ON Civil Appeal No 1529 of 197 1
From the Judgment and Order dated 31770 of the Calcut ta High Court in Appeal No 29 of 1969
G Ramaswamy Additional Solicitor general AK Gan guli P Parmeshwaran and AK Srivastava for the Appel lants
DN Mukharjee and PK Ghosh for the respondents
The judgment of the Court was delivered by PATHAK CJ
This appeal by certificate granted by the High Court of Calcutta is directed against the judgment dated 31 July 1970 of that High Court partly allowing a writ petition arising out of proceedings under the 
On 5 May 1966
noticing an advertisement in a newspaper offering imported manual and electric typewriters adding and calculating machines the Customs authorities raided the premises of Messrs Typewriters and Stationery Operation Private Limited Calcutta on the same day and recovered fifteen typewriters adding and calculating machines
The machines had been sold to the company by RN Bagh who in turn disclosed that he had purchased them from the crew members of some vessels
On 7 May 1966 the Customs Offi cers searched the residence and business premises of Messrs Central Typewriter Company and recovered several typewriters and calculating and adding machines
From some documents seized during the raid and statements recorded it appeared that there was a conspiracy between the respondents and some of the crew members of certain vessels where it was agreed that the respondents would look after and maintain the families of the crew members in India while they were abroad would advance them money and the crew members would draw their wages abroad in foreign currency and purchase with those moneys second hand typewriters adding and calcu lating machines and then bring them to India and deliver them to the respondents after clearance under the conces sions provided in the Baggage Rules in order to circumvent the restrictions imposed under the Import Trade Control 286 Regulations
It appeared that during the period 1961 to 1965 about 200 pieces of typewriters adding and calculating machines had been acquired by the respondents for a sum of about Rupees one lakh and out of which forty six had been sold
The goods were seized on 57 May 1966 and notices were due to issue under section 124a of the within six months from that date
Meanwhile the Subordinate Offi cers Customs Department showed cause to the Additional Collector of Customs Calcutta who had the same powers under the Act as the Collector for granting an extension of time for serving the show cause notice
On 3 November 1966 the Additional Collector granted an extension of time for a further six months in terms of the proviso to section 1102 of the 
On 6 December 1966 the Assistant Collector of Customs issued notice to each of the respondents calling upon him to show cause why the said seized machines should not be con fiscated under section 111d and section 111o of the read with s32 of the Import and Export Control Act 1947 and why penal action should not be taken against the respondents under section 112 of the 
On 18 April 1967 the respondents filed a writ petition in the High Court at Calcutta challenging the proceedings initiated against them by the customs authorities including the seizure of the machines
On 11 December 1968 a learned Single Judge of the High Court repelled the contention of the appellants that the proceeding was administrative in nature and held that the order of extension to be made under section 1102 of the was a quasi judicial order and as the order had been made ex parte and without notice to the owner of the goods it was in breach of the principles of Natural justice and therefore void
He observed that as the order moreover was not communicated to the respondents before the expiry of six months from the date of seizure the order of extension was invalid and the respondents had become entitled as of right to the return of the goods
The writ petition was allowed and the proceedings initiated by the respondents against the appellants were quashed by the learned Single Judge by his judgment and order dated 11 December 1969
The appellants appealed to the Appellate Bench and the Appellate Bench of the High Court by judgment dated 31 July 1970 allowed the appeal in part quashing the order of extension dated 3 November 1966 and directing the appel lants to restore the machines and docu 287 ments seized from the respondents
The Customs authorities were permitted to initiate and complete such other proceed ings against the respondents as were open to them in law
The appellants now appeal to this Court in so far as the judgment and order of the Appellate Bench proceeds against them
Section 1101 of the provides that if the proper officer has reason to believe that any goods are liable to confiscation under that Act he may seize such goods
Section 1102 provides Where any goods are seized under sub section 1 and no notice in respect thereof is given under clause a of Section 124 within six months of the seizure of the goods the goods shall be returned to the person from whose possession they were seized Provided that the aforesaid period of six months may on sufficient cause being shown be extended by the Collector of Customs for a period not exceeding six months Section 124a to which reference has been made in section 1102 provides that no order confiscating any goods or imposing any penalty on any person shall be made under Chapter XIV unless the owner of the goods or such person is given notice in writing informing him of the grounds on which it is proposed to confiscate the goods or to impose a penalty and is given an opportunity of making a representa tion in writing and is also given a reasonable opportunity of being heard in the matter
It is apparent that goods liable to confiscation may be seized by virtue of section 1101 but that those goods cannot be confiscated or penalty imposed without notice opportunity to represent and to be heard to the owner of the goods or the person on whom penalty is proposed
This notice must be given within six months of the seizure of the goods as envisaged by section 1102 of the Act and if it is not the goods must be returned to the person from whom the goods were seized
The proviso to section 1102 of the Act allows the period of six months to be extended by the Collector of Customs for a period not exceeding six months on sufficient cause being shown to him in that behalf
