Voices. Verdicts. Vision

Voices. Verdicts. Vision

SC Orders Release of Maserati Car Seized Without Notice u/s 124(a); Clarifies Time Period to Issue Notice

Union of India vs. Jatin Ahuja [Decided on September 11, 2025]

Maserati Car Seizure

The Supreme Court recently gave a clean chit to the trader of imported second-hand luxury cars, and said that the Maserati car that was seized without any notice of seizure as warranted under Section 124(a) of the Customs Act needs to be returned to the person from whose possession the said car was seized.

The Apex Court, therefore, upheld the view taken by the High Court that the failure on the part of the DRI to issue a show-cause notice under Section 124 within the prescribed time would entitle the petitioner to get back his car, which was seized. Accordingly, the Apex Court dismissed the appeal preferred by the Customs Department in favour of the respondent-taxpayer.

The Two Judge Bench comprising Justice J.B. Pardiwala and Justice Sandeep Mehta observed that in respect of the seized car, there is neither any notice under Section 124(a) issued to the respondent within six months of the seizure nor the period of six months ever came to be extended for a further period of six months. Thus, in the absence of the stipulated notice, even within the extended period up to one year, the consequence that ought to follow is the release of the seized car.

The Bench also explained that the only power that has been conferred upon the Revenue to extend the time period is in accordance with the first proviso to Section 110(2) of the Customs Act, and any effort to say that the release under Section 110A would extinguish the operation of the consequence of not issuing show-cause notice within the statutory period spelt out in Section 110(2), would be contrary to the plain meaning and intendment of the statute.

Briefly, the respondent, engaged in the business of trading imported brand new and domestically purchased second-hand luxury cars, had purchased a brand new Maserati car, which was first detained by the DRI on the same day, and later handed over to the appellant vide a panchnama. Thereafter, the Commissioner of Customs extended the period for issuance of a show-cause notice by a further period of six months, and the DRI cancelled the supurdarinama and took possession of the Maserati Car.

The respondent therefore questioned the legality and validity of the Seizure Panchnama drawn by the Directorate of Revenue Intelligence (DRI) before the High Court in connection with the seizure of a Maserati car. Ultimately, the High Court concluded that the failure on the part of the DRI to issue a show-cause notice under Section 124 of the Customs Act, 1962, within the prescribed time would entitle the petitioner to get back his car, which was seized. Succinctly, the High Court opined that the failure on the part of the authorities to issue SCN within the stipulated time has rendered the proceedings to have lapsed.


Appearances:

Senior Advocate Nisha Bagchi, AORs Gurmeet Singh Makker, Ambar Qamaruddin, Dhananjay Garg, B. Krishna Prasad, and Raj Bahadur Yadav, along with Advocates Sarthak Karol, Navanjay Mahapatra, P.V. Yogeshwaran, Dinesh Kumar Garg, and Abhishek Garg, for the Appellants/ Revenue

AORs Deepak Goel, Abha R. Sharma, Rajeev Singh, Mukesh Kumar Maroria, Ambar Qamaruddin, and Kunal Malik, along with Advocates Gunjan Tanwar, Bijender Singh, Karan Malik, Rakesh Gogia, Tejasvi Kumar, Gopal Singh Chauhan, Shubhankar Jha, and Sidhartha Joshi, for the Respondent/ Taxpayer

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Union of India vs. Jatin Ahuja

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