Messrs Gold Star Industries Vs Union of India and others (Punjab and Haryana High Court)
The Punjab and Haryana High Court disposed of three writ petitions filed in 2007, as they involved similar facts and legal issues. The petitions arose from searches conducted by officers of the Directorate of Revenue Intelligence (DRI) at the premises of the petitioner companies in September 2005, during which documents, files, and electronic equipment were seized under panchnamas. The petitioners initially approached the Court seeking release of the seized materials, contending that the investigation initiated by DRI officers was contrary to the Customs Act, 1962 due to lack of legal sanction.
The petitioner companies were engaged in manufacturing and exporting bicycle components and had availed benefits under the Duty Free Replenishment Certificate (DFRC) Scheme. Following the searches, summons were issued requiring production of records, and show cause notices under Section 28 of the Customs Act were later issued between 2007 and 2008 by DRI officers. Interim protection was granted by the High Court in 2007 against coercive recovery, subject to furnishing of surety bonds.
When the matters were taken up for final hearing in July 2024, the Court noted that the writ petitions were not originally directed against the show cause notices. Amendments were permitted, and the principal challenge raised thereafter was that DRI officers lacked jurisdiction to issue show cause notices under Section 28.