The Appellate Bench of the High Court is of opinion that the 288 decision of the High Court in Assistant Collector of Customs vs Charan Das Malhotra  lays down the correct law and applies to the facts of this case that there is a duty on the part of the Collector of Customs to act judicially in exercising the power conferred under the proviso to section 1102 of the Act and that therefore notice should have gone to the owner of the goods before the exten sion was ordered under the proviso
It has been held further that the order of extension should have been communicated to the owner and as that was not done the order was ineffec tive
When this appeal came up for hearing before a Bench of this Court reliance was placed by learned counsel for the respondents on Charan Das Malhotra supra
That decision was rendered by two learned Judges of this Court
Reference was also made in Ms Lokenath Tolaram etc
BN Rangwani and Others  which was a decision rendered by four learned Judges of this Court and in which reference was made to Charan Das Malhotra supra
The learned Judges hearing this appeal were of the opinion that the view taken in the two cases required reconsideration and therefore this appeal was referred to a larger Bench for a decision on the question whether the Collector is bound to issue notice to the persons from whose possession the goods are seized and to give him an opportunity to make his representation on the point whether the time for issuing notice under section 124a of the Act should be extended beyond six months
That is how the appeal has come before us
In Charan Das Malhotra supra the Court referred to the consideration that seizure was authorised under section 1101 on the mere reasonable belief of the concerned officer that it was an extraordinary power and that there fore Parliament had envisaged a period of six months from the date of seizure for completing an enquiry on whether the goods should be confiscated and that if the enquiry was not completed within that period the goods must be returned
In some cases it is possible that the enquiry requires longer than six months and accordingly power was conferred on the Collector an officer superior in rank and also an Appellate Authority under section 128 to extend the time subject to two conditions that it did not exceed one year and that suffi cient cause must be shown for such extension
The Court observed that the Collector was not expected to propose the extension mechanically or as a matter of routine but only on being satisfied that facts exist which indicate that the investigation could not be completed for bona fide reasons within the time provided in section 1102 and that therefore extension of the period has become neces 289 sary
The Collector the Court emphasized cannot extend the time unless he is satisfied on facts placed before him that there is sufficient cause necessitating extension in which case the burden of proof would clearly lie on the Customs authorities applying for extension to show that such exten sion was necessary
Taking these consideration into record the Court held that the words sufficient cause being shown required an objective examination of the matter by the Collector
It was pointed out that ordinarily on the expiry of the period of six months from the date of seizure the owner of the goods would be entitled as of right to restora tion of the seized goods and that right could not be de feated without notice to him that an extension was proposed
The Court rejected the contention that the continuing inves tigation would be jeopardised if such notice was given
The Court held that the power under the proviso to section 1102 was quasi judicial at any rate one requiring a judicial ap proach and consequently the person from whom the goods were seized was entitled to notice before the period of six months envisaged by section 1102 was extended
The point was considered again in Ms Lokenath Tolaram etc
BN Rang wani and Others supra by a Bench of four Judges of this Court and the Court referred to the view taken in Charan Das Malhotra supra but it declined to interfere because the appellants in that case had themselves waived notice con cerning extension of the time
The Court did not specifical ly give the stamp of approval to the law laid down in Charan Das Malhotra supra
There is no doubt that the words on sufficient cause being shown in the proviso to section 1102 of the Act indi cates that the Collector of Customs must apply his mind to the point whether a case for extending the period of six months is made out
What is envisaged is an objective con sideration of the case and a decision to be rendered after considering the material placed before him to justify the request for extension
The Customs Officer concerned who seeks the extension must show good reason for seeking the extension and in this behalf he would probably want to establish that the investigation is not complete and it cannot yet be said whether a final order confiscating the goods should be made or not
As more time is required for investigation he applies for extension of time
The Collec tor must be satisfied that the investigation is being pur sued seriously and that there is need for more time for taking it to its conclusion
The question is whether the person claiming restoration of goods is entitled to notice before time is extended
The right to notice flows not from the mere circumstance that there is a proceeding of a judi cial nature but indeed it goes beyond to the basic reason which gives to the proceeding its character and that 290 reason is that a right of a person may be effected and there may
be prejudice to that right if he is not accorded an opportunity to put forward his case in the proceeding
In the other words the issue is whether there is a right in a person from whose possession goods are seized and which right may be prejudiced or placed in jeopardy unless he is heard in the matter
It cannot be disputed that section 110 sub section 2 contemplates either notice within six months from the date of seizure to the person from whose possession the goods have been seized in order to determine whether the goods should be confiscated or the restoration of the goods to such person on the expiry of that period
