The Supreme Court upheld a Delhi High Court order directing release of 233 grams of gold seized by customs in May 2023, ruling that failure to issue a show cause notice (SCN) within a reasonable time violated statutory procedure.
Supreme Court Upholds Delhi HC Order Releasing Seized Gold
The Supreme Court has affirmed the Delhi High Court's decision to direct the release of 233 grams of gold that had been seized by customs authorities in May 2023. The authorities failed to issue a show cause notice (SCN) or pass any adjudication order within two years of seizure, prompting judicial intervention.
Under Section 110 of the Customs Act, 1962, goods may be seized if imported or attempted to be smuggled contrary to the provisions of the Act. However, the law mandates that proceedings must be initiated promptly. The prolonged inaction—over two years—without initiating formal proceedings was held to be contrary to the principles of natural justice and statutory due process. The Supreme Court observed that
'Prolonged detention of seized goods without initiating adjudication proceedings renders the seizure unlawful.'
This ruling reinforces the obligation of customs authorities to act within a reasonable timeframe after seizure. Practitioners should note that continued detention without SCN may lead to court-directed release under Article 300A (right to property) and Article 21 of the Constitution. The decision serves as a guidepost for administrative efficiency and accountability in enforcement actions.
Citations
- Customs Act, 1962, Section 110
