Delhi High Court Declines Unconditional Release Of Gold, Cites Dispute Over Oral Show-Cause Notice

The Delhi High Court has refused to direct the unconditional release of 290 grams of gold seized from a passenger at Delhi airport, holding that the absence of a written show-cause notice by itself could not warrant release when the Customs Department specifically claimed that an oral show-cause notice had been issued on the date of seizure.

The Division Bench of Justices Anil Kshetarpal and Shail Jain was dealing with a petition filed by Awesh Karmi Fundreimayum seeking release of eight gold bars detained by Customs authorities for Green Channel violation.

A statement was purportedly recorded from the Petitioner under Section 108 of the Customs Act, 1962 where he waived show-cause notice and personal hearing.

Customs subsequently asserted that an oral show-cause notice had also been issued under the proviso to Section 124.

Petitioner disputed this and argued that no written show-cause notice had been issued within the statutory period prescribed under Section 110(2). He also challenged the voluntariness of his Section 108 statement, alleging that he had been made to sign pre-prepared documents and blank papers.

The Court noted that Section 110(2) requires seized goods to be returned where the requisite notice under Section 124(a) is not given within six months, subject to the statutory extension. Section 124 ordinarily contemplates a written notice, but its first proviso permits the notice and representation to be oral at the request of the person concerned.

Referring to the Supreme Court's judgment in Union of India v. Jatin Ahuja, the Court reiterated that the time prescribed under Section 110(2) is mandatory and that failure to issue the requisite notice within the prescribed period results in the return of the seized goods.

However, the Court distinguished the present case from one where the Department admits that no show-cause notice, whether written or oral, was ever issued.

The Court observed that whether the proceedings conducted on February 27, 2024 constituted a valid oral show-cause notice under Section 124, and whether the petitioner's statement was voluntarily made, were factual questions to be examined in the statutory adjudication proceedings.

It therefore declined unconditional release of the gold and directed the Petitioner to appear before the adjudicating authority.

For Petitioner: Advocates Ashutosh, Fatima, Rohit Swarup, Dalip Singh, Avinash Kumar Singh, Pravej Hasan, Abhijeet Sagar, S.Vijaykanth

For Respondent: Advocate Vishal Chadha, Senior Standing Counsel with Chandan Kumar