Patna High Court
Hanumalmal Surana vs The Union Of India on 24 February, 2025
Author: Rajeev Ranjan Prasad
Bench: Rajeev Ranjan Prasad
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.7085 of 2022
======================================================
Jayesh Agarwal, Son of Sri Sawan Kumar Agarwal, Proprietor of M/s
Dadrewa Tea House, Resident of Nehru Road, Khalpara Siliguri, Siliguri
Bazar, District- Darjeeling Pin- 734005 (West Bengal).
... ... Petitioner
Versus
1. The Union of India through the Chief Commissioner of Customs
(Preventive), 5th Floor, Central Revenue Building, Birchand Patel Path,
Patna.
2. The Commissioner of Customs (Preventive), Head Quarters, 5th Floor,
Central Revenue Building, Birchand Patel Path, Patna.
3. The Joint/Additional Commissioner cum Adjudicating Authority, Office of
the Commissioner of Customs (Preventive), Head Quarters, 5th Floor,
Central Revenue Building, Birchand Patel Path, Patna.
4. The Assistant Commissioner, Customs (Preventive) Head Quarters, 5th
Floor, Central Revenue Building, Birchand Patel Path, Patna.
5. The Superintendent of Customs/Seizing Officer, Kishanganj, Near Ruidhasa
Maidan, District- Kishanganj.
6. The Joint Commissioner of Customs (Preventive) Head Quarters, 5th Floor,
Central Revenue Building, Birchand Patel Path, Patna- 800001.
... ... Respondents
======================================================
with
Civil Writ Jurisdiction Case No. 7069 of 2022
======================================================
Hanumalmal Surana @ Hanuman Mal Surana, Son of Sri Mool Chand Surana
Proprietor of M/s M.H. Trading, Resident of Pipali Chowk, Nokha Gaon,
Bikaner, Nokha Village, Rajasthan.
... ... Petitioner
Versus
1. The Union of India through the Chief Commissioner of Customs
(Preventive), 5th Floor, Central Revenue Building, Birchand Patel Path,
Patna.
2. The Commissioner of Customs (Preventive), Head Quarters, 5th Floor,
Central Revenue Building, Birchand Patel Path, Patna.
3. The Additional Commissioner cum Adjudicating Authority, Office of the
Commissioner of Customs (Preventive) Head Quarters, 5th Floor, Central
Revenue Building, Birchand Patel Path, Patna.
4. The Superintendent of Customs/Seizing Officer, Forbesganj, Goriyare
Chowk, Forbesganj, District- Araria (Bihar).
5. The Joint Commissioner of Customs (Preventive) Head Quarters, 5th Floor,
Central Revenue Building, Birchand Patel Path, Patna- 800001.
... ... Respondents
Patna High Court CWJC No.7085 of 2022 dt.24-02-2025
2/20
======================================================
Appearance :
(In Civil Writ Jurisdiction Case No. 7085 of 2022)
For the Petitioner/s : Mr. Saket Gupta, Advocate
Mr. Animesh Gupta, Advocate
Mr. Shivam Gupta, Advocate
For the Respondent/s : Mr. K.N. Singh, Sr. Adv (ASG)
Mr. Shivaditya Dhani Sinha, Advocate
(In Civil Writ Jurisdiction Case No. 7069 of 2022)
For the Petitioner/s : Mr. Saket Gupta, Advocate
Mr. Animesh Gupta, Advocate
Mr. Shivam Gupta, Advocate
For the Respondent/s : Mr. K.N. Singh, Sr. Adv (ASG)
Mr. Shivaditya Dhani Sinha, Advocate
======================================================
CORAM: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD
and
HONOURABLE MR. JUSTICE RAMESH CHAND MALVIYA
ORAL JUDGMENT
(Per: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD)
Date : 24-02-2025
Heard Mr. Saket Gupta, learned counsel for the
petitioner(s) and Dr. K.N. Singh, learned Additional Solicitor
General for the Department of Customs in both the writ
applications.
CWJC No. 7085 of 2022
2. This writ application has been preferred seeking the
following reliefs:-
"a) Quashing/Setting Aside of Seizure Memo dated
19.01.2021
issued in respect of the seizure made by the
Intelligence Officers of the Directorate of Revenue
Intelligence and in connection with Unit Case No.
