Delhi High Court Rules Indefinite Detention of Goods Without Show Cause Notice Impermissible Under Section 110 of Customs Act

In a recent ruling, the Delhi High Court addressed the permissible duration for the detention of goods by the Customs Department under Section 110 of the Customs Act, 1962. The case involved a petitioner who was intercepted at Delhi airport, leading to the recovery of two yellow bangles weighing 50 grams. The petitioner contended that more than a year had passed without the issuance of a show cause notice (SCN) by the Customs authorities. The Revenue admitted to this lapse, prompting the Court to deliberate on the legality of continued detention without an SCN.

Section 110 of the Customs Act specifies a six-month period within which the Customs Department must issue an SCN following the seizure of goods. This period can be extended by an additional six months under certain formalities, allowing a maximum detention period of one year. The Court emphasized that if no SCN is issued within this timeframe, the continued detention of goods becomes impermissible. In this instance, since the one-year period had elapsed without the issuance of an SCN, the Court deemed the detention unlawful.

The bench, comprising Justices Prathiba M. Singh and Rajneesh Kumar Gupta, underscored the mandatory nature of issuing an SCN and providing the affected party an opportunity to be heard once goods are detained. They ordered the immediate release of the seized bangles and waived any warehouse charges associated with the detention. This decision reinforces the necessity for Customs authorities to adhere strictly to statutory timelines, ensuring that individuals are not subjected to indefinite uncertainty regarding the status of their goods.

This ruling aligns with previous judgments emphasizing timely adjudication in matters involving financial liabilities or penal consequences. For instance, in a 2024 case, the Delhi High Court quashed decade-long delayed SCNs, highlighting that such prolonged inaction violates principles of natural justice and due process. Similarly, in 2016, the Court held that failing to issue an SCN within the stipulated six-month period, or its extension, necessitates the release of detained goods.

In summary, the Delhi High Court's decision serves as a critical reminder to enforcement agencies about the importance of adhering to procedural timelines established by law. It safeguards individuals from undue hardships arising from prolonged and unjustified detention of goods, ensuring that statutory authorities exercise their powers within the bounds of legality and fairness.