Govind And Company Vs Union of India (Patna High Court)
The Patna High Court, in the case of Govind And Company Vs Union of India, quashed the seizure of a consignment of Betel Nuts and the accompanying vehicle by the Customs Department. The court held that the seizure was invalid because the Seizing Officer failed to properly record the “reason to believe” that the goods were liable for confiscation, as mandated by Section 110(1) of the Customs Act, 1962. This decision followed the judicial precedent established by a coordinate bench of the same court in M/s Ashoke Das and Another versus Union of India and Others (2025 SCC OnLine Pat 1553).
Factual Background and Petitioner’s Challenge
The petitioner, Govind And Company, filed a writ application challenging Seizure Memo No. 153/CUS/MTH/19-20 dated January 12, 2020. The seizure involved 17,085 Kgs of Betel Nuts valued at Rs. 51,25,500/-, along with a Tata Truck bearing Registration No. RJ 02 GB – 8485. The department alleged violations of Sections 7, 11, 46, and 47 of the Customs Act, 1962, read with Section 3(2) of the Foreign Trade (Development and Regulation) Act, 1992, and a related Ministry of Finance Notification. The petitioner sought to quash the seizure, direct the provisional release of the goods and the truck, and restrain the respondents from taking further coercive action.
The core of the petitioner’s argument, presented through counsel, was that the case was entirely covered by the Patna High Court’s judgment in M/s Ashoke Das (supra). The petitioner pointed out that the seizure memo in the present case was drawn in an “identical manner” to the one scrutinized in M/s Ashoke Das. Specifically, under the column for “Reason for Seizure of goods,” the Seizing Officer had only listed the violated statutory provisions and notifications, without providing any material particulars or substantive reasons.
Judicial Precedent: The Ashoke Das Principle
During the proceedings, the court noted that the judgment in M/s Ashoke Das had been acted upon by the Customs Department, and no special leave petition had been filed to challenge it before the Supreme Court. The court therefore proceeded to apply the precedent set in the M/s Ashoke Das case, which provided the detailed reasoning for quashing the seizure.
Analysis of Section 110(1) of the Customs Act
In M/s Ashoke Das, the court analyzed Section 110(1) of the Customs Act, 1962, which grants a proper officer the power to seize goods. The provision states that if an officer “has reason to believe that any goods are liable to confiscation under this Act,” they may seize such goods.
The Ashoke Das judgment emphasized a critical requirement: the proper officer must record his reasons to believe that the goods are liable to confiscation prior to the seizure. Merely citing the sections of the Customs Act in the seizure memo is insufficient.
The court in M/s Ashoke Das relied on the view taken by the Hon’ble Delhi High Court in Worldline Tradex Private Limited and its own coordinate benches in Assam Supari Traders and Krishna Kali Traders. These precedents established that the power of seizure must be exercised for valid reasons, and the necessary ‘reason to believe’ cannot be inferred or substituted later; it must be recorded by the officer at the time of seizure. Finding that the seizure memo in M/s Ashoke Das—and by extension, the one in the present case—only contained a bare recital of statutory sections and lacked the material information relating to ‘reason to believe,’ the High Court concluded that the Seizing Officer had not complied with the mandatory requirements of Section 110(1).
Court’s Holding and Order
Applying the principle established in M/s Ashoke Das, the Patna High Court in Govind And Company Vs Union of India disposed of the writ application in similar terms. The court quashed the Seizure Memo (Annexure ‘5’) dated January 12, 2020, pertaining to the Betel Nuts and the vehicle.
Investigation Can Continue
Crucially, the court clarified that the quashing of the seizure memo does not preclude the department from continuing the investigation or proceeding in accordance with law under the provisions of the Customs Act, 1962. This clarification was based on observations made in M/s Ashoke Das, which in turn referred to an earlier order of the Hon’ble Supreme Court.
The court specifically stated that the department retains the right to investigate and proceed with the adjudication process. Regarding the show-cause notice (if one was issued, as was the case in M/s Ashoke Das), the petitioner is free to submit a reply, after which the adjudicating officer is to pass an appropriate order under the provisions of the Act. All questions regarding the validity of the show-cause notice and the impact of the quashing of the seizure memo remain open to be addressed in the adjudication proceedings.
FULL TEXT OF THE JUDGMENT/ORDER OF PATNA HIGH COURT
Heard learned for the petitioner and learned Additional Solicitor General assisted by learned Senior Standing Counsel for the Department of Customs.
2. This writ application has been filed seeking the following reliefs :-
“(i) Quashing of the Seizure No. 153/CUS/MTH/19-20 dated 12.01.2020 (Annexure 5) whereby 17085 Kgs. of Betel Nuts valued at Rs. 51,25,500/- along with Tata Truck bearing Registration No. RJ 02 GB – 8485 has been seized under Section 110 of the Customs Act, 1962 for alleged violation of Section 7, 11, 46 and 47 of the Customs Act, 1962 read with Section 3(2) of the Foreign Trade (Development and Regulation) Act, 1992 and Government of India, Ministry of Finance Notification NO. 9/96 (NT) – CUS dated 22.01.1996 issued under Section 110 of the Customs Act, 1962;
(ii) Direction upon the Respondents to release provisionally the Betel Nuts and Truck seized vide Seizure Memo No. 163/CUS/MTH/19-20 dated 12.01.2020 (Annexure 5) during the pendency of the present writ petition; and
(iii) Restraining the respondents from taking any coercive action against the petitioner in connection with Seizure No. 163/CUS/MTH/19-20 dated 12.01.2020 (Annexure 5) during the pendency of the present writ petition.
