Delhi High Court dismisses PIL against CBIC circulars requiring compulsory disposal and sale of seized gold to RBI [Read Order]

In a recent case, the Delhi High Court dismissed a public interest litigation filed against the two circulars issued by the Central Board of Indirect Taxes and Customs (CBIC), requiring the mandatory sale and disposal of all confiscated gold to the Reserve Bank of India (RBI) within three months of the date of seizure.

Jatin Khurana, the petitioner, filed the present public interest petition for quashing Circular Instruction No. 22/2022-Customs dated 6th September 2022 and Circular Instruction No. 27/2021-Customs dated 3rd December 2021. It pertains to the extent that it mandates compulsory disposal and sale to the RBI of all gold ornaments/jewelry within three months from the date of seizure as ultra vires Section 150, 125, and 110(2) of the Customs Act, 1962, and violative of Articles 14, 21, 31, and 300A of the Constitution of India.

Vaibhav Mahajan, counsel for the petitioner, states that circular instructions of CBIC are arbitrary and ultra vires the Customs Act, as they fail to differentiate between gold jewelry/ornaments/articles that have design and emotional value from other forms of gold. The petitioner's counsel further argued that the conversion of gold jewelry into gold bars and their consequent sale closes all doors for restitution and causes irreparable loss to the rightful owners.

The court, after observing the arguments of the petitioner, viewed that since it is a well-established legal concept that an affronted party must file a petition with the court, the current petition is not viable. One of the characteristics of standing theory is that the action being challenged must cause harm to the prospective petitioner. This court believes that the petitioner is a stranger who has not been negatively impacted by any of the contested circular instructions because none of his jewelry, accessories, or products have been seized.

Further, the rule of locus standi is relaxed in the case of public interest litigation, but that is to be done only to ensure that the poor or socially and economically backward or persons with disabilities are not denied their rights. In a public interest case, there need be no litigant if a problem is deemed by the court as worthy of attention. Thus, the court is of the view that any individual who owns gold jewelry/ornaments and who travels by air is not economically or socially backward and can approach the courts directly.

After analyzing the facts and arguments of both parties, a division bench of Acting Chief Justice Manmohan and Justice Mini Pushkarna dismissed the public interest litigation filed against the two circulars issued by the Central Board of Indirect Taxes and Customs (CBIC), requiring the mandatory sale and disposal of all confiscated gold to the Reserve Bank of India (RBI) within three months of the date of seizure. Aditya Singla, advocate, appeared for the respondent.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates