The Bombay High Court has held that Customs Officers have no power to sell seized gold without following provisions under section 110 of the Customs Act, 1962.
On 14 January 2018, they arrived at Chhatrapati Shivaji Maharaj International Airport, Mumbai by the Oman Air Flight. The petitioners were wearing gold ornaments (bangles) having a net weight of 1028 grams. They were intercepted by the Customs officials at Mumbai Airport and the gold bangles (‘the gold jewellery’) worn by them, were seized by the Customs officials.
The disposal of the gold jewellery which had taken place on 1 August 2018, as informed by the State Bank of India, the petitioners were never put to any notice whatsoever, much less, in a manner the law would mandate that the petitioners’ gold jewellery as seized was disposed of / sold.
The respondents have filed two reply affidavits. The first reply affidavit is of Mr G. B. Tilve, Assistant Commissioner of Customs, which does not dispute that the petitioners were carrying the gold jewellery in question, when they reached Mumbai Airport by Oman Air Flight, on 14 January 2018.
It was stated in the affidavit that Notification No.31 of 86 dated 05 February 1986 as amended from time to time, issued under Section 110(1A) of the Customs Act authorizes the Central Government, to issue a notification for disposal of gold on considerations as provided in subsection (1A), namely having regard to the perishable, hazardous nature of any goods, depreciation in the value of goods with time, constraints of storage space for the goods or any other relevant considerations, as soon as, maybe after its seizure, by following the procedure prescribed under Section 110(1B) of the Customs Act, 1962.
It was submitted that when the gold jewellery was seized, there was a legal obligation on the part of the respondents to preserve the property of the petitioners and keep the same intact. Also, there was an obligation to take reasonable care of the seized jewellery to enable the respondents to return the gold jewellery to the petitioners, in the same condition in which it was seized.
A division bench comprising Justice G S Kulkarni & Justice Jitendra Jain declared that the action on the part of the Assistant Commissioner of Customs in disposing of selling the gold jewellery belonging to the petitioner’s subject matter of the present proceedings, is illegal and unconstitutional.
The respondents are directed, to restore to the petitioners, an equivalent amount of gold namely 1028 gms. and/or to compensate the petitioners by making payment of amounts equivalent to the market value of the said gold, as of date.
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