Seizure and disposal of gold jewellery invalidated; restoration or compensation ordered for equivalent gold or market value.

Seizure and summary disposal of privately owned gold jewellery without service of a notice or opportunity to be heard violated the statutory scheme governing seizure and confiscation and infringed the right to property and equality. Section 110 permits seizure but Sub-section (2) and Section 124 require timely notice and an opportunity to make representations, and sub-section (1A) exceptions demand cogent, intimated reasons before disposal. Disposal in absence of lawful notice and hearing rendered the action void and necessitated restitution; respondents were directed to restore equivalent gold weight or pay market value compensation for the seized jewellery.

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Issues Involved:

1. Legality of the seizure and disposal of the petitioners' gold jewellery without notice.
2. Violation of petitioners' rights under Article 300A and Article 14 of the Constitution of India.
3. Compliance with the provisions of the Customs Act, 1962, particularly Sections 110 and 124.
4. Entitlement of the petitioners to the return of gold jewellery or compensation equivalent to its market value.

Summary:

Issue 1: Legality of the seizure and disposal of the petitioners' gold jewellery without notice

The petitioners, Iranian nationals, had their gold jewellery seized by Customs officials at Mumbai Airport on 14 January 2018. The respondents initiated disposal proceedings without proper notice to the petitioners. The Assistant Commissioner of Customs issued a notice on 4 April 2018, but there was no record of it being received by the petitioners. The gold jewellery was disposed of on 1 June 2018, before a show cause notice was issued on 6 July 2018. The Court held that the disposal of the gold jewellery without proper notice and before the issuance of a show cause notice was illegal and violated the principles of natural justice.

Issue 2: Violation of petitioners' rights under Article 300A and Article 14 of the Constitution of India

The Court found that the disposal of the petitioners' gold jewellery without notice and proper procedure violated their rights under Article 300A (right to property) and Article 14 (right to equality) of the Constitution of India. The Court emphasized that any action depriving a person of their property must be supported by cogent reasons and follow due process.

Issue 3: Compliance with the provisions of the Customs Act, 1962, particularly Sections 110 and 124

The Court analyzed Sections 110 and 124 of the Customs Act, 1962, which pertain to the seizure and confiscation of goods. It held that mere issuance of a notification under Section 110(1A) does not suffice to dispose of goods without recording reasons and notifying the owner. The Court found that the Customs officials failed to follow the procedure prescribed under the Act, including issuing a show cause notice and providing an opportunity for representation before confiscation.

Issue 4: Entitlement of the petitioners to the return of gold jewellery or compensation equivalent to its market value

The Revisional Authority had allowed the petitioners to re-export the gold jewellery on payment of a redemption fine. However, since the gold jewellery was already disposed of, the Court directed the respondents to restore the equivalent amount of gold (1028 grams) or compensate the petitioners with the market value of the gold as on the date of the judgment. The Court also directed that the amount of redemption fine and penalty be deducted from the compensation.

Order:

1. The action of the Assistant Commissioner of Customs in disposing of the petitioners' gold jewellery was declared illegal and unconstitutional.
2. The respondents were directed to restore the equivalent amount of gold (1028 grams) or compensate the petitioners with the market value of the gold as on the date of the judgment.
3. The above directions were to be complied with within three weeks.
4. The amount of redemption fine and penalty as directed by the Revisional Authority was to be deducted from the compensation.

The petition was disposed of in the above terms with no costs.

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