TaxTMI 
TaxTMI 
2025 (3) TMI 479
X X X X Extracts X X X X
X X X X Extracts X X X X
....re order dated 23.10.2020 (Annexure P-5) to the Petitioner; and/or ii. Issue an appropriate writ or order or direction to the Respondents to release all the documents and electronic devices resumed as per Annexure-A to the panchnama dated 22/23.10.2020 (Annexure P-3) from the registered premises of the Petitioner; and/or iii. Issue an appropriate writ or order or direction, to quash and set aside the impugned seizure order dated 23.10.2020 (Annexure P-5); and/or iv. Issue any other writ, order or direction in favour of the Petitioner, as this Hon'ble Court may deem fit and proper in the present facts and circumstances of the case, so as to ensure the ends of justice, or else the Petitioner shall suffer irreparably; and/or v. to grant costs of this Petition; 3. By a detailed order dated 07.01.2025, we had set out therein, the essence of the challenge raised in the present petition and the same reads as follows: - "1. The writ petitioner assails the continued seizure of articles pursuant to a panchnama which had come to be drawn on 22/23 October 2020 in connection with search proceedings initiated under the Central Goods and Services Ta....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (7) by a further period of six months upto 21 October 2021. It is during this period that the notice of confiscation referable to Section 130 came to be issued on 20 October 2021. 6. Learned counsel for the writ petitioner has drawn our attention to the pari materia provisions which stand comprised in Sections 110 and 124 of the Customs Act, 1962 and to two significant decisions which were handed down by the Supreme Court in connection therewith in Assistant Collector of Customs v. Charan Das Malhotra, which was followed by I.J. Rao, Asst. Collector of Customs and Others. vs. Bibhuti Bhushan Bagh and Another. 7. In I.J. Rao, one of the issues which came to be flagged by the Supreme Court was whether the person from whom the goods had been seized would be entitled to be heard before the original period as contemplated in the statute for seizure and retention of articles could be extended. Dealing with this aspect, the Supreme Court in I.J Rao, while placing reliance on its decision in Charan Das Malhotra, held: - "9. It is apparent that goods liable to confiscation may be seized by virtue of Section 110 (1) but that those goods cannot be confiscated or pe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n 110 (2), and that therefore extension of the period has become necessary. The Collector, the court emphasized cannot extend the time unless he is satisfied on facts placed before him that there is sufficient cause necessitating extension, in which case the burden of proof would clearly lie on the customs authorities applying for extension to show that such extension was necessary. Taking these considerations into record the court held that the words "sufficient cause being shown" required an objective examination of the matter by the Collector. It was pointed out that ordinarily on the expiry of the period of six months from the date of seizure the owner of the goods would be entitled as of right to restoration of the seized goods, and that right could not be defeated without notice to him that an extension was proposed. The court rejected the contention that the continuing investigation would be jeopardised if such notice was given. The court held that the power under the proviso to Section 110 (2) was quasi-judicial, at any rate one requiring a judicial approach, and consequently the person from whom the goods were seized was entitled to notice before the period of six months e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....xpiry of that period. If the notice is not issued in the confiscation proceedings within six months from the date of seizure the person from whose possession the goods have been seized becomes immediately entitled to the return of the goods. It is that right to the immediate restoration of the goods upon the expiry of six months from the date of seizure that is defeated by the extension of time under the proviso to Section 110 (2). When we speak of the right of the person being prejudiced or placed in jeopardy we necessarily envisage some damage or injury or hardship to that right and it becomes necessary to inquire into the nature of such damage or injury or hardship for any case to be set up by such person must indicate the damage or injury or hardship apprehended by such person. In the present case, one possibility is that the person from whose possession the goods have been seized may want to establish the need for immediate possession, having regard to the nature of the goods and the critical conditions then prevailing in the market or that the goods are such as are required urgently to meet an emergency in relation to a vocational or private need, and that any delay in restor....