Shalabh Agarwal And Another Vs Additional Director General And Another (Allahabad High Court)
Retention of Seized Cash Beyond Six Months Without Valid and Communicated Extension Order is Without Jurisdiction;Allahabad HC Orders Return of Seized Cash Because Extension Order Was Never Communicated; Seized Property Must Be Returned Because Mechanical Approval Cannot Extend Limitation; Allahabad HC Condemns DRI Action Because Transfer of Seized Cash During Pending Writ Defeated Justice; Taxpayer Gains Indefeasible Right to Return of Seized Cash Because Statutory Time Limit Expired.
The Allahabad High Court held that retention of seized cash beyond the statutory period of six months under Section 110(2) of the Customs Act, 1962 is wholly without jurisdiction unless a valid extension order, containing recorded reasons and reflecting independent application of mind by the competent authority, is passed and communicated to the affected person before expiry of the original period. The Court found that the DRI’s internal note-sheet did not constitute a lawful extension order and was never communicated to the petitioners. Consequently, the petitioners acquired an indefeasible right to the return of the seized cash upon expiry of six months. The Court further strongly criticized the DRI for transferring the seized cash to the Income Tax Department during the pendency of writ proceedings without informing the Court, describing it as a deliberate attempt to overreach and defeat the judicial process. Costs of ₹1 lakh were imposed on the DRI.
