Court holds that issuance of Show Cause Notice within statutory extension under Section 110(2) of Customs Act, 1962 precludes relief for release of goods despite petitioner’s challenge to extension validity.
In a significant decision dated September 2, 2026, the Delhi High Court (Division Bench comprising Justices Anil Kshetarpal and Shail Jain) dismissed the writ petition filed by Iqrar Ali seeking release of nine gold bars and one gold chain weighing approximately 172 grams, detained by Customs authorities at Indira Gandhi International Airport, New Delhi. The petitioner contended that the statutory period for issuance of a Show Cause Notice under Section 110(2) of the Customs Act, 1962 had expired without such notice being issued, mandating the release of the seized goods.
The Court meticulously examined the statutory scheme under Section 110(2) and the proviso thereto, which allows the Customs Commissioner to extend the six-month period for issuance of a Show Cause Notice by a further six months for valid reasons recorded in writing, provided the affected party is informed. The petitioner challenged the validity of this extension, alleging insufficient reasons and lack of communication.
However, the Court found that the competent authority had granted the extension on August 20, 2025, prior to expiry of the original six months, and critically, the Show Cause Notice was issued on February 23, 2026—before the extended period expired on February 25, 2026. Since the Show Cause Notice was thus validly issued within the extended timeframe, the relief under Section 110(2) for release of goods was not available to the petitioner.
Further, the Court held that the petitioner’s reliance on a purported waiver of the Show Cause Notice and personal hearing was untenable, as the Customs Act does not provide for waiver of mandatory procedural requirements under Section 124. Allegations concerning the circumstances under which the petitioner’s statement was recorded were deemed disputed facts, not warranting interference at this stage, especially since the Show Cause Notice had been issued.
The Court clarified that the petitioner retains the right to contest all factual and legal grounds during the adjudicatory proceedings pursuant to the Show Cause Notice, including questioning the detention, confiscation proposals, and evidentiary issues.
This judgment underscores the mandatory nature of procedural safeguards and timelines under the Customs Act and affirms that extension of the statutory period for issuance of Show Cause Notice, when validly granted and followed by issuance of notice within that period, bars the automatic release of seized goods.
Bottom Line:
Customs Act, 1962 - A Show Cause Notice issued within the extended statutory period under Section 110(2) of the Customs Act bars the application of the relief contemplated under the section for release of seized goods.
Statutory provision(s):
Customs Act, 1962 Sections 110(2), 111(d), 111(j), 111(l), 111(m), 111(o), 112(a), 112(b), 114AA, 124
Iqrar Ali v. Commissioner of Customs, (Delhi)(DB) : Law Finder Doc Id # 2971834
