ASSTT. COLLECTOR OF CUSTOMS versus CHARAN DAS MALHOTRA

Citation: [1971] 3 S.C.R. 802 · Decided: 19-02-1971 · Supreme Court of India · Bench: J.M. SHELAT · Disposal: Dismissed

Cited by 3 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

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ASSTT. COLLECTOR OF CUSTOMS 
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CHARAN DAS MALHOTRA 
February 19, 1971 
[J. M. SHELAT AND C. A. VAIDIALINGAM, JJ.J 
Customs Act (52 of 1962), s. 110 (I) and (2) and proviso-Power of 
extension of period,"· quasi judici<l-'Su/ficient cause being shown'-Scope 
oJ. 
Under s. 110(1) of the Customs Act. 1962. if a proper officer has 
'reason to believe' that any goods are liable to confiscation under the Act, 
he may seize such goods. Section 124 provides that no order confiscating 
any goods shall be made unless the owner of the goods is given notice in 
writing informing him of the grounds on which it is proposed to confiscate 
the goods. Under s. 110(2) where any goods are seized under sub-s. (1) 
and no notice in respect thereof is given under s. 124 within six months 
of the seizure, the goods shall be returned to the person from whose pos-
session they were seized; provided, the period . of six months ·may 'on 
•ufficient cause beipg shown' be extended by the Collector of Customs for 
a period not exceeding six months. 
On March 19, 1963 goods were seized from the respondent and, on 
September 19, 1963 an extension for a period of four months was applied 
!or by the customs authorities and was granted by the Collector on the 
ground that certain inquiries yet remained to be made ·by them. 
On 
February 20, 1964, that is, one month after the extended period had 
expired, the Collector passed an order granting further extension for two 
months. Both the extension orders were passed without giving any oppor-
. 1unity to the respondent. The respondent challenged the second extension 
and the High Court held that the orders of extension we're bad as the 
Collector had to ·decide the application for extension judicially. In appeal 
:to this Court. 
HELD : The power of extension under the proviso was quasi-judicial, 
·Or at any rate, one requiring a judicial .approach, and therefore, an oppor-
1unity of being heard ought to have been given to the respondent before 
ordering extension. [811 B-C] 
(a) The policy of the Legislature is, that in view of the extraordinary 
power of seizure the inquiry should ordinarily be completed within six 
months but in exceptional cases, the legislature entrusted to a superior 
officer ihe power of extension on sufficient' cause being shown. The Col-
lector is not expected to pass extension orders mechanically or as a matter 
of routine but only on being satisfied that there exist facts which. in~icatc 
that investigation could not be. completed for bona fide reason~ within the 
time of 6 months laid down 1n s. 110(2). [808 C-E; F-GJ 
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(b) Whereas s. 110(1) uses the expression re!'son to believe for enabling 
a custom~ officer to seize t~e goods, the provt"? to .sub-s. (2) uses the 
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expression sufficient er.use being sho'!'n. Sub-Section (I). does not c;ontem-
plate an inquiry at the stage of seizure, the ?nly reqmrement bemg the 
satisfaction of the concern~ officer that th~e are relevant i;easons. to 
hclieve that the goods are hable to confiscahon by reason of illegal 1m-
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ASST. COLLECTOR CUSTOMS V, C, D. MALHOTRA (She/at,/.) 803 
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portation. The words sufficient cause being shown mean that the Collector 
must determine on materials placed before him that they warrant exten-
sion of time. 
Furthel', the civil right to have the seized goods restored 
which accrues on the expiry of the initial six months is defeated on exten-
sion being granted. 
Therefore, when the statute requires the determina-
tion of a sufficient cause on facts produced before the Collector it should 
be held to be a quasi judicial function or at least a function requiring 
judicial approach; and there is no distinction between extension orders 
passed before and those passed after the expiry of the initial or the extended 
period. [808 H; 809 A, C-D; 811 C-D) 
( c) When an order is n1ade in bona fide exercise of power and within 
the provisions" of the Act which confer such power, the order- is immune 
from interference by a court of law and therefore, the adequacy orthe 
cause shown may not be a ground for interference, but the Collector has 
to hold an inquiry on facts, that is, on material placed before him,· and 
consider the pros and cons of the question. [809 D-E; 811 El 
( d) By holding such inquiry there is no danger of disclosure of facts 
which would be detrimental to the investigation. 
The only disclosure 
would be about the fact that investiga

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