The Bombay High Court observed that the customs assistant commissioner in selling seized gold jewellery of assessee without reasons is illegal.
This petition under Article 226 of the Constitution of India raises an important issue as to whether the action of the respondents to sell / dispose of the gold jewellery of the ownership of the petitioners, as seized from them, without notice to the petitioners, and before an order of confiscation under Section 111 of the Customs Act, 1962 (‘the Customs Act’) can be said to be legal and valid.
The contention of the petitioners is that the impugned action of the respondents of seizure of petitioners’ gold jewellery and its disposal was patently illegal being in breach of the provisions of not only the Customs Act, but the rights guaranteed to the petitioners under Article 300A read with Article 14 of the Constitution of India.
The Assistant Commissioner initiated proceedings under Section 110(1B) of the Customs Act so as to obtain an order from the Court of Metropolitan Magistrate for the identity of the gold jewellery for disposal of the gold jewellery.
A Division Bench of Justices Jitendra Jain and GS Kulkarni observed that “In the present case, it is difficult to imagine as to what could be the reason for the Customs Officers to dispose of the goods hurriedly and with such lightening speed and by throwing to the wind the norms of fairness and reasonableness. This is not acceptable even from the reading of the provisions of Section 110. Any reading of Section 110 otherwise than what has been discussed above, would amount to foisting draconian, reckless and/or unfettered authority on the Customs Officers conferring a licence to commit illegality.”
“It is declared that the action on the part of the Assistant Commissioner of Customs in disposing of / selling the gold jewellery belonging to the petitioners subject matter of the present proceedings, is illegal and unconstitutional. The respondents are directed, to restore to the petitioners, 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 on date” the Court noted.
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