Release of Seized Gold Kada For Not Issuing SCN Within Statutory Period: Delhi High Court

The Delhi High Court has directed the Customs Department to release a gold kada weighing 116 grams that had been detained from an Indian passport holder at the Indira Gandhi International Airport, New Delhi, after holding that continued detention without issuance of a Show Cause Notice (SCN) was legally impermissible. The bench of Justice Prathiba M. Singh and Justice Shail Jain has observed that the statutory time limit prescribed under the Customs Act, 1962, had long expired, rendering the seizure unsustainable. The case arose from a writ petition filed under Articles 226 and 227 of the Constitution by an Indian citizen who has been residing in Saudi Arabia for the past ten years. The petitioner had purchased the gold kada abroad and brought it with him while returning to India on 16 January 2024. Upon arrival, Customs officials intercepted him and detained the gold item, issuing a detention receipt on the same day. However, no further adjudicatory proceedings were initiated thereafter. During the hearing, counsel for the petitioner submitted that despite the passage of nearly two years since the detention, the Customs Department had failed to issue any Show Cause Notice. It was also argued that the petitioner was willing to pay applicable customs duty, but the continued detention of the gold without initiating proceedings was arbitrary and contrary to law. On an earlier date of hearing, the High Court had directed the Customs Department to produce the seized gold before it. The item was accordingly produced in a sealed box. While the Court observed that the gold kada did not appear to be personal jewellery of the petitioner, it noted that this factor alone could not justify indefinite detention without following the statutory procedure prescribed under the Customs Act. The Customs Department contended that the petitioner had not approached the authorities for appraisal of the gold item. However, the Court rejected this argument, emphasising that the obligation to issue an SCN within the prescribed time rests squarely on the department once goods are seized under Section 110 of the Customs Act, 1962. Placing strong reliance on the Supreme Court’s decision in Union of India v. Jatin Ahuja, the Bench reiterated that detention of seized goods cannot continue beyond six months unless a valid extension is granted in accordance with the first proviso to Section 110(2) of the Act. Even with such extension, the outer limit for issuance of notice is one year from the date of seizure. In the present case, the Court noted that neither was an SCN issued within six months nor was the period formally extended, and even the maximum permissible one-year period had elapsed. The High Court held that once the statutory timelines lapse, the consequence under law is automatic release of the seized goods to the person from whose possession they were taken. The continued detention of the gold kada was therefore declared impermissible, and Customs was directed to release the item to the petitioner. The Court directed the petitioner to appear before the Customs Department on 8 January 2026, either personally or through an authorised representative, with virtual participation for identity verification. The release of the gold item was made subject to payment of applicable customs duty and warehousing charges calculated as on the date of detention. At the same time, the Bench clarified that if permissible in law, the Customs Department would remain free to initiate proceedings under Section 124 of the Customs Act independently. With these directions, the writ petition was disposed of, bringing relief to the petitioner after prolonged detention of the gold item without adjudication Case Details Case Title: Mohammad Khadim Khan Versus The Commissioner Of Custom & Ors. Case No.: W.P.(C) 16673/2025 Date: 20th December, 2025 Counsel For Petitioner: Mohd. Ather Ansari Counsel For Respondent: Vishal Chadha Senior Standing Counsel Click Here To Read Order Read More: How to Get GST Registration in 1 Hour: The 2026 “Fast-Track” Guide

Release of Seized Gold Kada For Not Issuing SCN Within Statutory Period: Delhi High Court

Membership Required

Most Popular

GST Return Mismatch: Appellate Authority Can’t Convert S. 74 Proceedings to S. 73: GSTAT Orders Fresh Adjudication

Centre Revises SEZ Online User Charges from January 1, 2026

JurisHour | Tax Law Daily Bulletin : February 12, 2026

Encroachments Within Highway Right of Way Are Per Se Illegal, Can’t Be Regularised: Rajasthan High Court Orders Statewide Removal Within 2 Months

GST Return Mismatch: Appellate Authority Can’t Convert S. 74 Proceedings to S. 73: GSTAT Orders Fresh Adjudication

Centre Revises SEZ Online User Charges from January 1, 2026

JurisHour | Tax Law Daily Bulletin : February 12, 2026

Release of Seized Gold Kada For Not Issuing SCN Within Statutory Period: Delhi High Court

Membership Required

RELATED ARTICLES

Most Popular