97/KNE/2020-21 (Annexure-04) whereby 21,000
kilograms (Net Weight) of White Peas along with one
truck bearing registration number WB-59B4437 have been
seized for alleged violation of Section 7, 11, 46 and 47 of
Patna High Court CWJC No.7085 of 2022 dt.24-02-2025
3/20
the Customs Act, 1962 read with Section 3(2) of the
Foreign Trade (Development & Regulation) Act, 1992.
b) Direction to respondents to pay compensation for the
intentional spoiling of the whole consignment of 21,000
kg of White Peas amounting to Rs.15,22,500 and
rendering it unmarketable and totally unfit for human
consumption.
c) Direction to respondents to pay exemplary damages for
violation of fundamental rights guaranteed under Article
19 and Article 21 resulting from illegal seizure dated
19.01.2021 and the deliberate spoilage and contamination
of the same by not storing the same in proper storage
facilities or provisionally releasing the same before
spoilage.
d) Cancellation of bond executed of the total value of the
goods and also cancellation of bank guarantee of 40% of
the value of the goods which was provided by the
petitioner for securing the provisional release of goods
since the whole of the goods has already been spoiled.
e) Restraining the respondents from taking any coercive
action against the petitioner in connection with Seizure
Memo dated 19.01.2021.
f) For any ad interim order in terms of prayers above.
g) For any other direction, which your Lordships may
deem fit and proper in the facts and circumstances of the
case.”
Brief Facts of the Case
3. The petitioner is a registered dealer under the Goods
and Services Act, 2017 (hereinafter called ‘the GST Act’ or ‘the
Act of 2017’). It is dealing in tea, pulses, foodgrains etc. and it is
stated that the petitioner is engaged in inter-State/intra-State
supply of the same.
Patna High Court CWJC No.7085 of 2022 dt.24-02-2025
4/20
4. The petitioner claims that he had purchased White
Peas Gota weighing 30,000 kilograms in the name of his
proprietorship firm M/s Dadreya Tea House, from M/s S.R. (India)
Trade, Jaiswal Compound, West Boragaon, Guwahati, Assam vide
Purchase Invoice dated 07.01.2021 amounting to a bill of
Rs.19,20,000/-. A copy of the Invoice dated 07.01.2021 has been
brought on record as Annexure ‘2’ to the writ application.
5. The purchased goods (White Peas Gota) was
transported to the registered office of the petitioner situated at
Nehru Road, Khalpara, Siliguri, West Bengal and out of this,
21,000 kilograms of peas packed in 420 bags was sold to M/s K.L.
Pulses Centre, 19 Kirti Basu Mukherjee Road, Kolkata under the
Invoice No. SALE/088/20-21 dated 18.01.2021. A copy of this
invoice has also been enclosed as Annexure ‘3’ to the writ
application.
6. In the aforementioned background the consignment of
peas headed to M/s K.L. Pulses Centre, Kolkata in a truck with
valid documents and bills but while passing through Kishanganj
on 19.01.2021 at around 11 O’clock, the said truck was intercepted
by the Officers of the Customs Division, Kishanganj Circle in the
name of documents verification. The entire documents were
presented to the Officials of the Customs Division Kishanganj
Patna High Court CWJC No.7085 of 2022 dt.24-02-2025
5/20
Circle. It is stated that without verifying the same, the respondent
no. 4 straightaway exercised powers under Section 110 of the
Customs Act, 1962 (hereinafter referred to as ‘the Act of 1962’)
and seized the goods and the truck vide Seizure Memo dated
19.01.2021 for alleged violation of Sections 7, 11, 46 and 47 of the
Act of 1962 read with Section 3(2) of the Foreign Trade
Development & Regulation Act, 1992 and registered the Unit Case
No. 97/KNE/2020-21 dated 19.01.2021. A copy of the Seizure
Memo arising out of the said Unit Case has been enclosed as
Annexure ‘4’ to the writ application.
Provisional Release of seized goods/vehicle
7. From the averments made in the writ application, it
appears that the petitioner made representation for provisional
release of the White Peas which according to the petitioner were in
the nature of highly perishable goods. On 08.03.2021, the
respondent no. 5 was pleased to pass an order of provisional
release of the seized vehicle valued at Rs. 25 lakhs on an onerous
condition of execution of bond for total value of the vehicle but
there was no communication with regard to the release of the
white peas, therefore, once again the petitioner sent a reminder
letter dated 09.03.2021 for release of the seized peas. By this time,
the formalities of recording of statements had also been completed.
