Dhruv Jewellers Vs Principal Commissioner of Customs (Madras High Court)
Summary: Madras High Court allowed the writ petition filed by Dhruv Jewellers challenging the continued freezing of its bullion bank account pursuant to a communication dated 04.08.2022 issued by the Directorate of Revenue Intelligence. The petitioner, engaged in the business of exporting gold jewellery, stated that its premises had been searched by the second respondent and that no incriminating material was found, but its bank account was nevertheless frozen. The Court considered it sufficient to examine the statutory period prescribed under Section 110(5) of the Customs Act, 1962.
The Court observed that Section 110(5) permits provisional attachment of a bank account for a period not exceeding six months. Its proviso permits the Principal Commissioner of Customs or Commissioner of Customs, for reasons recorded in writing, to extend the attachment for a further period not exceeding six months, with the extension being communicated to the person concerned before expiry of the originally specified period. Consequently, a provisional attachment under Section 110(5) cannot continue beyond the maximum period of twelve months.
In the present case, the petitioner’s bank account had been frozen pursuant to the communication dated 04.08.2022. The Court held that even assuming the attachment had been validly extended under the proviso, the maximum twelve-month period had long expired. The respondents contended that a show cause notice had meanwhile been issued under Section 124 of the Customs Act and that the petitioner should therefore approach the adjudicating authority for defreezing. The Court rejected this contention. It held that subsequent issuance of a show cause notice under Section 124 could not, by itself, extend the statutory period governing provisional attachment under Section 110(5). Mere pendency of adjudication proceedings could therefore not justify continuation of the attachment beyond the maximum statutory period.
