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IN THE HIGH COURT OF JUDICATURE AT PATNA
P. B. BAJANTHRI and ALOK KUMAR PANDEY, JJ.
CWJC No.10582 of 2024
(25.9.2024)
Assam Supari Traders ... Petitioners
vs.
Union of India & Ors. ... Respondents
Customs Act, 1962 – Sections 7, 11, 46, 47 and 110 read with Section 3 (2) of Foreign Trade (Development and Regulation) Act, 1992 – Seizure of dried Areca Nuts – Provisional and conditional release of goods – 'Reason to believe' is an integral part of issuance of search warrant – 'Reason to believe' is the most significant safeguard available to Authorised Officer to conduct search – 'Reason to believe' cannot be a rubber stamping of opinion already formed by a competent officer – Officer who is supposed to write down his minimum reasons to believe has to be independently apply his mind – For seizure of goods, unless there are strong and compelling reasons to believe that goods is 'imported', one cannot draw inference that officer who had seized goods believe it to be foreign goods – Failure to disclose right at the beginning, 'reason to believe' in seizure memo read with Section 110 of Act, 1962 would not be a mere irregularity but an illegality in not assigning some material information and reasons in support of violation of any statutory provision – Violation thereof would vitiate entire proceedings and cause order of provisional attachment to be rendered illegal – Opinion of Ministry of Agriculture and Farmer Welfare and ICAR that seized Areca Nuts seems to be foreign origin is not reliable and acceptable – Suspected opinion of local traders that seized dried Areca Nuts is a foreign origin is not reliable – Impugned seizure memo set aside – Writ Petition allowed. (Paras 12, 18, 21, 22, 27, 33 and 34)
Administrative Law – Reasoned Order – Reasons have to be made explicit – It is only reason that can enable reviewing authority to discern how officer found his reasons to believe – A rubberstamp reason can never take character of 'reasons to believe' – Prima facie formation of belief should be rational, coherent and not ex facie incorrect and contrary to what is on record. (Para 18)
Judicial Decorum – Reasoned Judgment/Order – Right to know reasons for decisions made by Judges is an indispensable right of a litigant – Even a brief recording of reasoned opinion justifying decision made would suffice to withstand test of a reasoned order or judgment – A non-speaking, unreasoned or cryptic order passed or judgment delivered without taking into account relevant facts, evidence available and law attracted thereto has always been looked at negatively and judicially de-recognized by Courts – Mere use of words or language of a provision in an order or judgment without any mention of relevant facts and evidence available thereon has always been treated by superior courts as an order incapable of withstanding test of an order passed judicially. (Para 30)
P. B. Bajanthri, J.—The petitioner has prayed for the following reliefs:—
“(i) Quashing of the Seizure dated 02.04.2024 corresponding to Unit Case No. 01/KNE/ 2024 – 25 whereby 24,288 Kgs of Dried Areca Nuts contained in 352 bags along with ASHOK LEYLAND Truck Bearing Registration No. TN – 29BY 3638, in the course of inter state transportation, has been seized under Section 110 of the Customs Act for alleged violation of Section 7, 11, 46 and 47 of Customs Act, 1962 read with Section 3 (2) of the Foreign Trade (Development and Regulation) Act, 1992;
(ii) Vacation of the Seizure order dated 02.04.2024 and consequential discharge of the Bank Guarantee and the bond furnished by the petitioner to secure the provisional release of the seized goods; and
(iii) Restraining the Respondents from giving effect to and taking any coercive action arising out of Seizure dated 02.04.2024 during the pendency of the present writ application and/or without the leave of this Hon’ble Court.”
2. The petitioner is a registered dealer / trader in the name of M/s Assam Supari Traders. He is in possession of GST Number i.e. GSTIN/UIN No.18ABQFA3393P1ZK issued by the competent authority. He is employed in the business of dried Areca Nuts. He had booked a consignment of 24,288 Kgs of dried Areca Nuts contained in 352 bags invoiced at the rate of Rs. 262.50 per kg inclusive of taxes to one M/s Rabia Traders, District - Chikkamangluru, Karnataka having GSTIN/UIN No. 29CSBPA4742E1Z2. This is evident from the invoice no. AST29/2023-2024 dated 30.03.2024. The consignment E-Way Bill No. 811399620869 stated to be generated at 11.30 hours on 30.03.2024 and it was valid up to 16.04.2024.
3. The aforementioned consignment was dispatched through Ajay Goods Carrier vide Truck bearing registration No. TN – 29 BY 3638 with Transport Consignment Note No. D/0323 dated 30.03.2024 was generated. The truck was in-transit from Nagaon, Guwahati, State of Assam to State of Karnataka. It was intercepted and detained by the jurisdictional officer of Forbishganj Customs (Preventive Division) near Paringola Check Post upon specific information received from Customs (Prev.) Patna. Thereafter, an unnumbered detention memo was issued on 02.04.2024. Driver of the Truck who was in possession of the relevant documents and who had placed the same before the authorities, the same were not examined on the spot. On the other hand, Truck was taken to their Circle Office, Forbishganj on the pretext of examination of various documents. On the same day, respondent No. 6 invoked Section 110 of the Customs Act, 1962 (for short ‘the Act, 1962’) and proceeded to draw seizure memo on the alleged allegations relating to violation of Sections 7, 11, 46 and 47 of the Act, 1962 read with Section 3 (2) of the Foreign Trade (Development and Regulation) Act, 1992 (for short, ‘the Act, 1992’) vide seizure memo dated 02.04.2024 with assigned Unit Case No. 01/KNE/24-25.
4. Pursuant to the seizure memo, petitioner had filed an application for provisional release of the seized goods on 15.04.2024 under Section 110 (A) of the Act 1962 before the Additional Commissioner-cum-Adjudicating Authority along with supporting documents to the extent of claiming ownership of seized goods, thereafter, seized goods were released provisionally with certain conditions. Thus, feeling aggrieved by the seizure memo dated 02.04.2024, petitioner has preferred the present petition.
Petitioner’s counsel submission :
5. Learned counsel for the petitioner submitted that there is no compliance to Section 110 of the Act, 1962, in particularly ‘reason to believe’, is not supported by application of mind read with some prima facie materials to the extent of the alleged violation of Sections 7, 11, 46 and 47 of Act, 1962 read with Section 3(2) of the Act, 1992. On this contention alone, impugned seizure memo dated 02.04.2024 is liable to be set aside.
6. It is further submitted that Section 7 of the Act, 1962 relates to Appointment of Customs Port
Seizure of goods under the Customs Act requires objective evidence to establish 'reason to believe' that goods are of foreign origin; mere suspicion or subjective opinions are insufficient.
The court emphasized that interference at the stage of issuance of show cause notice should be rare and not in a routine manner, and the availability of alternative remedy should be considered before....
The customs authorities must establish credible material supporting a belief that goods are of foreign origin before seizure; failure to do so renders the seizure unlawful.
The court validated the customs authority's seizure of goods based on reasonable suspicion, upholding the impossibility of judicial review on the sufficiency of the officer's reasons.
Section 123 of Act, 1962 provides that where any goods included under Sub-section 2 of Section 123 are seized on basis of reasonable belief that same are smuggled goods, then burden of proving that t....
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