Patna High Court CWJC No.7085 of 2022 dt.24-02-2025
6/20
8. It is the case of the petitioner that after his reminder
letter dated 09.03.2021, respondent no. 3 came out with a
corrigendum dated 25.03.2021 by which he was pleased to pass an
order of provisional release of the seized peas valued at
Rs.15,22,500/- on an onerous condition of execution of bond for
total value of the peas and cash security/bank guarantee of 40 % of
the seizure value of the goods. The provisional release orders have
also been brought on record.
CWJC No. 7069 of 2022
9. This writ application has been preferred seeking the
following reliefs:-
“a) Quashing/Setting Aside of Seizure Memo dated
08.06.2021 in respect of the seizure made by the Inspector
of the Preventive team of Customs (Prev.) Division,
Forbesganj in connection with Unit Case No.
68/FBG/2020-21 (Annexure-04) whereby 24,500
kilograms (Net Weight) of Areca Nuts along with 28 pcs
of Saree, 31 pcs of Gamchha, 50 metres of Cloth and One
truck bearing registration number RJ-19GB/6843 have
been seized for alleged violation of Section 7, 11, 46 and
47 of the Customs Act, 1962 read with Section 3(2) of the
Foreign Trade (Development & Regulation) Act, 1992 and
notifications/orders issued thereunder.
b) Quash the provisional release order on the basis of
which the goods (and truck) have been released after
having executed a bond of the full value of the goods and
also having submitted a bank guarantee of 30 % of the
value of goods.
Patna High Court CWJC No.7085 of 2022 dt.24-02-2025
7/20
c) Make the release order absolute and cancel the bond
executed for the full value of the goods as well as cancel
the bank guarantee of 30% of the value of the goods.
d) Restraining the respondents from taking any coercive
action against the petitioner in connection with Seizure
Memo dated 08.06.2021
e) For any ad interim order in terms of prayers above.
f) For any other direction, which your Lordships may
deem fit and proper in the facts and circumstances of the
case.”
Brief Facts of the Case
10. The petitioner is a registered entity under the GST
Act. It is dealing in procuring, selling and transporting of areca
nuts.
11. The petitioner claims that he had purchased
Assamese Local Dried Areca Nuts weighing 24,500 kilograms in
the name of his proprietorship firm M/s M.H. Trading Co. from
farmers and small traders of the local market. The petitioner claims
that the dried Assamese areca nuts being local agricultural produce
were purchased in loose form without any invoice and without any
applicable GST.
12. The purchased goods (Dried Assamese Areca Nuts)
weighing 24,500 kilograms was sold to M/s Shri Radhey Shiva
Enterprises at the rate of Rs.200/- per Kg with applicable GST
Patna High Court CWJC No.7085 of 2022 dt.24-02-2025
8/20
under the Invoice No. 21 dated 06.06.2021. A copy of this invoice
has been enclosed as Annexure ‘2’ to the writ application.
13. In the aforementioned background, the consignment
of Assamese Local Dried Areca Nuts was being transported in the
truck to the consignee M/s Shri Radhey Shiva Enterprises at New
Lane Gangashahar, Bikaner, Rajasthan with requisite documents
i.e. Invoice and E-way Bill generated by M/s M.H. Trading and a
consignment note issued by M/s Ajay Goods Carrier (Transporter).
A copy of the E-way Bill has been enclosed as Annexure ‘3’.
14. It is stated that while passing through Galgalia
Check Post on 07.06.2021 at around 11:30 hours, the said truck
was intercepted by the Officers of Galgalia Police Station in the
name of documents verification. The entire documents were
presented to the Officers of the Galgalia Police Station but despite
presenting all the valid documents, the police officers detained the
vehicle on the ground that the goods are suspected to have been
smuggled from a third country and informed the Officers of
Customs Preventive Division, Forbesganj. It is stated that without
verifying the same, respondent no. 4 exercised powers under
Section 110 of the Act of 1962 and seized the goods and the truck
vide Seizure Memo dated 08.06.2021 (Annexure ‘4’) for alleged
violation of Sections 7, 11, 46 and 47 of the Act of 1962 and
Patna High Court CWJC No.7085 of 2022 dt.24-02-2025
9/20
violation of provision of notification(s) issued under Section 11 of
the Act of 1962 read with Section 3(2) of the Foreign Trade
Development & Regulation Act, 1992 and registered the Unit Case
No. 68/FBG/2020-21 dated 08.06.2021. A copy of the Seizure
Memo arising out of the said Unit Case has been enclosed as
Annexure ‘4’ to the writ application.