3. Learned counsel for the petitioner submits that the case of the petitioner would be covered by the judgment of this Court in the case of M/s Ashoke Das and Another versus Union of India and Others reported in 2025 SCC OnLine Pat 1553. The Seizure Memo dated 12.01.2020 as contained in Annexure ‘5’ to the writ application has been drawn in identical manner as has been found by this Court in the case of M/s Ashoke Das (supra).
4. Attention of this Court has been drawn towards the Seizure Memo (Annexure ‘5’) in which in the column where Reason for Seizure of goods is required to be filled up, the Seizing Officer has only mentioned as under:-
“Violation of Sections 7, 11, 46 & 47 of Customs Act, 1962 read with Section 3(2) of the Foreign Trade (Development and Regulations) Act, 1992 & Government of India, Ministry of Finance, Notification No. 09/96 (NT) Cus, dated 22.1.96 issued under Section 110 of the Customs Act, 1962.”
5. On earlier occasion, when the connected writ application being CWJC No. 8169 of 2024 was mentioned for consideration, this Court passed the following order:-
Order dated 25.04.2025
“After this Court delivered its judgment in CWJC No. 17756 of 2024 and CWJC No. 17758 of 2024 today, learned counsel for the petitioners has mentioned these matters saying that these writ applications would be covered by the judgment of this Court in case of M/s Ashoke Das and Another Vs. Union of India and Others (CWJC No. 4918 of 2021) reported in 2025 SCC OnLine Pat 1553 and also by the judgment of this Court delivered today in the aforementioned writ applications.
2. Anshuman Singh, learned Senior Standing Counsel for the Department of Customs submits that he would seek instructions. Counter affidavits have already been filed in these writ applications.
3. Learned counsel for the parties have requested this Court to fix a date.
4. List all these cases on 05thMay, 2025 within top ten cases for consideration.”
6. Today, when the writ application is taken up for consideration, learned ASG and learned Sr. Standing Counsel for the Department has informed that the judgment of this Court in the case of M/s Ashoke Das (supra) has been acted upon by the Department, to their information no special leave petition to appeal has been filed challenging the judgment of this Court in the case of M/s Ashoke Das (supra).
7. In the case of M/s Ashoke Das (supra), this Court has in the operative part of the judgment held as under:-
“41. It is apparent from a bare reading of the order of the Hon’ble Supreme Court that it was passed after granting leave against the Division Bench judgments of this Court and the effect of the order of the Hon’ble Supreme Court may be clearly seen. The principle of ‘merger’ will apply. Despite quashing of the seizure memo, it cannot be said that the appellants cannot investigate and proceed in accordance with law under the provisions of the Act of 1962.
42. In the light of the aforementioned discussions, when we examine the seizure memo (Annexure P1), it is found that the Seizing Officer has not complied with the mandate of sub-section (1) of Section 110 of the Act of 1962. The Hon’ble Delhi High Court has, in Worldline Tradex Private Limited (supra) categorically held that the power of seizure under Section 110 of the Act has to obviously be exercised for valid reasons. The proper officer has to record his reasons to believe that the goods that he proposes to seize are liable to confiscation. The said reasons for exercise of the power have to be recorded prior to the seizure. The subsequent instruction issued by the Department clearly says that in addition to panchnama reason to believe should be indicated in the seizure memo/order.
43. We find from the records that in the present case, apart from the seizure list, there is no other order of the Seizing Officer showing his reason to believe. The learned co-ordinate Bench of this Court in the case of Assam Supari Traders (supra) and Krishna Kali Traders (supra) has held that mere mentioning of the sections of the Act of 1962 in the seizure memo would not be sufficient in absence of material information relating to ‘reason to believe.’ We are in agreement with the said view of the learned co-ordinate Bench. We have been told at the Bar that Assam Supari Traders (supra) and Krishna Kali Traders (supra) have attained finality as no challenge to these judgments have been taken to the Hon’ble Supreme Court.
44. In result, the seizure memo (Annexure P1) is quashed. So far as the notice to show cause as contained in Annexure P7 to the writ petition is concerned, we refrain from interfering with the show cause notice. We have already recorded the order of the Hon’ble Supreme Court hereinabove in which it has been held that quashing of the seizure memo does not mean the appellants cannot investigate and proceed in accordance with law under the provisions of the Act of 1962. The petitioner, if so advised, may submit his reply to the show cause notice. It is open to the petitioner to file a reply to the show cause notice within six weeks from today where after the adjudicating officer shall proceed to pass appropriate order under the provisions of the Act of 1962.
45. All questions with regard to the issuance of show cause notice and impact of quashing of the seizure memo (Annexure P1) shall remain open.”
8. Prabhat Ranjan, learned counsel for the petitioner submits that a similar order may be passed in this case as the issues involved in the present writ application are fully covered by the judgment of this Court in the case of M/s Ashoke Das (supra) which in turn has taken into consideration the judgment of the Hon’ble Supreme Court and learned Co-ordinate Bench on the issues which had fallen for consideration.
9. In view of the stand of the parties recorded hereinabove, this writ application is being disposed of in similar terms as has been done by this Court in the case of M/s Ashoke Das (supra).
10. The Seizure Memo as contained in Annexure ‘5’ is quashed, however, in terms of the observations in paragraphs ‘44’ and ‘45’ in the case of M/s Ashoke Das (supra), it is once again held that quashing of Seizure Memo would not mean that the Department cannot investigate and proceed in accordance with law under the provisions of the Customs Act, 1962. Other observations shall also apply in the present case.
11. This writ application stands disposed of.
