S.110 of Customs Act and S.67 of CGST Act are Pari Materia; No 'Sufficient Cause' for Continued Retention of Goods: Delhi HC [Read Order]
Seized goods are required to be mandatorily returned to the entity from whom they are seized if no notice of extension of notice is supplied within a period of six months from seizure.
![S.110 of Customs Act and S.67 of CGST Act are Pari Materia; No Sufficient Cause for Continued Retention of Goods: Delhi HC [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/03/delhi-hc.jpg "S.110 of Customs Act and S.67 of CGST Act are Pari Materia; No Sufficient Cause for Continued Retention of Goods: Delhi HC [Read Order]")
The Delhi High Court recently ruled that Section 110 of the Customs Act, 1962 and Section 67 of the Central Goods and Services Tax (CGST) Act, 2017 are pari materia, requiring them to be interpreted in a similar manner. Complete Ready to Use PDFs of 200+ Agreements Click here The decision was rendered by the Delhi High Court in response to a petition filed by Kashish Optics Ltd.,...
The Delhi High Court recently ruled that Section 110 of the Customs Act, 1962 and Section 67 of the Central Goods and Services Tax (CGST) Act, 2017 are pari materia, requiring them to be interpreted in a similar manner.
Complete Ready to Use PDFs of 200+ Agreements Click here
The decision was rendered by the Delhi High Court in response to a petition filed by Kashish Optics Ltd., who sought relief against the continued retention of its goods seized under the provisions of the CGST Act without provision of proper notice or specification of “sufficient cause” for retaining the goods beyond the prescribed period.
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Puneet Agrawal, Ketan Jain, Sakshi Bisht, Shruti Garg and Chetan Kumar Shukla, appearing for the Petitioner referenced the decision of the Supreme Court in the case of I.J. Rao, Asstt. Collector of Customs & Ors. v. Bibhuti Bhushan Bagh & Another (1989), where it was directed that “upon the expiry of six months, the person whose goods are seized becomes entitled to their return and the said right cannot be sought to be defeated unilaterally and the affected person would be entitled to a notice of the proposal for extension prior to the expiry of six months”.
Senior Standing Counsel Anushree Narain, along with Ankit Kumar appearing for the Revenue contended that Section 67 of the CGST Act operates differently from Section 110 of the Customs Act therefore vitating the applicability of the Supreme Court decision in I.J. Rao to the present matter.
A Division Bench comprising Justice Yashwant Varma and Justice Harish Vaidyanathan Shankar observed that both, Section 110 of the Customs Act, 1962 and Section 67 of the CGST Act, 2017 are pari materia with each other and provide a similar framework for extending the retention period.
Adverting to the Assessee’s contention that extensive retention of the goods should be done through proper legal procedure, including service of notice and opportunity to be heard, the Bench noted that “sufficient cause” must be shown to the affected person and cannot merely be an internal justification known only to the department.
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Accordingly, the Delhi High Court directed the release of the seized goods upon the petitioner making a deposit as per the valuation while also clarifying that the existence of a provisional release mechanism under Rule 140 of the CGST Rules, 2017 does not negate the requirement under Section 67(7) to show sufficient cause before extending the seizure period.
To Read the full text of the Order CLICK HERE
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