TaxTMI 
TaxTMI 
2020 (8) TMI 350
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....gold bars in 13 pieces having value of Rs. 1,72,94,632/- was made from the premises of petitioner No.2, alleged to have smuggled gold. 3. Customs Authorities are required to summon the person to give evidence and produce documents. Indulgence of this Court has been sought for quashing of Exhibit P-11 dated 16.10.2019 regarding the seizure of gold aforementioned as well as the illegality committed by Customs Authorities in granting ex parte extension dated 26.05.2019 (Exhibit P-19), communication thereof received by petitioner No.2 on 27.05.2020 i.e. beyond 40 days after expiry of six months of seizure at the back of petitioner No.2. 4. Petitioner No.1 had been running his proprietary concern under the name and style of M/s Mahima Jewellery Works for the last 18 years whereas 2nd petitioner is a gold ornament manufacturer and business man. He is partner of 'Sreekaleeshwari Gold' at Trichur a gold smith by profession running a jewellery manufacturing unit under the name and style of M/s Sri Kalleswari Gold having a GST and PAN number. Both the petitioners are close friends and used to entrust raw gold for manufacturing of gold ornaments. After the seizure of the gold aforementi....
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....expiry of six months of seizure. In view of the mandate of law, extension is mandatorily required to be given before expiry of six months and after hearing the parties from whom the goods were seized. (iii) Whenever goods are seized under Section 110(2) of the 1962 Act, if no notice in respect thereof is given under clause (a) of Section 124 within six months of the seizure of goods then the goods are mandatorily returned to the person from whose possession they were seized of. Period of six months in the instant case expired on 15.04.2020, however, no notice within said period i.e. from 16.10.2019 till 15.04.2020 under Section 124(a) of the 1962 Act has been issued. (iv) The aforementioned Act was amended under Act No.13 of 2018 wherein proviso to Section 110(2) was substituted empowering the Principal Commissioner or Commissioner of Customs, for the reasons to be recorded in writing, may extend such period to a further period not exceeding six months but the exercise has to be done before expiry of the period. 7. In support of aforementioned contentions, reliance has been placed on judgment of the Hon'ble Supreme Court rendered in I.J. Rao, Asst. Collector of....
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.... The amendment was caused by Finance Act of 2018. He pointed out the difference regarding the provisions prior to the amendment and subsequent thereof. In the prior amendment provisions, period of six months could have been extended on sufficient cause shown by the Principal Commissioner or Commissioner of Customs. The aforesaid provisions were interpreted, as per the judgments cited, to mean that while granting such extension, the affected party is required to be given an opportunity of hearing, whereas, post amendment, it is only the reasons to be recorded in writing. Principal Commissioner or Commissioner of Customs is empowered to extend such period for a period of exceeding six months and inform the person from whom such goods were seized before 'expiry of the period so specified'. The reason assigned for extension as per Exhibit R1(a) is primarily on account of COVID-19 Pandemic as persons from whose custody the gold was recovered were facing difficulties to appear and make statements. (iii) As regards the applicability of ratio decidendi rendered in Rama Overseas's case, he submitted that though the provisions of Section 110 subsequent to amendment have been referre....
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....iod not exceeding six months and inform the person from whom such goods were seized before the expiry of the period so specified: 6. Provided further that where any order for provisional release of the seized goods has been passed under Section 110A, the specified period of six months shall not apply." (ii) Para 13 of judgment rendered in I.J. Rao's case (supra), emphatically relied upon during the course of arguments, pertains to unamended provisions of Section 110(2) of the 1962 Act where on consideration of the expression "on sufficient cause being shown", it was held that decision to be rendered by the Customs Authority is after considering material placed on record to justify the request for extension. The Collector must be satisfied that investigation was being pursued seriously and there was necessity for granting more time. The question involved whether the person claiming restoration of goods is entitled to a notice before any such extension. Noticing aforementioned provisions, it was held that person from whom possession goods were seized may want to establish the need for immediate possession having regard to the nature of goods and the critical cond....
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....cutive officer generally looks at things from the standpoint of policy and expediency. 36. Reasons, when recorded by an administrative authority in an order passed by it while exercising quasijudicial functions, would no doubt facilitate the exercise of its jurisdiction by the appellate or supervisory authority. But the other considerations, referred to above, which have also weighed with this Court in holding that an administrative authority must record reasons for its decision, are of no less significance. These considerations show that the recording of reasons by an administrative authority services a salutary purpose, namely, it excludes chances of arbitrariness and ensures a degree of fairness in the process of decision-making. The said purpose would apply equally to all decisions and its application cannot be confined to decisions which are subject to appeal, revision or judicial review. In our opinion, therefore, the requirement that reasons be recorded should govern the decisions of an administrative authority exercising quasi-judicial functions irrespective of the fact whether the decision is subject to appeal, revision or judicial review. It may, however....