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ds are seized. xxxx xxxx xxxx 16. In our opinion, the person from whose possession the goods have been seized is entitled to notice of the proposal before the Collector of Customs for the extension of the original period of six months mentioned in Section 110 (2) of the Customs Act, and he is entitled to be heard upon such proposal but subject to the restrictions referred to earlier in regard to the need for maintaining confidentiality of the investigation proceedings." 8. It was thus contended that the absence of any notice or opportunity having been provided to the writ petitioner prior to the extension being approved on 16 April 2021, would itself constitute sufficient ground to invalidate the seizure of articles. 9. It was further contended that even the note sheet which is relied upon by the respondents does not refer to any germane material which may have been considered sufficient warranting extension of the period of seizure by a further period of six months. It was also the submission of learned counsel that in fact the seizure notice itself has come to be served after the maximum period of 12 months as is contemplated under Section 67 (....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as pasted on the front side of the locked premises and panchnama dated 20.10.2021 was drawn. ANALYSIS: 7. Section 67 of the CGST Act 2017, as relevant for the present purposes, reads as follows: - "67. Power of inspection, search and seizure: (1) Where the proper officer, not below the rank of Joint Commissioner, has reasons to believe that-- (a) a taxable person has suppressed any transaction relating to supply of goods or services or both or the stock of goods in hand, or has claimed input tax credit in excess of his entitlement under this Act or has indulged in contravention of any of the provisions of this Act or the rules made thereunder to evade tax under this Act; or (b) any person engaged in the business of transporting goods or an owner or operator of a warehouse or a godown or any other place is keeping goods which have escaped payment of tax or has kept his accounts or goods in such a manner as is likely to cause evasion of tax payable under this Act, he may authorise in writing any other officer of central tax to inspect any places of business of the taxable person or the persons engaged in the business of transporting goo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fficient cause being shown, be extended by the Collector of Customs for a period not exceeding six months." 9. A perusal of the two provisions makes it evident that the two are similarly worded. 10. We are of the belief that the two provisions are Pari Materia and the contention of the Respondents that the same cannot be pari materia is clearly incorrect. 11. We advert to the first justification sought to be given by Ms. Narain in support of the impugned SCN, namely, that the judgment of the Hon'ble Supreme Court in the matter of I.J. Rao, Asstt. Collector of Customs & Ors. v. Bibhuti Bhushan Bagh & Another [I.J. Rao, Asstt. Collector of Customs & Ors. v. Bibhuti Bhushan Bagh & Another, (1989) 3 SCC 202] would not apply in the present case as the same is under the Customs Act, 1962 whereas, the present matter deals with the CGST Act, 2017. She would also contend that the scheme of Section 67 of the CGST Act is materially different from the scheme of Section 110 of the Customs Act as it stood then, and the application of the said judgment, in the present facts and circumstances, would constitute the reading of the said provisions of the Customs Act into the CGST Act. She wo....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... provides for release on a provisional basis of seized goods does not obliterate the proviso to Section 67 (7) of the CGST Act, including the need for showing "sufficient cause" for extending the period of retaining the seized goods. 19. The argument of the Respondents that the Petitioners have not shown how the retention of the goods would be prejudicial or that they would be diminishing in value, is also incorrect as the Petitioner has clearly stated on various occasions that the said frames of spectacles would go out of fashion and resultantly, they would suffer huge losses. On that count too, Ms. Narain's attempt to distinguish the judgment of I.J. Rao from the facts and circumstances of the present case, would fail. NOTE-SHEET PROVIDES "SUFFICIENT CAUSE" FOR CONTINUED SEIZURE: 20. In the facts of the present case, no notice of extension of the seizure was provided prior to the conclusion of the six-month period. Reliance was instead placed on certain extracts which came to be filed as a consequence of our Order dated 22.08.2023 to contend that the same would constitute compliance of the mandate of "sufficient cause". 21. These extracts are not in the public domain ....