If the notice is not issued in the confiscation proceedings within six months from the date of seizure the person from whose pos session the goods have been seized becomes immediately entitled to the return of the goods
It is that right to the immediate restoration of the goods upon the expiry of six months from the date of seizure that is defeated by the extension of time under the proviso to section 1102
When we speak of the right of the person being prejudiced or placed in jeopardy we necessarily envisage some damage or injury or hardship to that right and it becomes necessary to inquire into the nature of such damage or injury or hardship for any case to be set up by such person must indicate the damage or injury or hardship apprehended by such person
In the present case one possibility is that the person from whose possession the goods have been seized may want to establish the need for immediate possession having regard to the nature of the goods and the critical conditions then pre vailing in the market or that the goods are such as are required urgently to meet an emergency in relation to a vocational or private need and that any delay in restora tion would cause material damage or injury or hardship either by reason of some circumstance special to the person or of market conditions or of any particular quality of requirement for the preservation of the goods
But it will not be open to him to question whether the stage of the investigation and the need for further investigation call for an extension of time
It is impossible to conceive that a person from whose possession the goods have been seized with a view to confiscation should be entitled to know and to monitor how the investigation against him is proceeding the material collected against him at that stage and what is the utility of pursuing the investigation further
These are matters of a confidential nature knowledge of which such person is entitled to only upon the investigation being completed and a decision being taken to issue notice to show cause why the goods should not be confiscated
There can be no right in any person to be informed midway during an investigation of the material collected in the case against him
Consequently while notice may be necessary to such person to show why 291 time should not be extended he is not entitled to informa tion as to the investigation which is in process
In such circumstances the right of a person from whose possession the goods have been seized to notice of the proposed exten sion must be conceded but the opportunity open to him on such notice cannot extend to information concerning the nature and course of the investigation
In that sense the opportunity which the law can contemplate upon notice to him of the application for extension must be limited by the pragmatic necessities of the case
If these considerations are kept in mind we have no doubt that notice must issue to the person from whose possession the goods have been seized of the proposal to extend the period of six months
In the normal course notice must go to such person before the expiry of the original period of six months
It is true that the further period of six months contemplated as the maximum period of extension is a short period but Parliament has contemplated an original period of six months only and when it has fixed upon such period it must be assumed to have taken into consideration that the further detention of the goods can produce damage or injury or hardship to the person from whose possession the goods are seized
We have said that notice must go to the person from whose possession the goods have been seized before the expiry of the original period of six months
It is possible that while notice is issued before the expiry of that peri od service of such notice may not be effected on the person concerned in sufficient time to enable the Collector to make the order of extension before that period expires
Service of the notice may be postponed or delayed or rendered inef fective by reason of the person sought to be served attempt ing to avoid service of notice or for any other reason beyond the control of the Customs authorities
In that event it would be open to the Collector if he finds that sufficient cause has been made out before him in that behalf to extend the time beyond the original period of six months and thereafter after notice has been served on the person concerned to afford a postdecisional hearing to him in order to determine whether the order of extension should be cancelled or not
Having regard to the seriousness and the magnitude of injury to the public interest in the case of the illicit importation of goods and having regard to considerations of the damage to economic policy underlying the formulation of import and export planning it seems necessary to reconcile the need to afford an opportunity to the person effected with the larger considerations of public interest
Our attention has been drawn to Ganeshmul Channilal Gandhi 292 and another vs Collector of Central Excise and Asstt
Col lector Bangalore AIR where the High Court of Mysore has held that no notice is necessary to the person from whose possession the goods are seized when the Collector proceeds to consider whether the original period of six months should be extended
Reliance has also been placed on Sheikh Mohammed Sayeed vs Assistant Collector of Customs for Preventive and others AIR 1970 Calcutta 134 which proceeds on the view that the Collector has to satisfy himself only subjectively on the point whether extension is called for
In Karsandas Pepatlal Dhineja  Others vs Union of India and Another the High Court de fined the implications of the use of the words on suffi cient cause being shown in a statutory proceeding
None of these cases convince us that the person from whose posses sion the goods have been seized is not entitled to notice of the proposal to extend the period
In our opinion the person from whose possession the goods have been seized is entitled to notice of the proposal before the Collector of Customs for the extension of the original period of six months mentioned in section 1102 of the  and he is entitled to be heard upon such pro posal but subject to the restrictions referred to earlier in regard to the need for maintaining confidentiality of the investigation proceedings
