Delhi HC Grants Conditional Release of Artwork “The Scarecrow” on ₹2 Lakh Deposit and ₹30,000 Redemption Fee [Read Order]

The High Court of Delhi, ordered the conditional release of the artwork “The Scarecrow” by late Shri B.C. Sanyal, directing the petitioner to deposit ₹2 lakh as an ad-hoc payment towards differential duty and ₹30,000 as a redemption fee.

Uday Jain & Anr, petitioner-assessee, filed a writ petition challenging the impugned order dated 23rd July 2025 passed by the Office of the Principal Commissioner of Customs. The case arose over an artwork titled “The Scarecrow”, created by late Shri B.C. Sanyal, a renowned artist, formed the subject matter of the petition.

The artwork was created in 1972 but was later removed from India at an unknown point in time. The petitioner, an art gallery owner, sought to import the artwork through bill of entry no. 958966 dated 9th January 2024 from Dubai. As per the bill of entry, the declared value of the artwork during import was USD 200.

The Customs Department stated that the artwork came from Lahore, Pakistan and valued it at Rs. 30 lakhs based on an art valuer’s report. In the impugned order, it reclassified the artwork under CTH 98060000 instead of the declared CTH 97019100 and revised its value from Rs. 20,409.56 to Rs. 30,00,000.

The department ordered confiscation of the artwork under Section 111(m), giving an option to redeem it by paying Rs. 30,000. It also demanded differential duty of Rs. 83,23,037 with interest, after adjusting the customs duty already paid. Further, it imposed a penalty of Rs. 83,23,037 and an additional penalty of Rs. 1,00,000 on M/s Dhoomimal Art Gallery, along with a penalty of Rs. 50,000 on Mr. Nixit Kothari for abetting the import.

Justice Prathiba M Singh and Justice Shail Jain heard the submissions and examined the matter. It noted that the artwork was created by late Shri B.C. Sanyal, a renowned Indian artist and one of the founders of the Lahore College of Fine Arts before Partition.

While the bill of entry showed that the artwork was imported from Dubai, the impugned order stated that the packaging indicated it came from Lahore, Pakistan, and was routed through Dubai.

The Court observed that there was no conclusive evidence to prove that the painting was made in Pakistan. It identified three key issues for consideration, whether the country of origin declared by the petitioner should be accepted, whether the valuer’s assessment of Rs. 30 lakhs was correct, and on what terms the artwork should be released.

Before deciding the matter, the bench directed the Customs Department to file a counter affidavit. However, it considered two important factors: the artwork was old and could be damaged if left with the Customs Department, and there was a significant difference between the valuer’s estimate and the prices of other artworks by the same artist, suggesting that the valuation might be approximate.

Considering these aspects, the Court held that the artwork should be released to the petitioner subject to conditions. The petitioner was directed to deposit Rs. 2 lakhs as an ad-hoc payment towards differential duty and Rs. 30,000 as redemption fee under Section 125 of theCustoms Act, 1962.

Upon making these deposits, the Customs Department was instructed to release the artwork to the petitioner on or before 10th September 2025. The bench clarified that these directions were subject to further orders. It allowed the Customs Department to file its counter affidavit within four weeks, with the rejoinder, if any, to be filed within four weeks thereafter, and listed the matter for hearing on 11th November 2025.

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