Delhi HC Condemns Customs for Unlawful Disposal of Seized Gold: Orders CBIC and Delhi Police Inquiry, Directs Payment of Market Value to Passengers [Read Order]

The Delhi High Court has condemned the Customs Department at Indira Gandhi International (IGI) Airport for the unlawful disposal of passengers’ seized gold jewellery and for depriving them of their property without the authority of law. The Court has directed the Central Board of Indirect Taxes and Customs (CBIC) and the Delhi Police (Economic Offences Wing) to conduct an inquiry and ensure accountability within the department.

The case arose from a writ petition filed by Puja Jayant, her husband, Jayant Shastri, and. Manisha Shastri, who had travelled from Dubai to India to attend a family wedding. Upon their arrival at IGI Airport, the Customs Department detained three gold chains weighing a total of 401 grams.

The petitioners requested that the department not dispose of the jewellery and also sought redemption and re-export of the seized items. However, they were later informed that the jewellery had already been disposed of.

The Commissioner of Customs had ordered confiscation of the gold under Section 111 of the Customs Act, 1962, but permitted redemption upon payment of a fine of ₹2,00,000 for Puja Jayant and Jayant Shastri, and ₹75,000 for Manisha Shastri.

The petitioners subsequently sought a refund of the disposal proceeds, but their claim was rejected by the Assistant Commissioner, citing a limitation under Section 125, as the 120 days for redemption had allegedly expired.

In the first hearing on 11th September 2025, the Bench comprising Justice Prathiba M. Singh and Justice Shail Jain found the conduct of the Customs Department extremely disturbing. The Court observed that the department had seized, disposed of, and refused to refund the jewellery’s value despite the OIO having attained finality, thereby depriving the passengers of their property without lawful authority. The Court directed Assistant Commissioner (AC) to appear in person and ordered that the matter be brought to the notice of the Secretary, Department of Revenue, and the Chairman, CBIC.

When the matter was next heard on 22nd September 2025, the AC appeared before the Court and confirmed that the jewellery had been sent for disposal, with proceeds totalling ₹20,47,303 realised by the Customs Department. The department, however, alleged that the representations filed by the petitioners bore fake stamps of the Customs office. The petitioners argued that passengers had no direct access to the Customs counter inside the airport and had to rely on staff members to submit such representations.

During the hearing, the Court noted that no Customs counter exists outside the airport terminal, which severely restricts citizens’ ability to submit representations or obtain copies of orders.

The Bench noted that since the gold had been disposed of, the Customs Department would be liable to pay the market value of the goods to the petitioners. The Court also referenced its recent judgment in Jasvinder Kaur v. Commissioner of Customs (2025), where similar directions were issued to pay the market value of disposed goods.

Accordingly, the Court directed the Customs Department to file a comprehensive affidavit detailing the methodology of disposal, the amount realised, and the calculation of refund. The Court also ordered the Delhi Police (Economic Offences Wing) to conduct an enquiry into the authenticity of the documents and the internal practices of the Customs Department.

The Court directed the CBIC to file an affidavit regarding the establishment of information counters at IGI Airport terminals to assist passengers in submitting representations, attending hearings, and obtaining authenticated copies of orders. The matter is now listed for further hearing on 25th November 2025.

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