Strict compliance with the procedures and conditions mandated for provisional attachment under section 110(5) of the Customs Act, 1962 is necessary, and the provisional attachment cannot be continued beyond the prescribed period without lawful authority.

JUDGMENT :

UJJAL BHUYAN, J.

1. Heard Mr. Pathak, learned counsel for the petitioners and Mr. Jetly, learned senior counsel assisted by Mr. Mishra, learned counsel for the respondents.

2. Challenge made in this writ petition is primarily to the letter dated 08.05.2019 issued by the Directorate of Revenue Intelligence, Kolkata Zonal Unit (respondent No. 2) to the General Manager, Kotak Mahindra Bank Limited, Malad (East) Mumbai (respondent no. 3) requesting debit-freeze of one account of the petitioners.

3. A perusal of the letter dated 08.05.2019 would go to show that there was an ongoing investigation undertaken by the Directorate of Revenue Intelligence in respect of import of precious and semi-precious stones from Kolkata. In the course of the investigation, it was found that petitioners had opened an account in the bank of respondent No. 3 bearing Account No. 2812920972. Respondent No. 3 was requested to keep the said account under debit-freeze mentioning that the letter was issued in terms of section 110 of the Customs Act, 1962.

3.1 Following the above provisional attachment, three other bank accounts of the petitioners with respondent No. 3 were frozen with effect from 15.05.2019 being Account Nos. 9612928856, 9712429789 and 9812301930 on instructions issued by respondent No. 2.

4. Respondents have filed reply affidavit. Stand taken in the affidavit is that an intelligence was developed by the Directorate of Revenue Intelligence, Kolkata Zonal Unit to the effect that certain unscrupulous importers were importing goods declared as ‘rough precious stones and semi-precious stones’, which were over-invoiced. During the investigation it revealed that petitioners had made such imports from overseas supplier of Hongkong. Rationale for importing such ‘rough precious stones and semi-precious stones’ is that value of those can be inflated and there is no customs duty on the said items. Only Integrated Goods and Services Tax (IGST) is required to be paid but that too at the rate of only 0.25%. Such imports made by the petitioners would be to the tune of Rs. 2000 crores. One person by the name of Shri. Sourabh Johari of Madhya Pradesh who was involved in this fraudulent import has been arrested. In his statement he has admitted that he undertook such fraudulent imports on behalf of several companies including that of the petitioners. Summons were issued to the Directors of petitioner No. 1 for appearance but summons could not be served as they were not found in their declared addresses. They did not appear before the Directorate of Revenue Intelligence and did not co-operate with the investigation. In so far provisional attachment of the bank account is concerned, while admitting that under section 110(5) of the Customs Act, 1962, provisional attachment can be for a period of only 12 months it is however stated that petitioners have neither approached the Directorate of Revenue Intelligence to prove the bona fides of their imports nor have they joined the Directorate of Revenue Intelligence in the investigation. Due to non-cooperation of the petitioners, investigation has not reached its finality.

5. Petitioners have filed rejoinder affidavit denying the allegations made by the respondents in their reply affidavit and reiterating what has been contended in the writ petition.

6. While learned counsel for the petitioners submits that issue involved in the present writ petition is within a narrow compass, namely, whether provisional attachment of bank account can be continued beyond the period of six months extendable by another period of six months. In so far the present case is concerned, he submits that even the extended period of six months was not available to the respondents as no order was passed for extending the initial period of six months.

7. On the other hand, Mr. Jetly, learned senior counsel for the respondents has extensively referred to the averments made in the reply affidavit and submits that conduct of the petitioners does no