Provisional Release of seized goods/vehicle
15. From the averments made in the writ application, it
appears that the petitioner made representation for provisional
release of the dried areca nuts. On 02.11.2021, the Joint
Commissioner, Customs (Prev.), Patna (respondent no. 5) was
pleased to pass an order of provisional release of seized goods
Dried Areca Nuts weighing 24,500/- kg valued at Rs.84,52,500/-
to its legal owner on execution of bond for full seizure value of the
seized vehicle and a cash security/bank guarantee of 30% of the
seizure value of the subject goods. The petitioner appeared in
Division Office on 22.11.2021 and submitted bond/bank guarantee
for release of the goods. Accordingly, the goods were released on
22.11.2021.
Submissions on behalf of the Petitioner(s)
16. The petitioner(s) claims that the seizure of goods
vide Annexure ‘4’ to both the writ applications on 19.01.2021 and
Patna High Court CWJC No.7085 of 2022 dt.24-02-2025
10/20
08.06.2021 respectively had no basis and the mandatory
requirements of sub-Section (1) of Section 110 of the Act of 1962
has not been taken care of by the Seizing Officer. It is pointed out
that the seizure memo does not contain ‘reason to believe’ that the
goods in question are liable to confiscation under the Act of 1962.
17. It is submitted that words ‘reasons to believe’ has
been subject matter of discussions in a number of judicial
pronouncements and this Court having discussed this issue in
detail has taken a view in the case of Assam Supari Traders,
through its Authorized Representative Cum Power of Attorney
Holder Anil Kumar Yadav Vs. Union of India through the
Secretary, Ministry of Finance, Department of Revenue and
Others reported in 2024 SCC OnLine Pat 6401 and Krishna
Kali Traders and Another Vs. Union of India and Others
reported in 2024 SCC OnLine Pat 880 that mere mentioning of
the Sections of the Act of 1962 in the seizure memo would not
satisfy the requirements of showing ‘reason to believe’ as
envisaged under sub-Section (1) of Section 110 of the Act of 1962.
Similarly, this Court has held that punchnama cannot be read into
seizure memo.
18. Learned counsel has placed before this Court a
recent judgment of this Court in the case of M/s Ashoke Das and
Patna High Court CWJC No.7085 of 2022 dt.24-02-2025
11/20
Anr. vs. Union of India and Others (CWJC No. 4918 of 2021)
decided on 19.02.2025 in which this Court has recorded its
agreement with the view taken by the learned Co-ordinate Bench
in the case of Assam Supari Traders (supra) and Krishna Kali
Traders (supra).
19. By filing interlocutory application in both the writ
applications, seeking amendment of the writ application(s), the
petitioner(s) has not only impleaded the Joint Commissioner of
Customs (Preventive) as respondent no. 5 in the writ application(s)
but have also brought to the notice of this Court that show cause
notice dated 13.07.2021 and 07.12.2021 having Reference No.
168/FBG/21-22 and Reference No. 392/FBG/21-22 respectively
have been issued against the petitioner(s) and in the notice, the
petitioner(s) have been directed to appear before respondent no. 5.
The petitioner(s) have, however, not sought quashing of the show
cause notice or the proceeding registered by the respondent who
had proceeded to adjudicate the confiscation proceeding. The
petitioner(s) prayed for the stay of the confiscation proceeding by
way of an interim order and this Court has been pleased to direct
vide order dated 21.06.2022 that “in the meanwhile, proceeding
shall continue but no final action shall be taken without the leave
of the Court.”
Patna High Court CWJC No.7085 of 2022 dt.24-02-2025
12/20
20. Learned counsel for the petitioner(s) submits that the
case of the petitioner would be covered by the judgments of this
Court in the case of Assam Supari Traders (supra), Krishna Kali
Traders (supra) and M/s Ashoke Das (supra). It is his submission
that once the seizure memo is held invalid and the same is quashed
by this Court, the respondents cannot continue with further
proceeding towards confiscation of the goods.
Submissions on behalf of the Department
21. Dr. K.N. Singh, learned Additional Solicitor General
representing the Department of Customs submits that in view of
the judgments in the case of Assam Supari Traders (supra),
Krishna Kali Traders (supra) and M/s Ashoke Das (supra), even
as the seizure memo (Annexure ‘4’) may be liable to be held
invalid and bad in law for not recording ‘reason to believe’, but it
would not result in automatic quashing of the entire confiscation
proceeding.
