A two-judge bench of the Gujarat High Court has released the confiscated cash and goods as the Goods and Service Tax (GST) Department delayed issuance of Show Cause Notice (SCN) beyond the statutory time period.
The petitioner is a sole proprietor of JBM Textiles, Surat, and is engaged in the business of textile trading and export. The Directorate of Revenue Intelligence (DRI) on receipt of intelligence, searched the office premise of the petitioner where the cash belonging to the petitioner and his family members and two mobile phones also were seized by the officers. A show-cause notice came to be issued after the lapse of 19 months in respect of the alleged illegal export by Amira Impex in connivance with a number of other persons which included the petitioner, as alleged by the respondents/ department.
According to the petitioner, the notice was issued after 19 months of seizure and therefore, is time-barred.
The department, on the other hand, denied that there has been any violation of the provision of law. According to the respondents, since it is a case of a large-scale illegal availment of the export benefits, no indulgence is necessary. The issue raised was whether the show cause notice given under Section 124 of the Act after six months of seizure can be sustained under the law.
Section 124 of the Act provides that no order of confiscation of any goods or imposing of penalty on any person is to be made under Chapter XIV unless the notice has been served upon the person who is the owner of the goods, in writing with prior approval of the officer of customs, not below the rank of an Assistant Commissioner of Customs informing the grounds on which it is to be confiscated or for the imposition of penalty.
The division bench of Justice Sonia Gokani and Justice Hemant M. Prachchhak has observed, “it is quite unfathomable as to why the time limit is not adhered to and issuance of the show cause notice has been delayed beyond the statutory time period and hence, the intervention will be necessary at the end of this Court by keeping open the rights of the respondents to initiate adjudication process afresh in accordance with law.”
The Court further noted that the period prescribed under the law has already lapsed long before the show cause notice has been issued, this Court needs to intervene for this being a clear violation of statutory provisions of section 110 and other provisions of Customs Act, the items are required to be returned to the petitioner. The court directed the department to return the cash and articles/goods to the petitioner no later than the period of eight weeks seized from the petitioner.
AMIT HARISHKUMAR DOCTOR vs UNION OF INDIA & 3 other(s)
CITATION: 2022 TAXSCAN (HC) 138
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