Bombay High Court Orders Return of Seized Goods Under Section 110(2) of Customs Act, 1962 Due to Failure to Issue Show Cause Notice Within One Year. The court held that seizure becomes illegal if no notice under Section 124(a) is issued within one year, and extension orders passed after expiry of one year are invalid.

Writ petition under Article 226 of the Constitution of India challenging seizure of imported goods and seeking return of the same.

Petitioner sought quashing of seizure memo dated 8 August 2022 and extension orders dated 7 February 2023 and 11 May 2023, and direction to respondents to release the consignment.

Petitioner's consignment of 3D printing machine and accessories was seized on 8 August 2022, and no show cause notice under Section 124(a) of Customs Act was issued within one year, making the seizure illegal under Section 110(2).

Whether the seizure of goods under Section 110 of the Customs Act, 1962 becomes illegal if no show cause notice under Section 124(a) is issued within one year from the date of seizure? Whether the extension orders passed after the expiry of one year are valid under the proviso to Section 110(2)? Whether the petitioner is entitled to return of the seized goods?

Petitioner argued that under Section 110(2) of the Customs Act, if no show cause notice under Section 124(a) is given within one year of seizure, the goods must be returned. The extension orders were passed after the expiry of one year and are invalid. The seizure has become illegal. Respondents argued that the extension orders were validly passed within the one-year period and that the seizure was not illegal. They contended that the show cause notice would be issued in due course.

Under Section 110(2) of the Customs Act, 1962, if no show cause notice under Section 124(a) is issued within one year from the date of seizure, the seizure becomes illegal and the goods must be returned to the person from whose possession they were seized. The proviso to Section 110(2) allows the Commissioner to extend the period, but such extension must be granted before the expiry of the one-year period. Extension orders passed after the expiry of one year are invalid. In this case, the seizure was on 8 August 2022, and no show cause notice was issued within one year; the extension orders were not sufficient to cure the illegality. Hence, the goods must be returned.

The petitioner invoking the provisions of sub-section (2) of Section 110 read with its proviso, has approached this Court praying that by operation of law the seizure itself has become illegal and consequently the goods are liable to be returned to the petitioner. Under sub-section (2) of Section 110 of the Act, if no notice under clause (a) of Section 124 is given within one year of the seizure, the goods shall be returned to the person from whose possession they were seized. The proviso to sub-section (2) of Section 110 empowers the Commissioner to extend the period of one year for reasons to be recorded in writing. However, such extension must be granted before the expiry of the one-year period. In the present case, the seizure was on 8 August 2022. The one-year period expired on 7 August 2023. The first extension order was passed on 7 February 2023, which is within the one-year period. However, no show cause notice was issued even after the second extension. The respondents have failed to demonstrate that any notice was issued within the extended period. Consequently, the seizure has become illegal and the goods are liable to be returned to the petitioner.

The petitioner imported goods under Bill of Entry dated 16 July 2022. On 8 August 2022, the goods were seized by respondent No.2. The petitioner filed a writ petition on an unspecified date. The court heard the matter on 3 October 2023 and delivered judgment on the same day.

• Customs Act, 1962: 110, 110(2), 124(a)
• Constitution of India: 226