22. Learned ASG has drawn our attention towards the
order of the Hon’ble Supreme Court in SLP(s) No. 11124 of 2021
and other analogous matters (Union of India & Ors. versus M/S
Om Sai Trading Company & Anr. reported in 2022 SCC
OnLine SC 1419)in which while granting leave, the Hon’ble
Supreme Court clarified that the quashing of the seizure memo
Patna High Court CWJC No.7085 of 2022 dt.24-02-2025
13/20
does not mean the appellant cannot investigate and proceed in
accordance with law under the provisions of the Act of 1962.
23. It is submitted that this Court while deciding M/s
Ashoke Das (supra) has incorporated in paragraph ’40’ of its
judgment, the order of the Hon’ble Supreme Court in SLP(s) No.
11124 of 2021 and other analogous matters and having noticed the
same, this Court observed that the principle of ‘merger’ will apply,
In the said case, this Court, though, quashed the seizure memo but
did not interfere with the show cause notice and left it open to the
parties to argue before the competent authority all questions
arising out of issuance of show cause notice. It is, thus, submitted
that a similar view may be taken by this Court in the present case
also. Learned ASG points out that in these cases, in fact, the show
cause notice(s) and the confiscation proceeding(s) have not been
challenged.
Consideration
24. We have heard learned counsel for the petitioner(s)
and learned ASG for the Department of Customs. Before we
proceed to take a view in the matter, it would be appropriate to
reproduce the Seizure Memo dated 19.01.2021 and 08.06.2021
which are subject matter of challenge in the present writ
applications as under:-
Patna High Court CWJC No.7085 of 2022 dt.24-02-2025
14/20“GOVERNMENT OF INDIA
OFFICE OF THE SUPERINTENDENT, CUSTOMS (P) CIRCLE-
KISHANGANJ,
NEAR RUIDHASA MAIDAN, DIST-KISHANGANJ, BIHAR-855107
Phone No. : 06456295430, [email protected]SEIZURE MEMO
Unit Case No. 97/KNE/2020-21 Circle : Kishanganj Date : 19.01.2021
1. Import / Export Illegal Import
2. Claimed / Unclaimed Claimed
3. Date, Time & place of 11:00 Hrs, 19.01.2021 at Customs
detention/Seizure Office Kishanganj
4. Name & Address of the Ramjan Ali, S/o – Saheb, SK, R/o – Vill
person(s) From whom goods – Azmatpur, Sahebnagar, PO – Sabaspur,
recovered: PS.-Bhagwangola, Dist – Murshidabad,
WB-742135 (Driver of Truck No.
WB59B 4437).
5. Reasons for Seizure : Violation of Section 7, 11, 46 & 47 of the
Customs Act, 1962 read with Section 3(2) of the Foreign Trade
(Development & Regulation) Act, 1992.
SN Description of Goods Origin Quantity Rate/ Unit Price Total Value (in
(in Rs.) Rs.)
01 Foreign Origin ‘Peas’ Foreign 420 Bags × 72.50/Kgs 15,22,500/-
50 Kg =
21,000 Kg
02 Truck Regn. No. India 01 Nos. 25,00,000/- 25,00,000/-
WB59B4437, Chesis
No.
MB1KACFD8GPES8
445, Engine No.
GEPZ108346
Total 40,22,500/-
(Rupees Forty Lakh Twenty Two Thousand Five Hundred Only)
6. Remarks/Any relevant information :
Received a copy
(Rajan Ali 19.01.2021)
Signature of owner with date
Sd/-
19.01.2021
(Prashant Prakhar)
Superintendent of Customs / Seizing Officer
Kishanganj Circle Office
Witness
1. Subhash Choudhary
2. Raju Sah”
Patna High Court CWJC No.7085 of 2022 dt.24-02-2025
15/20“SEIZURE MEMO Dated 08.06.2021
1. Illegal Import / Export Illegal Import
2. Claimed / Unclaimed Claimed
3. Name & Address of the Shri Shanwar Mal, S/o Shri Mangi Lal,
persons From Whom (Driver of Truck No. RJ-19GB-6843,
detained or seized: Vill. Tal, Thashil Devgarh, PS+PO
Devgarh, Distt. Rajsamand
(Rajasthan) 313331.