The appeal is allowed accordingly and to the extent set forth in our judgment the orders of the High Court are modified but there is no order as to costs
Y Lal Appeal al lowed


Summary:
Shri Anantharamakrishnan a reputed industrialist died in Madras on April 18 1964 intestate leaving behind his widow Valli two sons Sivasailam and Krishnamoorthy and two daughters Kalyani and Seetha
Some time thereafter his son Sivasailam being an accountable person rendered the Estate Duty account
All other heirs ie his mother broth er and sisters who were also accountable persons being the heirs of the deceased wrote to the Assistant Controller of Estate Duty that as accountable persons they agreed to abide by the accounts rendered by Sivasailam and whatever explana tion is furnished by him would be binding on them
Ms Amalgamations Private Ltd is a company which held shares in most of the companies including Simpson and Compa ny Ltd in which company the deceased Anantharamakrishnan too held shares
By a letter of April 27 1965 Amalgama tions informed the assessing authority that the deceased had transferred property to it in the form of shares and that at the time of his death he had controlling interest in the Company
On September 13 1965 the Assessing Authority wrote to Amalgamations that the deceased having transferred 80377 shares of Simpson as such Amalgamations was a con trolled company within the meaning of section 17 of the Estate Duty Act and thus the said company had to be regarded as one of the accountable persons in respect of the estate of the deceased
Amalgamations was therefore required to submit an account of the estate
Accordingly Amalgamations flied a return and no objection thereto was taken by any of the heirs
Treating Amalgamations as a controlled company and in view of the fact that the deceased had control over its affairs the assessing authority valued the shares as per the provisions of Rule 15 of the Rule framed by 234 the Board under Section 301e of the Act
The principal value of the shares was determined of Rs21229998 and the duty was computed at Rs1677469758 out of which provi sional duty in the sum of Rs655054273 had been paid
The assessment order was addressed both to Amalgamations as also to Shri Sivasailam as accountable persons
No appeal was preferred against the said assessment by the accountable persons
KS Sundaram husband of the appellant as her agent and constituted power of attorney on June 11 1974 wrote to the Assistant Controller seeking certain clarifications
The Assistant Controller referring to the agreement between the heirs of the deceased Anantharamakrishnan that they were bound by the accounts rendered or explanation given by Sivasailam replied that since all subsequent proceedings had been completed after discussion with Sivasailam and Amalgamations the assessment had become final and that it was not possible to enter into any further discussion
On 2nd January 1975 appellant s husband as agent filed an application under Sec
61 of the Estate Duty Act and it was contended by him that the assessment order was vitiated by several errors inasmuch as Rule 15 only prescribed the method of valuation of shares and debentures of the con trolled company and the rule was appendage to Sections 36  37 of the Act
It was urged that the assessment order did not show any details and therefore a rectification order should be made indicating the exact amount included under Section 171 of the Act as the property passing on the death of the deceased
He stated that he required this information to know the precise amount which his principal had to pay to Amalgamations as the assessment order did not in terms indicate apportionment of the duty for which reason rectification was required
On January 25 1975 the Assistant Controller declared by an order that he was unable to find any mistake in the assessment order which called for any rectification and therefore he declined to act under Sec
61 of the Act
Order passed by the Assistant Controller was challenged in the High Court by means of Writ Petitions
The High Court dismissed the Writ Petitions holding that there was no error apparent on the record and therefore there was no reason for invoking Sec
61 of the Act
The High Court took the view that proceedings reflected a private dispute between the appellant and other members of the family
Hence this appeal by the appellant
235 Dismissing the appeal the Court HELD All the heirs other than Sivasailam had agreed that as accountable persons they would abide by the accounts rendered by Sivasailam and any information furnished by him with regard to the estate duty matter would be binding on them
The appellant cannot be heard now to dispute the quantum of liability and the basis on which the liability was computed
Nor is it open to her to contend that it is not Amalgamations which is liable to pay the duty but the duty is payable by the heirs of the deceased
The assessment had become final and no appeal against it had been attempt ed
239C D The appellant acquiesced wholly and completely in the assessment to estate duty being made on Amalgamations
239E The assessment was completed in 1970 and the entire estate duty has now been paid up
It was only after the entire estate duty was paid that the appellant filed the application for rectification on January 2 1975
239E F The question whether the assessment was justified on Amalgamations or should it have been taken against the heirs of the deceased stands concluded now and upon all the facts and circumstances of the case it was not permissible for the appellant to have recourse to Sec
61 of the Act in order to re open the case as there was no mistake apparent on the record
240D E That this litigation was woven around a private dispute among the family members
239G Hari Vishnu Kamath vs Syed Ahmed Ishaque and Others   1123 Hind Trading Company vs Union of India  Anr   MK Venkatachalam Income tax Officer and Another vs Bombay Dyeing and Manufacturing Co Ltd   149 50 Commissioner of Income tax Madras vs Mr P Firm Muar  822 and Thungabhadra Industries Ltd vs The Government of Andhra Pradesh   180 referred to