Kerala HC Upholds validity of SCN Served on Adult Member of Noticee u/s 153 of Customs Act [Read Order]

Manu Valiyaveettil Madhu, the petitioner, challenged the order in original, passed by the 1st respondent, ordering confiscation of 1097.57 grams gold and imposing a penalty of Rs.6,00,000/- upon the petitioner. While the petitioner was coming from abroad on 06.06.2023, the officers of the Air Intelligence Unit intercepted the petitioner and thereupon, from the hand baggage of the petitioner, 1184.30 grams of capsules allegedly containing gold in paste form, were recovered. The quantity of the gold therein was ultimately determined as 1097.57 grams and therefore, the proceedings under Section 123 of the Customs Act, 1962 were commenced by issuing show cause notice.

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According to the petitioner, at the time when the show cause notice was issued, he was abroad and therefore, he could not submit a proper reply to the said show cause notice. It was also averred in the writ petition that, the elderly parents of the petitioner, who were served with the notice, lacked the requisite literacy or understanding, with regard to the contents of notice, and thus the petitioner was deprived of an opportunity to provide a timely reply to show cause notice.

Later, on coming to know about show cause notice, the petitioner appeared for personal hearing before the 1st respondent through virtual mode on 11.01.2024 and thereafter, an order was passed without providing the petitioner a proper opportunity to contest the matter. As mentioned above, as per the order the gold was confiscated and a penalty of Rs.6,00,000/- was also imposed upon the petitioner. This writ petition is submitted in such circumstances, challenging an order and also seeking a direction to the respondents to afford the petitioner a fair opportunity to submit reply to the show cause notice and present his case before the competent authority.

A statement has been submitted by the Standing Counsel on behalf of the respondents. In the statement, the contention that the petitioner was denied a proper opportunity to contest the matter, was denied. It was averred that, as per Section 153(1)(a) of the Customs Act, a show cause notice can be served to the addressee by giving it or tendering it directly to any adult member of his family residing with him.

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The notice was served upon the elder member of the family and therefore, there was proper notice. Along with the statement, Annexure R(1)(c) was also produced, which was a communication, sent in the name of the petitioner, requesting an opportunity to appear for personal hearing through online mode.

The respondent was of the view that the same was considered and opportunity to the petitioner to appear through online mode was granted. Accordingly, a hearing was already conduced before completing the proceedings as per order, in which the petitioner appeared through online mode and the proceedings were completed. The said order is appealable under Section 128 of the Customs Act, 1962 and the petitioner did not avail the said statutory remedy as well.

A single bench of Justice Ziyad Rahman A.A. held that “the service of notice on the adult member in the family of the noticee is concerned, the same could be treated as proper service as contemplated under Section 153 of the Customs Act, 1962. Therefore, in view of the fact that there is an admission that the notice was served upon the petitioner, through the elder member of the family of the petitioner, the contention of the petitioner cannot be accepted.”

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The bench viewed that the contentions that the petitioner was denied a proper opportunity to contest the matter cannot be accepted as the notice was served upon the petitioner through the elderly member of the family is admitted and later, an opportunity to appear through virtual mode was availed by the petitioner. By utilizing the said opportunity, the petitioner appeared before the adjudicating officer concerned and offered his explanation without raising any contention with regard to the non-receipt of the show cause notice or denial of opportunity to submit an explanation to the notice.

Even though the order was passed on 30.01.2024, the petitioner did not invoke the statutory remedies and instead he filed the writ petition only on 29.11.2024, i.e., after ten months of the said notice. It was evident that the petitioner did not avail the statutory remedy which was available to him and the court dismissed the writ petition.

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