, requiring a judicial approach and an opportunity for the affected party to be heard.Issue 3: Legality of detention and seizure of goods suspected as 'antiquities'The petitioners contended that the detained goods were not 'antiquities' and had obtained certificates to support this claim. The Court highlighted that no show cause notice was given before the seizure, rendering the seizure invalid as per legal precedents. The Court held that the Customs Authorities' communication did not confer validity on the seizure, emphasizing the need for due process.Issue 4: Rights of petitioners as dealers in handicrafts and impact of delay in permitting exportThe Court considered the petitioners' argument that the delay in permitting export was causing immense loss and jeopardizing their business. The Court noted the petitioners' reliance on a Delhi High Court decision regarding the review of clearance orders. Despite doubts on the correctness of that view, the Court found the matter to be covered by the Supreme Court's decision. The Court emphasized the petitioners' entitlement to relief and ordered the release and export of the detained goods.In conclusion, the Court made the rule absolute in favor of the petitioners, directing the respondents to pay costs and stay the operation of the order for a week.