SCN u/s 124 of Customs Act Mandatory even if Notice allegedly Waived: Madras HC Quashes Customs Confiscation Order [Read Order]

The Madras High Court has held that the issuance of a show cause notice under Section 124 of the Customs Act is a mandatory precondition for the confiscation order even if the department holds that the waiver of the notice has been sought by the assessee.

In the case of Hiseins Exim the petitioner challenged the confiscation order passed by the customs authorities without issuing a formal show cause notice under Section 124 of the Customs Act, 1962. The department held that the petitioner had waived the notice and therefore the confiscation proceedings were validly concluded.

The petitioner submitted that Section 124 is a statutory safeguard and that no order of confiscation or penalty can be passed unless the person concerned is given a notice in writing informing the grounds on which it is proposed to confiscate the goods and impose penalty.

The High Court after analyzing the statute noted that Section 124 provides a substantive procedural guarantee and is a part of the principles of natural justice.

The Court comprising Justice Abdul Quddhose held that even if there was a purported waiver, the authorities were bound to strictly adhere to the statutory provision before depriving a person of their property by confiscation.

Since no proper show cause notice was issued the Bench struck down the confiscation order as being unsustainable in law. The case was referred back to the authorities to start fresh in accordance with the law after issuing a proper notice and giving a reasonable opportunity of hearing to the petitioner.

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