4. Date & Time of Seizure 08.06.2021 at 17:00 Hrs
5. Place of Seizure Detained at Galgalia PS Check Post Dist.
Kishanganj and seized at the office of the
Assistant Commissioner, Customs (P)
Division, Forbesganj.
6. Reasons for detention or Seizure : Violation of Sections 7, 11, 46 and
47 of the Customs Act, 1962 and violation of provision of
notification(s) issued under Section 11 of the Customs Act, 1962 read
with Section 3(2) of the Foreign Trade (Development and Regulation
Act), 1992 and Notifications, order etc. issued thereunder.
7. Particulars of the seized/detained goods
SN Description of Country of Quantity in Value per Kg/ Total Value (in
Goods seized Origin Kgs. per pc. (in Rs.) Rs.)
1 Dried Areca Suspected 24500.00 Kgs 345/- Per Kgs 84,52,500/-
Nuts (Flattened to be of (packed in 490 (as per
round shape, Third Jute Bags) Notification No.
dried & dark Country 49/2021
Brown in Origin CUSTOMS
colour) (NT) dated
31.05.2021
2 Saree Bangladesh 28 Pcs 500.00 14,000/-
3. Gamchha Bangladesh 31 Pcs 50.00 1,550/-
(Cotton Towel)
4. Cloths Bangladesh 50 Meters 50,00 2,500/-
7.1 Particulars of the Seized Vehicle
SN Vehicle type & Registration No. Value as per Insurance
Document (in Rs.)
1 Truck (Open Body) (old & used) Registration No. 10,04,062/- (as per insurance
RJ19GB/6843 Engine No. CBTAA5990L6281 declared value)
1698 Chassis No. MAT46637292NJ9894
Patna High Court CWJC No.7085 of 2022 dt.24-02-2025
16/20
7.2 Total Value of Seized goods and vehicle – Rs.94,74,612/- (Rs.
Ninety Four Lakh Seventy Four Thousand Six Hundred Twelve)
Received a copy
Sd/-
Signature of Truck driver
Sd/-
(Baij Nath Prasad)
Inspector/S.O., Customs (P), Forbesgaj
Signature of Witnesses with Address
1. Sd/-
(Sumit Ranjan)
Shri Sumit Ranjan, S/o Shri Anil Das, Age-about 29 years, At-
Bhagkohaliya, Ward No. 07, P.O.-Forbesganj, P.S.-Forbesganj, Distt-Araria
(Bihar)-854318.
2. Sd/-
(Pappu Sah)
Shri Pappu, S/o Jivachh Lal Sah, Age-about 33 years, R/o At Godiyare
Chowk, Ward No. 18, P.O.-Forbesganj, P.S.-Forbesganj, Distt-Araria
(Bihar)-854318.”
25. We would also take note of sub-Section (1) of
Section 110 of the Act of 1962 hereinbelow:-
“110. Seizure of goods, documents and things.-(1) If the
proper officer has reason to believe that any goods are liable
to confiscation under this Act, he may seize such goods:
1[Provided that where it is not practicable to remove,
transport, store or take physical possession of the seized
goods for any reason, the proper officer may give custody of
the seized goods to the owner of the goods or the beneficial
owner or any person holding himself out to be the importer, or
any other person from whose custody such goods have been
seized, on execution of an undertaking by such person that he
shall not remove, part with, or otherwise deal with the goods
except with the previous permission of such officer:
Provided further that where it is not practicable to seize any
such goods, the proper officer may serve an order on the
owner of the goods or the beneficial owner or any person
holding himself out to be importer, or any other person from
whose custody such goods have been found, directing that
such person shall not remove, part with, or otherwise deal
with such goods except with the previous permission of such
officer.]”
1. Subs. by Act 23 of 2019, S.74(i), for proviso. Prior to its substitution, proviso read as under:-
“Provided that where it is not practicable to seize any such goods, the proper officer may serve on the
owner of the goods an order that he shall not remove, part with, or otherwise deal with the goods except
with the previous permission of such officer.”
Patna High Court CWJC No.7085 of 2022 dt.24-02-2025
17/20
26. It is evident on a bare reading of the aforementioned
provision that before seizing the goods, the seizing
official/appropriate official has to form ‘reason to believe’ that the
goods are liable to confiscation under the Act of 1962.
