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2025 Supreme(Online)(Guj) 8495
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
BHARGAV D. KARIA, PRANAV TRIVEDI, JJ
RAJESHKUMAR AMRATBHAI PATEL – Appellant
Versus
UNION OF INDIA & ORS. – Respondent
R/SPECIAL CIVIL APPLICATION NO. 11171 of 2025
For the Petitioner(s): AADITYA D BHATT
For the Respondents: MR PRADIP D BHATE, MS. KETKI P JHA
Administrative bodies must provide clear justifications for financial penalties or bonds imposed, ensuring adherence to procedural fairness.
Headnote:(A) Constitution of India - Articles 226 and 227 - Provisional release of seized goods - The order dated 30.05.2025 permitted the release of a vehicle on condition of executing a bond without providing factual basis for the bond amount; impugned order is quashed and remanded for issuing a new order with adequate reasoning. (Paras 3.12, 4)
(B) Customs Act, 1962 - Sections 110 and 110A - Provisional release - Guidelines provided under CBIC Circular No. 35/2017 emphasize the need for assigning reasons for the amount set for bonds and guarantees; non-compliance with this can lead to a quash of orders by the court. (Paras 3.12, 4)
Facts of the case:
The petitioner imported a Toyota Land Cruiser and was later informed about a search and seizure by the Directorate of Revenue Intelligence, leading to restrictions on the vehicle's release upon payment conditions not adequately justified by the authorities.
Findings of Court:
The court determined that the respondent did not provide sufficient reasoning for the bond and guarantee amounts, failing to comply with established procedural rules, thus necessitating a revisitation of the matter.
Issues: The main issues involved the justification for the bond and guarantee amounts imposed by the customs authority and whether procedural fairness was afforded in issuing these amounts.
Ratio Decidendi: The court held that administrative bodies must provide clear reasoning for their decisions, particularly in financial matters affecting individuals, and failing to do so may result in judicial review and potential quashing of such orders.
Result: The impugned order is quashed and remanded for reconsideration.
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)
1 Heard learned advocate Mr.Aaditya Bhatt for the petitioner and learned advocate Ms.Ketki Jha for the respondent.
2 By this petition under Articles 226 and 227 of the Constitution of India, the petitioner has prayed for quashing and setting aside the order dated 30.05.2025, whereby, the respondent – Commissioner of Customs (NS-V, JNCH), has permitted the provisional release by directing the petitioner to execute a bond of Rs.2,20,00,000/- with an undertaking that petitioner shall pay the duty, fine and penalty as may be adjudged by the adjudicating authority subject to the appellate provisions and further execute a bank guarantee of Rs.5 crore to cover the potential penalty under Sec.112(a) / 114A, 114AA and redemption fine under Sec.125 of the Customs Act, 1962 (for short ‘the Act’).
3 The brief facts of the case are as under:
3.1 The petitioner imported a new Toyota Land Cruiser LC300 Sahara from Dubai, UAE. The petitioner purchased the said vehicle in an arm’s length transaction for the total price of USD 54,000/- (approximately Rs.45.36 lakhs) from a seller, namely, Toyota Motors Corporation based in Japan through an agent AL Noor Motors FZCO based in Dubai, UAE, with a valid commercial invoice dated 02.09.2024.
3.2 The petitioner, thereafter, made a total payment of USD 54,000 through a valid and lawful channel under the import advance remittance mechanism, in two separate tranches – firstly, an amount of USD 10,800/- on 05.09.2024 and thereafter, USD 43,200/-
on 12.09.2024.
3.3 It is a case of the petitioner that Bill of Lading bearing No. HLCUDX3240926641 was filed on 26.09.2024, and thereafter, Bill of Entry bearing No.5954550 dated 04.10.2024 was filed declaring the transaction value with the Custom Authority upon importation of the vehicle at Nhava Sheva Port.
3.4 The petitioner, thereafter, paid the custom duty amounting to Rs.98,59,182/- on 11.10.2024 and Custom authorities issued an Out of Charge Order (OOC) dated 11.10.2024, thereby permitting the clearance of the imported vehicle from Customs.
3.5 It is the case of the petitioner that after the clearance of the vehicle by the Custom Authorities, the same was registered with Gandhinagar R.T.O with registration No. GJ-18-ED-9609 on 11.11.2024. However, subsequently, the officers of the respondent No.2, Directorate of Revenue Intelligence (hereinafter referred to as ‘the DRI’), reached the premises of the petitioner and further informed that they have search warrant having DIN No.
202503DDZ1000027432F.
3.6 It appears that on 16.01.2025, DRI issued first summons under Sec.108 of the Customs Act, 1962 , to the petitioner which was not properly served at the known address of the petitioner, and thereafter, on 06.02.2025, second summon was issued and subsequently on 10.02.2025 third summon was issued to the petitioner directing to tender his statement pertaining to the import of the vehicle.
3.7 Thereafter, the Seizure Memo was issued on 20.03.2025 and fourth Summon was served on the petitioner on 25.03.2025, requiring him to record his statement in continuation of the proceedings. The petitioner submitted the response by E-mail dated 07.02.2025 to the DRI citing unavoidable circumstances that prevented his appearance and submission of requisite documents followed by another E-mail on 18.02.2025 stating that his health condition rendered him unable to attend or produce the documents called for by the respondent No.2.
3.8 The respondent No.2, thereafter, drew a Panchnama on 20.03.2025 and recorded that the CIF value declared at Dubai Customs was 330,000 AED. It is the case of the petitioner that on 20.03.2025, the DRI, without any intimation seized the vehicle under Sec.110(1) of the Act, on the ground that the value of the imported vehicle is misdeclared though the value of the vehicle was Rs.2,20,00,000/-
3.9 The petitioner, thereafter, made an application for provisional release of the vehicle under Sec.110A of the Act, seeki
