Leyla Mohmoodi Vs Additional Commissioner of Customs (Bombay High Court)
Bombay High Court held that action of the department in selling the gold during the pendency of the appeal is illegal and unconstitutional.
Facts- The petitioners are Iranian nationals. On 14.01.2018, they arrived at Chhatrapati Shivaji Maharaj International Airport, Mumbai, by the Oman Air Flight. The petitioners were wearing gold ornaments (bangles) having net weight of 1028 grams. They were intercepted by the customs officials at Mumbai Airport, and the gold bangles worn by them, were seized by the customs officials.
The respondents initiated an action for disposal of the seized gold jewellery for which on 4 April 2018 a notice was issued by the Assistant Commissioner of Customs, Air Intelligence Unit, C.S.I. Airport, inter alia recording that the officers of the Commissionerate had seized assorted gold jewellery totally weighing 1028 grams valued at 26,63,366/- from the petitioners who were holding Iranian passport, on their arrival from Muscat.
The Assistant Commissioner initiated proceedings u/s. 110(1B) of the Customs Act so as to obtain an order from the Court of Metropolitan Magistrate for the identity of the gold jewellery for disposal of the gold jewellery. Such an application came to be allowed by the Metropolitan Magistrate.
A show cause notice has been issued to the petitioners calling upon the petitioners to explain why the seized gold jewellery ought not to be confiscated and penalty imposed. However, before the notice could be taken to its logical conclusion and an adjudication order could be passed, the said gold jewellery belonging to the petitioners was sold by State Bank of India.
This petition under Article 226 of the Constitution of India raises an important issue as to whether the action of the respondents to sell / dispose of the gold jewellery of the ownership of the petitioners, as seized from them, without notice to the petitioners, and before an order of confiscation u/s. 111 of the Customs Act, 1962 can be said to be legal and valid.
The contention of the petitioners is that the impugned action of the respondents of seizure of petitioners’ gold jewellery and its disposal was patently illegal being in breach of the provisions of not only the Customs Act, but the rights guaranteed to the petitioners under Article 300A read with Article 14 of the Constitution of India.
Conclusion- Substantive provisions of the Customs Act cannot be rendered nugatory, by recognizing unguided and unfettered powers being conferred u/s. 110 on the Customs Officers, to dispose of the seized property, till the orders of any confiscation attains finality, unless there are strong reasons which would justify any such action when tested on such constitutional and legal parameters, and that too on the satisfaction of the officers to be reached only after hearing the owner of the property.
Held that the Revenue Authorities were not justified in selling the gold, during the pendency of the appeal. Thus action of the respondent in selling gold pending the appeal/revisional proceeding was bad in law.
Held that once the action of the respondents is held to be void, ab initio, illegal and unconstitutional, there can be no second opinion that the rights of the petitioners in regard to illegal seizure would be required to be restituted.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
The judgment has been divided into the following parts:
