Delhi High Court Declines Writ Challenge To Gold Confiscation Over Oral Show Cause Notice Acknowledgment

The Division Bench of Justices Anil Khetarpal and Shail Jain made the observation while dismissing a writ petition challenging an order directing absolute confiscation of two gold bars weighing 233 grams and valued at ₹13,07,412.

Petitioner had arrived at Delhi airport from Riyadh, and upon interception by Customs authorities, two gold bars were recovered from his possession.

On the same day, the petitioner tendered a statement under Section 108 of the Customs Act, where he expressed willingness to pay the applicable Customs duty, fine and penalty.

The statement also recorded that the petitioner did not require a show cause notice or personal hearing and that the statement had been given without duress, pressure or threat.

Petitioner subsequently approached the Customs authorities seeking release of the detained gold and requesting a lenient view. The written request again stated that he did not want a written show cause notice or personal hearing. Significantly, it also recorded that an oral show cause notice had been received.

The Customs adjudicating authority thereafter ordered absolute confiscation under Sections 111(d), 111(j), 111(l) and 111(m) of the Customs Act and imposed a penalty of ₹1.30 lakh under Section 112.

Petitioner challenged the order before the High Court, arguing that there had been no valid show cause notice or effective opportunity of personal hearing and that a purported waiver could not dispense with the mandatory requirements of Section 124 of the Customs Act.

He also disputed the validity of the alleged oral show cause notice, contending that there was no material showing that he had specifically requested such notice or that the statutory requirements governing an oral show cause notice had been complied with.

The High Court however declined to examine the merits of these contentions in writ jurisdiction. It noted that Petitioner's case did not disclose a situation where the petitioner was “wholly unaware” of the proceedings.

“On the contrary, the material placed on record shows his participation at more than one stage,” it said.

The Court noted that Petitioner's Section 108 statement “records that the Petitioner did not require a Show Cause Notice or personal hearing and that the statement had been tendered without duress, pressure or threat.”

It added, “the fact remains that the document placed on record bears the Petitioner‟s signatures and contains the aforesaid assertions and did not, contemporaneously or thereafter for a substantial period, communicate to the Customs authorities that the contents thereof were incorrect or that his signatures had been obtained by coercion.”

There is, thereafter, the Court said, a further and independent document addressed to the Customs in which Petitioner “stated that he did not require a written Show Cause Notice or personal hearing. The document further records that an oral Show Cause Notice had been received.”

These circumstances, the Court said, materially distinguishes the present case from Shubhangi Gupta v. Commissioner of Customs , where the Revenue had merely relied on a waiver of show cause notice without asserting that an oral show cause notice had actually been issued.

“The Respondent‟s case is not founded merely upon a purported waiver. The record also contains the Petitioner's own written acknowledgment that an oral Show Cause Notice had been received. Consequently, the question whether the statutory requirements were complied with cannot be answered (in writ jurisdiction)” the Court said and dismissed the petition.

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

For Respondent: Aakarsh Srivastava, Senior Standing Counsel-Customs with Advocates Ashish Bansal, Anand Pandey, Ankit Kumar and Dhananjay Parth