Customs Act - Unconditional Release of Seized Goods Due to Lapsed Notice Period Held Valid

The Supreme Court mandates the return of seized luxury vehicles, reinforcing strict adherence to procedural timelines under the Customs Act, 1962.

News Report:

In a significant judgment delivered on September 11, 2025, the Supreme Court of India, comprising Justices J.B. Pardiwala and Sandeep Mehta, affirmed the decision of the Delhi High Court in the case of Union of India v. Jatin Ahuja. The apex court upheld that the failure to issue a show-cause notice within the prescribed period under the Customs Act, 1962 necessitates the unconditional release of seized goods.

The case revolves around the Directorate of Revenue Intelligence's (DRI) seizure of a luxury Maserati car from Jatin Ahuja, a trader in luxury cars, on May 9, 2012. The car was detained under Section 110 of the Customs Act, and despite an extension granted by the Commissioner of Customs, no show-cause notice was issued within the further extended period of one year.

The Delhi High Court had earlier ruled that the non-issuance of a show-cause notice within the stipulated timeframe under Section 110(2) of the Customs Act mandates the return of seized goods to the person from whom they were seized. This decision was challenged by the Union of India, arguing that the provisional release of goods under Section 110A negates the mandatory release prescribed under Section 110(2).

The Supreme Court, however, dismissed the appeals filed by the Revenue, emphasizing that Section 110A, which allows provisional release, does not override the consequences outlined in Section 110(2). The court reiterated that the statutory requirement for timely issuance of a show-cause notice is mandatory, and any lapse in adhering to this timeline results in the dissolution of the seizure.

The judgment highlights the distinction between Sections 110(2) and 124 of the Customs Act, clarifying that while Section 110(2) governs the time limit for holding seized goods, Section 124 pertains to the issuance of a show-cause notice for confiscation. Both provisions operate independently, and the Supreme Court stressed that procedural efficiency must be maintained to prevent indefinite retention of goods without adjudication.

The Supreme Court's decision not only reinforces the importance of adhering to procedural timelines but also addresses the concerns of entities dealing with perishable goods or fast-moving consumer goods, which could lose value if held indefinitely.

Legal experts have hailed the ruling as a reaffirmation of procedural fairness and accountability within customs operations. This judgment serves as a critical reminder to customs authorities about the consequences of procedural lapses, ensuring that rights of individuals are safeguarded in the customs adjudication process.

The Supreme Court's decision sets a precedent for similar cases, ensuring that statutory provisions are not circumvented by interim measures, thereby fortifying the legal framework governing the seizure and release of goods under the Customs Act.

As the appeals filed by the Revenue were dismissed, the Supreme Court has ordered the immediate release of the seized Maserati car to Jatin Ahuja, marking a victory for the respondent and sending a clear message about the inviolability of statutory timelines in legal proceedings.

Union of India v. Jatin Ahuja, (SC) : Law Finder Doc Id # 2780965