27. The words ‘reason to believe’ had been subject
matter of discussions in the catena of judgments and the same has
also been considered by this Court in the case of Assam Supari
Traders (supra) and Krishna Kali Traders (supra). This Court
has categorically held that the words ‘reason to believe’ must
reflect in the seizure memo. In the case of Assam Supari Traders
(supra), the reasons for seizure were recorded exactly in the same
manner and words in which the seizure Memos of the present
cases mention. This Court held that what has been assigned as
reason for seizure is that there are violation of the statutory
provisions but in what manner the violation has taken place is not
forthcoming in the seizure memo. This Court, prima facie, found
that the factual aspects of the matter read with documents relating
to purchase of goods and its transportation that the traders are
registered and that they are fulfilling all the criteria are such that
prima facie none of the cited provisions would be attracted.
28. In these two writ applications, this Court has gone
through the note of the invoice, memo and other documents which
Patna High Court CWJC No.7085 of 2022 dt.24-02-2025
18/20
have been brought on record by the petitioner(s) as Annexures to
the writ application. It is not denied that during the inquiry the
driver had produced at least the invoice bearing No. SALE/088/20-
21 dated 18.01.2021 (in CWJC No. 7085 of 2022) and Invoice No.
21 dated 06.06.2021 (in CWJC No. 7069 of 2022). The seizure
memo (Annexure ‘4’ in both writ applications), however, does not
indicate ‘reason to believe’. Taking note of the views expressed by
this Court in the identical matters of Assam Supari Traders
(supra), Krishna Kali Traders (supra) and M/s Ashoke Das
(supra), this Court is of the considered opinion that the seizure
memo as contained in Annexure ‘4’ in both writ applications
would not satisfy the test of law and it is liable to be held suffering
from legal infirmities. We, therefore, quash the seizure memo
dated 19.01.2021 and 08.06.2021 (Annexure ‘4’ in both writ
applications).
29. The submission of learned counsel for the
petitioner(s) that once the seizure memo goes and it stands
quashed by this Court, the show cause notice would automatically
lose its significance seems to be an argument which has been taken
before this Court without there being adequate pleading. The fact
remains that the petitioner has not challenged the show cause
notice and the confiscation proceeding.
Patna High Court CWJC No.7085 of 2022 dt.24-02-2025
19/20
30. At this stage, we would once again take note of the
views expressed by the Hon’ble Supreme Court in SLP(s) No.
11124 of 2021 and other analogous matters (supra) in which the
Union of India had moved for setting aside the judgments/orders
of the Hon’ble Division Bench of this Court in Om Sai Trading
Company & Anr. Versus Union of India & Ors. reported in
2019 SCC Online Pat 2262 and other cases of like nature in
which this Court had been pleased to quash the seizure memo(s).
while disposing of the SLP(s), the Hon’ble Supreme Court passed
the following orders on 15th September, 2022:-
” 1. Leave Granted.
2. Having heard learned counsel for the parties, in
view of the facts of the present case, and as the goods have
already been released, we are not inclined to interfere with
the decision of the High Court quashing the seizure memo.
However, we clarify that the quashing of the seizure memo
does not mean the appellants cannot investigate, and
proceed in accordance with law under the provisions of
the Customs Act, 1962. ….”
31. In the case of M/s Ashoke Das (supra), we have held
that the order of the Hon’ble Supreme Court has been passed after
granting leave against the Division Bench judgments of this Court
and the effect of the order of the Hon’ble Supreme Court may be
clearly seen. The Principle of ‘merger’ will apply. Despite
quashing of the seizure memo, it cannot be said that the
Department of Customs cannot investigate and proceed in
accordance with law under the provisions of the Act of 1962.
Patna High Court CWJC No.7085 of 2022 dt.24-02-2025
20/20
32. Keeping in view the aforementioned order of the
Hon’ble Supreme Court, we refrain from entering into the
submissions of learned counsel for the petitioner raised at this
stage without adequate pleading and leave it open to be canvased
before the Adjudicating Authority.
33. All contentions are left open.
34. Both the writ applications stand allowed to the
extent indicated hereinabove.
35. The Adjudicating Authority/Confiscating Authority,
as the case may be, shall give a personal hearing to the
petitioner(s) through his counsel within six weeks from today. It
will be open to the petitioner(s) to appear before the
aforementioned authority through his lawyer within the same
period.
(Rajeev Ranjan Prasad, J)
( Ramesh Chand Malviya, J)
SUSHMA2/-
AFR/NAFR CAV DATE Uploading Date 01.03.2025 Transmission Date
[ad_1]
Source link