IMPORTANT POINT
The freezing of a bank account requires a written order based on tangible material, failing which the action is illegal.

JUDGMENT :

1. Heard.

2. This petition seeks to assail and challenge the legality and validity of the action of the respondents in freezing the bank account of the petitioner.

3. Necessary and relevant facts in brief for deciding the present petition are that the petitioner is a proprietorship firm carrying on the business of Bullion, but is not carrying out any export or import of goods outside India. On 13.03.2024, a search action under Section 110 of The Customs Act, 1962 (for short ‘the Act’) took place at the residential and business premises of the petitioner by the Departmental Officials. A summon, thereafter, came to be issued for making his appearance before Superintendent of Customs (Preventive), Jaipur on 13.03.2024 and 14.03.2024 at the stipulated time. The statements of the petitioner were also recorded under Section 108 of the Act. Again summons were issued to the brother of the petitioner on 15.03.2024 for tendering the statements before the Superintendent of Customs (Preventive) Jaipur on 22.03.2024 under Section 108 of the Act.

4. Thereafter, the petitioner did not receive/or communicate with any order. It is the case of the petitioner that later on, when the petitioner approached his bank for making banking transaction through his bank account held with the Axis Bank, Sanganeri Gate Branch, Jaipur, bank declined the transaction and informed him that his account has been frozen on the instructions issued by the Custom Authorities. Thereafter, on petitioner’s request, the bank vide letter dated 07.05.2024 informed the petitioner regarding freezing of the bank account. A copy of order dated 14.03.2024 addressed to the bank was also provided. Aggrieved by the action of the respondents in freezing the account, the petitioner has approached this Court by filing the instant petition under Article 226 of the Constitution of India.

5. Learned counsel for the petitioner assailed the action of the respondents in freezing his account on submissions primarily based and confined to the provisions contained under Section 110 of the Act alleging statutory violation of the provisions and that the order of the authority was in excess of jurisdiction. Relying upon the decision of the Hon’ble Supreme Court in the case of M/ S Radha Krishan Industries Versus State of Himachal Pradesh & Ors., 2021 (6) SCC 771 and a Division Bench judgment of the Bombay High Court in the case of Chokshi Arvind Jewellers Versus Union of India, 2024 (3) TMI 605, he would submit that firstly, there is no order passed in writing, as mandated under Section 110(5) of the Act regarding satisfaction, as required under the law, before taking impugned action having serious consequences on petitioner’s business transactions due to blocking of his bank account. He would submit that the law required the respondent-authority not only to pass the order in writing, but also to disclose an opinion formed on the basis of tangible material that for the purpose of protecting the interest of revenue or preventing smuggling, it has become necessary to freeze the account. He would submit that the order dated 14.03.2024 addressed to the bank and assailed in this petition, does not fulfill the requirement of law. Therefore, it is submitted that the impugned action of freezing of account is in utter violation of statutory requirement, as specified under Section 110 of the Act.

6. Per contra, learned counsel appearing for respondents-custom department would submit that insofar as exercise of power of freezing at the first instance is concerned, it does not require passing of an order in writing and all that is required is to inform, as envisaged under the law, which has already been done by the authorities in their own records and files and the reasons which compelled the authorities to take the action of freezing the bank account has been spelt out in detail in reply filed by the respondents. He would submit that in the absence of there being any requirement of law to record any o