The Deputy Commissioner (Customs) did not have the power to freeze the petitioner's bank account under the Customs Act, 1962, as the power to freeze bank accounts was only granted to the Commissioner of Customs under an amendment to Section 110(5) that came into effect after the impugned order was passed.

JUDGMENT

1. Petitioner has filed the petition challenging the order Annexure-3 dated 4.6.2019, whereby, bank account of the petitioner company was frozen.

2. Learned counsel for the petitioner has submitted that the investigation in the present case had been initiated and was being carried out under the provisions of Central Goods and Service Tax Act, 2007. Hence, freezing of the bank account by Deputy Commissioner (Customs) under the provisions of Customs Act, 1962 was not permissible. Moreover, no power to issue orders for freezing of bank account was available under the Customs Act, 1962 and the said power had only been introduced by way of amendment to Section 110(5) inserted by the Finance (No.2) Act, 2019, dated 1.8.2019. The said power had only been granted to Commissioner of Customs for a period not exceeding six months with the maximum cap of one year.

3. In support of her arguments, learned counsel for the petitioner has placed reliance on the case of Balaji Enterprises vs. Union of India, (2017) 356 ELT 529 (Del.), wherein it was held as under:-

"11. However, as already noted hereinbefore, in the reply filed it has been categorically stated that no proceedings under Section 110 of the Act have been undertaken "as there was no stock of goods with the Petitioners firms.

12. On the contrary, the learned counsel for the Petitioners has referred to a number of decisions, including Khaja Mustafa Kamal v. Union of India, (2016) 337 ELT 221 (Bom), Rajendra Vitthal Shinde v. Union of India, (2016) 332 ELT 699(Bom) and Laxman Overseas v. Union of India, (2010) 252 ELT 512 (Del) where a similar freezing of bank account has been held to be illegal. The decision of this Court in Laxman Overseas v. Union of India (supra) has been followed in Multitek Engineers v. Union of India, (2013) 287 ELT 44 (Kar) where the bank accounts were asked to be de- frozen.

13. Learned counsel for the Respondents has referred to another decision dated 16th March, 2017 passed in W.P.(C) No.12251/2016 (Lal Mahal Ltd. v. Union of India) where while ordering the de-freezing of the bank account, the Court required the Petitioner to furnish a bank guarantee. It is accordingly submitted that in this case also, the Petitioners may be asked to furnish some security for de-freezing the bank account.

14. The Court is unable to accept the above submission of the Respondents. Without there being any authority in law to justify the freezing of the bank accounts, requiring the Petitioners to furnish security for de-freezing such bank accounts would be unjustified. It is always open to the DRI to conclude the investigation and issue a SCN in accordance with law. Statutory authorities have to exercise their powers strictly according to the Act under which they function. In Khaja Mustafa Kamal v. Union of India (supra), in similar circumstances, it was observed as under:

"19 Once there are allegations of fraud the Revenue has a larger responsibility and duly to the public. It cannot refuse to take all steps and rest only on freezing of bank accounts of the alleged defaulters. That such an act and which is to be found traceable to different powers and of the nature conferred in the Customs Act, 1962, will not permit the respondents to deprive parties like the petitioner of their source of livelihood. They cannot stop their business by continued freezing of their bank accounts. It is further very clear and requires no reiteration that what is prohibited directly cannot be achieved indirectly or in an oblique manner. A refusal to carry out a duty in accordance with law cannot be justified by such a continued attachment and freezing of the bank accounts. In the given facts and circumstances, we do not see any justification for the same.""

4. Further reliance was placed on the case of Khaja Mustafa Kamal vs. Union of India, (2016) 337 ELT 221 (Bom.), wherein it was held as under:-

"15. If this letter is addressed on 11th September, 2015 and the petitioner is applying from