2025 (3) TMI 751 - HC - Customs

Detention of gold quashed after six-month delay, lack of hearing and service; ornaments released, warehouse charges waived

Amirhossein Alizadeh Versus The Commissioner Of Customs & Ors.

HC held the six-month period for issuance of a show-cause notice had elapsed, no personal hearing was granted, and the order-in-original was not served ... Seeking unconditional release of the gold ornaments of the Petitioner detained - issuance of SCN within a prescribed period, usually six months - HELD THAT:- The prescribed period of six months for issuance of a Show Cause Notice has already elapsed. No personal hearing was also granted to the Petitioner and as directed in the above order in the previous writ petition, no order-in-original has been served upon the Petitioner till date. After the passing of an order by the Division Bench in the earlier writ petition, the Customs department had an obligation to ensure that the order-in-original is served or intimated to the Petitioner. There has been no compliance of the direction passed by this Court. Under such circumstances, the Petitioner cannot be forced to repeatedly approach the Court to even obtain a copy of the order - Accordingly, it is a fit case for directing the release of goods. The detention is, accordingly, quashed. The goods shall be released to the Petitioner. Warehouse charges shall be waived. Petition disposed off. ISSUES PRESENTED and CONSIDEREDThe primary issues considered in this judgment are: Whether the Customs Authorities were justified in detaining the gold ornaments of the Petitioner without issuing a Show Cause Notice or serving an Order-in-Original. Whether the Petitioner is entitled to the unconditional release of the detained goods or compensation if the goods have been disposed of. Whether the Customs Authorities complied with the directions of the previous court order to serve the Order-in-Original to the Petitioner.ISSUE-WISE DETAILED ANALYSISDetention of Goods Without Show Cause Notice or Order-in-OriginalThe legal framework governing this issue involves the provisions under the Customs Act, which mandate the issuance of a Show Cause Notice within a prescribed period, usually six months, in cases of detention of goods. The Court noted that the Customs Authorities failed to issue a Show Cause Notice or serve the Order-in-Original to the Petitioner, which is a procedural lapse.The Court interpreted the absence of a Show Cause Notice and the lack of service of the Order-in-Original as a violation of the Petitioner's rights. The Court emphasized that procedural fairness requires that an individual be informed of the reasons for the detention of their goods and be given an opportunity to respond.The evidence presented showed that the Petitioner was not served with any Order-in-Original, and no personal hearing was granted. This lack of compliance with procedural requirements led the Court to conclude that the detention was unjustified.Entitlement to Release or CompensationThe Court applied the law to the facts by determining that since the Customs Authorities did not follow the due process, the Petitioner is entitled to the release of the detained goods. The Court also considered the possibility that the goods might have been disposed of and, therefore, directed that if the goods are no longer available, the market value of the goods as of the current date should be paid to the Petitioner.Competing arguments from the Customs Authorities regarding the procedural delays were not found sufficient to justify the continued detention of the goods. The Court concluded that the Petitioner should not be penalized for the administrative lapses of the Customs Authorities.Compliance with Previous Court OrderThe Court noted that the Customs Authorities failed to comply with the previous court order directing them to serve the Order-in-Original to the Petitioner. This non-compliance further supported the Court's decision to order the release of the goods.The Court reasoned that repeated non-compliance with court orders undermines the rule of law and the administration of justice. The Court emphasized that the Petitioner should not be forced to repeatedly approach the Court to obtain a copy of the order.SIGNIFICANT HOLDINGSThe Court held that the detention of the Petitioner's goods without issuing a Show Cause Notice or serving an Order-in-Original was unjustified. The Court ordered the release of the goods to the Petitioner and waived any warehouse charges. The Court also provided for compensation in the form of the market value of the goods if they have been disposed of, with the stipulation that interest would be payable if the compensation is not paid within four weeks.Key principles established include the requirement for procedural fairness in the detention of goods and the obligation of authorities to comply with court orders. The Court's final determination was to quash the detention and order the release of the goods or compensation to the Petitioner.