2026-VIL-578-ALH-CU
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CUSTOMS High Court Cases

Customs - Mandatory return of seized cash on expiry of statutory period under Customs Act – Seizure of Cash during search proceedings – Non-issue of show cause notice within Six months from the date of seizure - The Customs authorities neither issued SCN within the prescribed period nor communicated any extension order before the expiry of the six-month period. Subsequently, Customs authorities transferred the seized cash to income tax authorities - Whether seized cash must be mandatorily returned to the person from whom it was seized when no show cause notice is issued within six months of seizure and no valid extension order communicating the extension to the person concerned is passed before expiry of the statutory period – HELD - The seized cash must be mandatorily returned on expiry of six months in accordance with Section 110(2) of the Customs Act, 1962. The order sheet dated 18.02.2026 purporting to grant extension does not satisfy the requirements of a valid approval order because it merely bears a signature without any recorded reasons or evidence of application of mind by the competent authority, rendering it a mere rubber stamp - Furthermore, the order was never communicated to the petitioners before the expiry of the six-month period, which is a mandatory requirement under the proviso to Section 110(2) - The approval orders for extension must reflect that the higher authority applied its mind and examine the fitness of the case. Consequently, both conditions prescribed under Section 110(2) were not fulfilled and the petitioners earned a legal right to return of the cash on 19.02.2026. The retention of cash beyond this date and subsequent transfer to income tax authorities without informing the Court during pendency of writ petition constitutes illegal action beyond the jurisdiction of the Customs authorities - Though the petitioners may now pursue return of money from income tax authorities in accordance with law, costs of Rs.1,00,000 is imposed on respondents for illegal actions, deliberate obstruction of justice, and overreaching the proceedings – The petition is disposed of
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