Court holds that oral waiver of show cause notice valid; disputed factual issues to be resolved by Customs authority within four weeks
In a significant judgment delivered on September 2, 2026, the Delhi High Court (Division Bench comprising Justices Anil Kshetarpal and Shail Jain) dismissed a writ petition seeking the immediate release of two gold bars weighing 166 grams detained at Indira Gandhi International Airport. The petitioner, Mohd Khalid, challenged the continued detention of the gold bars on the ground that no written show cause notice under Section 124 of the Customs Act, 1962, had been issued, rendering the detention unlawful.
The Court meticulously examined the facts and legal contentions. The petitioner arrived from Saudi Arabia on December 10, 2024, and upon arrival, the gold bars were seized by Customs authorities for alleged violation of the Green Channel rules. The petitioner’s statement under Section 108 of the Customs Act was recorded on the same day, wherein he admitted non-declaration of the gold, awareness of customs duty liability, and agreed to pay applicable duty, fine, and penalty. Importantly, the statement included an express waiver of the requirement for any show cause notice or personal hearing.
While the petitioner contended that the absence of a formal written show cause notice violated statutory mandates and cited the Supreme Court’s ruling in Union of India v. Jatin Ahuja (2025), the Customs Department argued that the oral waiver recorded in the Section 108 statement amounted to an oral show cause notice permissible under the first proviso to Section 124. The Department further submitted its readiness to provide the petitioner an opportunity for personal hearing and adjudicate the matter expeditiously.
The Court held that disputed factual questions such as voluntariness of the statement, ownership of the gold, and compliance with declaration requirements could not be resolved in writ jurisdiction. Instead, these should be addressed by the competent adjudicating authority after affording the petitioner a reasonable opportunity of personal hearing. The Court emphasized that while the absence of a written show cause notice is a serious procedural issue, the oral waiver by the petitioner and the contemporaneous detention receipt indicating the statutory process prevent the Court from directing release at this stage.
Consequently, the Court directed the Customs authority to complete the adjudication process within four weeks from the petitioner’s appearance before it. The petitioner was granted liberty to present all relevant evidence and explanations. The Court clarified that it did not express any opinion on merits such as the legality of detention, confiscation, or penalty, leaving these to be decided by the statutory authority.
This judgment underscores the delicate balance between procedural safeguards under Customs law and the need for expeditious resolution of disputes. It affirms that oral waiver of show cause notice is permissible if recorded appropriately and that writ courts should refrain from adjudicating factual disputes better suited for administrative authorities.
Bottom Line:
Customs Law - Detention of gold bars at airport - Writ petition for release of detained goods - No written show cause notice issued under Section 124 of Customs Act - Oral waiver by petitioner regarding notice and personal hearing - Court directs completion of statutory adjudication process by competent authority within a time-bound manner - Disputed factual issues to be resolved by adjudicating authority, not in writ jurisdiction.
Statutory provision(s):
Customs Act, 1962 Sections 108, 110(2), 124, 77, 79; Baggage Rules, 2016
Mohd Khalid v. Commissioner of Customs, (Delhi)(DB) : Law Finder Doc Id # 2971838
