I.J. ASSISTANT COLLECTOR OF CUSTOMS & ORS. versus BIBHUTI BHUSHAN BAGH & ANR.

Citation: [1989] 3 S.C.R. 282 · Decided: 12-05-1989 · Supreme Court of India · Bench: R.S. PATHAK · Disposal: Appeal(s) allowed

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Judgment (excerpt)

A 
I.J. RAO, ASSISTANT COLLECTOR OF CUSTOMS & ORS. 
·y 
v. 
BIBHUTI BHUSHAN BAGH & ANR. 
MAY 12, 1989 
B 
[R.S. PATHAK, CJ, E.S. VENKATARAMIAH, 
y· 
RANGANATH MISRA, M.H. KANIA AND 
M.N. VENKATACHALIAH, JJ.] 
Customs Act, 1962-Sections 110(2), lll(d), Jll(o) & 124A-
·~; 
Issuance of a notice for extension of time beyond six months under 
c Proviso to Sec. ) 10(2) to a person from whose possession goods have 
been seized-Held to be necessary but subject to the need for maintain-
ing confidentiality of investigation . . 
'1 
Acting on the basis of the information contained in an advertise-
D 
ment in a newspapers offering the sale of imported manual and electric 
typewriters, adding and calculating mac.Moes, the customs authorities ' 
raided the premises of M/s Typerwriters and Stationary Operation Pri-
vate Ltd., Calcutta on 5th May, 1966 and recovered fifteen typewriter.s, 
adding & calculating machines. On inquiry it was learnt that the saill 
machines had been sold to the Company by R.N. Bagh, who in turn 
E 
disclosed that the machines in question had been purchased from crew 
members of the vessels. On 7 .5.66 the customs authorities searched the 
business premises of the Company and found-several machines from the 
documents seized during the search it came to light that there was a 
conspiracy between the Respondents and some of the crew members of 
certain vessels whereunder it bad been agreed that the Respondents 
F 
would look after the families of the crew members in India and the crew 
personnel would draw their wages abroad in foreign currency and after 
1: 
purchasing the said machines, would supply to the Respondents after 
clearance under the concessions provided under the Baggage Rules. 
The goods in question were seized on 5/7th May, 1966 and as 
G required by Rule 124(a) of the Customs Act, notices as to why the goods 
should not be confiscated were due to issue within six months thereof. 
., 
Section 110(2) of the Customs Act provided that if a notice as contemp-
lated by Section 124(a) is not issued within a period of six months as 
'r' 
provided thereunder, the goods shall have to be returned to the person 
from whose possession. they were seized. However a proviso to Sec. 
H 
110(2) makes a provision that the period of six months can be extended, 
282 
. ) .. 
I.J. RAO v. B.B. BAGH 
283 
on sufficient cause being shown, by the Collector for a period not 
A 
exceeding six months. 
The officers of the Customs Department showed cause to the 
Additional Collector of Customs, Calcutta for extension of time to serve 
a show cause notice on Respondents and extension of six months was 
granted for the purpose under the proviso to Section I 10(2) of the 
Customs Act. No notice of the proceedings relating to the said extension 
was given to the persons from whose custody the goods were seized. 
On 6th December 1966, the Assistant Collector of Customs issued 
a notice to each of the Respondents calling upon them to show cause 
why the goods should not be confiscated. 
On April 18, 1967. the Respondents filed a Writ Petition in the 
High Court at Calcutta challenging the proceedings initated against 
them by Customs Authorities. The learned Single Judge of the High 
Court who heard the Writ Petition held that the Order of extension to 
B 
c 
be made under Section 110(2) of the Customs Act is not an administra-
D 
tive order but a quasi judicial order and as the order has been passed 
ex-parte without notice to the owner of the goods, it was in h.reach of 
principle of Natural Justice. The order of extension was accordingly 
quashed and it was held that the owner was entitled to the retnrn of his 
goods. 
E 
The appellants appealed to the Appellate Bench. The appellate 
Bench allowed the appeal in part, quashed the order of extension dated 
3rd November, 1966 directed the appellants to restore the machines and 
documents seized from the Respondents. However the Customs Autho-
rities were permitted to initiate and complete such other proceedings 
against the Respondents as were open to them in law. The appellate 
F 
Bench was of the opinion that the decision in Assistant Collector of 
Customs v. Charan Das, [1971] 3 SCR 802 lays down the correct law 
and notice of extension should have been given to the owner of the goods 
before the Order of extension had been passed. 
Hence this appeal by the Customs Deparment. 
G 
· '1 
At the hearing of the appeal Respondents placed reliance upon 
Charan Das Malhotra, (su

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