Delhi High Court Criticizes Customs Department for Unauthorized Disposal of Seized Gold Jewelry Items - 2025-09-11

Delhi High Court Criticizes Customs Department for Unauthorized Disposal of Seized Gold Jewelry Items

The High Court of Delhi has expressed strong disapproval regarding the handling of seized assets by the Customs Department at Indira Gandhi International (IGI) Airport. In a recent hearing presided over by Justice Prathiba M. Singh and Justice Shail Jain, the Court addressed a petition filed by passengers who found their gold jewellery disposed of by authorities without clear legal justification, despite the passing of an Order-in-Original (OIO) that had permitted its redemption.

The Dispute Over Seized Gold

In September 2022, the petitioners—Ms. Puja Jayant, Mr. Jayant Shastri, and Ms. Manisha Shastri—were intercepted at the IGI Airport while arriving from Dubai. The Customs Department confiscated three gold chains weighing a total of 401 grams. Although a subsequent OIO dated April 2023 offered the passengers an option to redeem the jewellery upon payment of redemption fines and penalties, the petitioners faced significant hurdles in securing the release of their property.

Despite attempts to settle the matter through the prescribed legal channels, the petitioners were later informed that the jewellery had already been disposed of by the Department. When they subsequently sought a refund of the sale proceeds, the Assistant Commissioner (Refund) rejected their claim, citing that the redemption offer had lapsed due to the expiration of the 120-day timeframe mandated under Section 125 of the Customs Act, 1962 .

Judicial Scrutiny of Administrative Conduct

The High Court labeled the situation "concerning," noting that the Customs Department proceeded to dispose of the property and then denied the refund even after the OIO had attained finality. The Court emphasized that the refund order failed to clarify the actual amount recovered from the sale of the gold, focusing only on the appraised value.

Justice Prathiba M. Singh remarked on the alarming nature of the Department's actions, highlighting the infringement on the constitutional rights of the citizens involved. The Court observed:

> "The Customs Department has, in fact, seized the gold jewellery, and disposed of the same, and refused to pay any amounts to the Petitioners, despite the OIO having attained finality. Such conduct on behalf of the Customs Department reveals an extremely disturbing situation where passengers are being deprived of their property without authority of law."

Directives for Accountability

To address these systemic failings, the Delhi High Court has ordered the Assistant Commissioner of Customs (Refund), Birendra Singh Khati, to appear in person for the next scheduled hearing. Furthermore, the Court has mandated that this order be brought to the immediate attention of the Secretary of the Department of Revenue within the Ministry of Finance, as well as the Chairman of the Central Board of Indirect Taxes and Customs (CBIC).

The Court has tasked these high-level authorities with convening a meeting to implement corrective measures to prevent such procedural lapses from recurring. This move signifies a tightening of judicial oversight regarding the discretionary powers exercised by customs officials in the handling and disposal of seized personal effects.

The case underscores the fundamental principle that administrative agencies must adhere strictly to established legal procedures, ensuring that the rights of individuals are not compromised through arbitrary actions or gaps in internal documentation.