Delhi High Court directs Refund for Confiscated Gold Due to Customs Department's Inaction [Read Order]

The Delhi High Court has directed the Customs Department to pass a refund order within one month in favour of the petitioner whose confiscated gold was disposed of without proper intimation. The Court passed this order while disposing of a writ petition filed by Sajad Ahmed Kak, who sought the return or refund of the value of three gold bars weighing 457.95 grams, confiscated from him over a decade ago.

Sajad Ahmed Kak had travelled from Bangkok to Delhi on 10th March, 2014, carrying the gold bars, which were seized by customs officials at IGI Airport, Terminal 3. Following the seizure, a show cause notice was issued, and by an order dated 30th January, 2015, the Adjudicating Authority directed absolute confiscation of the gold under various provisions of the Customs Act, 1962, along with a penalty of Rs.4 lakhs.

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On appeal, however, the Commissioner (Appeals) allowed redemption of the confiscated goods upon payment of a fine of Rs.3,50,000 and the applicable customs duties. The Adjudicating Authority was directed to communicate the specific duty amount within 15 days. Despite the petitioner’s efforts, including letters dated 30th May and 8th August, 2016, the duty amount was not conveyed. The petitioner alleged that the gold was later disposed of without any prior notice.

A subsequent refund application was rejected by the Assistant Commissioner (Refund), but the rejection was overturned on appeal, with the matter remanded back for fresh consideration by order dated 17th June, 2020. Despite this, no order was passed by the Adjudicating Authority, and the petitioner’s further letters in 2022 and 2024 also went unanswered.

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Noting the ten-year delay and inaction on the part of the Customs Department, the Court observed that the authorities had failed to implement the Commissioner (Appeals)' order, determine the applicable duty, and facilitate redemption. The Court further noted the disposal of gold without intimation to the petitioner, terming it potentially contrary to law.

Given the rise in gold prices and the prolonged inaction, the Division Bench of Justice Prathiba M. Singh and Justice Manoj Jain directed the Adjudicating Authority to examine whether any notice was given to the petitioner prior to disposal, ascertain the amount recovered from the disposal, and determine if any interest is payable in law. The refund order is to be passed within one month from the date of the judgment. The petition was accordingly disposed of with liberty to the petitioner to seek revival if the directions are not complied with.

To Read the full text of the Order CLICK HERE

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