Union of India & Ors. Vs Om Sai Trading Company & Anr. Etc. (Supreme Court of India)
Summary: The Supreme Court considered the Union of India’s challenge to the High Court’s decision quashing the seizure of 15,865 kg of cut dried areca nuts valued at Rs. 45,14,862. Customs authorities suspected illegal importation from Nepal, but the High Court found no objective material establishing foreign origin or unlawful importation. The goods were being transported between identified Indian consignors and consignees, and had been seized at a toll collection point in Bihar rather than a notified customs area.
The High Court held that ‘reason to believe‘ under Section 110 of the Customs Act, 1962, must be founded on relevant objective material rather than suspicion, general trade practices, visual appearance or reasons supplied subsequently by affidavit. It also found that laboratory observations concerning food safety and circulars governing imported goods or testing did not independently establish customs jurisdiction. The High Court quashed the seizure memorandum dated 6 February 2019 and directed release of the goods.
The Supreme Court noted that the goods had already been released and declined to interfere with the High Court’s decision quashing the seizure memorandum. It expressly clarified, however, that the authorities remained free to investigate and proceed in accordance with the Customs Act, 1962. The appeals were disposed of. The extended discussion of ‘reason to believe’ appears in the High Court decision supplied with the brief Supreme Court order, and should not be attributed as fresh reasoning of the Supreme Court.
Related Reading: The Patna High Court has considered the legality of customs seizure of areca nuts where the requirement of reasonable belief was in dispute. Read: Customs Seizure of Areca Nuts Without Reasonable Belief Quashed – Patna HC.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
Leave granted.
Having heard learned counsel for the parties, in view of the facts of the present case, and as the goods have already been released, we are not inclined to interfere with the decision of the High Court quashing the seizure memo. However, we clarify that the quashing of the seizure memo does not mean the appellants cannot
investigate, and proceed in accordance with law under the provisions of the Customs Act, 1962.
Recording the aforesaid, the appeals are disposed of.
Pending application(s), if any, shall stand disposed of.
Leave granted.
The appeals are disposed of in terms of the signed order.
Pending application(s), if any, shall stand disposed of.
