Legal principle

Powers under Section 116 of the Customs Act against a vessel's agents for short-landed goods must be exercised within a reasonable time — held to be five years from the date the vessel leaves the port — and the agents' bond cannot be kept alive beyond that five-year period.

Court decision

The Bombay High Court held the submission correct and acceptable: the 12-year delay surpassed imagination, the exercise of Section 116 powers must be undertaken within a reasonable time, and five years is more than reasonable. The show cause notice dated January 19, 1995 could not be sustained; rule was made absolute in terms of prayer (a) with costs, so the petition succeeded and the notice was quashed.

Facts

The petitioners were agents of the foreign flag vessel 'Duke', which called at the Port of Bombay on March 18, 1983 and sailed in the third week of March 1983 after discharging cargo covered by the Import General Manifest they filed. Respondent No. 1 served a show cause notice dated January 19, 1995 alleging that certain goods had been reported short-landed by the Bombay Port Trust. The notice required the petitioners to account for or explain the short-landed goods, failing which penalty would be imposed under Section 116 of the Customs Act, 1962. The petitioners challenged the notice by a writ petition under Article 226 of the Constitution.

Key provisions

• Section 116, Customs Act, 1962 — Penalty for not accounting for goods