Union of India & Ors. Vs Jatin Ahuja (Supreme Court of India)
Conclusion: Supreme Court upheld a Delhi High Court order directing release of an imported Maserati car seized by DRI on failure to issue a show-cause notice within time prescribed under section 110 (2) of Customs Act, 1962 as section 110A functions as an interim arrangement to allow release of goods, including perishable or fast-moving items, but does not in any way impede or limit the mandatory time limit in Section 110(2).
Held: In the instant case, there was a seizure of a brand-new Maserati Quattroporte 4.2 Automatic car on December 7, 2010, imported by one Jatin Ahuja, who trades in luxury cars. DRI detained the car on the same day under Section 110 of the Customs Act. It handed the vehicle back to Ahuja the same day on supurdarinama (custody undertaking). Almost a year after the seizure, on October 24, 2011, Commissioner of Customs extended the period for issuance of show-cause notice by six months with effect from October 25, 2011. On May 9, 2012, the DRI cancelled the supurdarinama and took possession of the Maserati. Before the Delhi High Court, Ahuja argued that upon expiry of the period of one year from the date of seizure of the car, he was entitled to an unconditional release of the same. DRI relied on Bombay High Court’s judgment in Jayant Hansraj Shah v. Union of India and contended that since the car was provisionally released under Section 110A on May 09, 2012, the period during which the car was provisionally released under Section should be excluded from calculating the limitation prescribed under Section 110(2). The Delhi High Court allowed Ahuja’s writ petition, holding that non-issuance of a show-cause notice within the prescribed time under Section 110(2) of the Act entitled him to release of the car, as the seizure had lapsed. On appeal. It was held by the Supreme Court that release under Section 110A, which permits provisional release of seized goods, does not remove the consequence of failing to issue a show-cause notice within the period prescribed in Section 110(2). Section 110A merely enables provisional release as an interim arrangement; it does not curtail or override Section 110(2). Moreover, second proviso to Section 110(2) (inserted by Finance Act, 2018) providing exemption where provisional release was ordered, was prospective and not applicable to appeals arising prior to its introduction.
