Shivaraj M.S. Vs Union of India (Karnataka High Court)
Summary: The Karnataka High Court dismissed a writ appeal filed by Shivaraj M.S. challenging the refusal of Customs authorities to immediately clear cryptocurrency mining equipment imported from Hong Kong. The Division Bench comprising Chief Justice Vibhu Bakhru and Justice K.S. Hemalekha upheld the Single Judge’s order dated 24 July 2026, which had rejected the appellant’s allegations of corruption, arbitrary conduct and abuse of statutory powers by Customs officials. The dispute concerned an Innosilicon A9 ZMaster computing device, apparently used for cryptocurrency mining, imported in July 2018.
The appellant claimed that he had purchased the equipment under a promotional pre-booking arrangement by paying Bitcoin (BTC) 0.9400 to an overseas supplier. The equipment was dispatched under Airway Bill No. 5698197481, accompanied by an invoice dated 3 July 2018 describing it as a “server” with a declared value of USD 300. The shipment arrived in India on 6 July 2018, and DHL filed a Courier Bill of Entry with the Customs Department. The consignment was flagged under the Risk Management System, following which Customs required the appellant to furnish the purchase order and evidence of payment. Suspecting misdeclaration, the authorities withheld the release of the equipment.
The appellant approached the High Court through W.P. No. 13068 of 2024, seeking directions for an investigation by the Central Bureau of Investigation into alleged corruption and deliberate delays by Customs officials. He also sought compensation for financial losses, legal expenses and emotional distress allegedly caused by the prolonged detention of the equipment. Additionally, he requested directions requiring government authorities to formulate clear policies governing the import, valuation, customs duties, documentation and clearance of cryptocurrency mining equipment, including mechanisms to address departmental delays.
During the proceedings, the Customs authorities stated that the market value of the imported equipment was approximately USD 6,750, as ascertainable from information available on the internet, whereas its declared value was only USD 300. The appellant, appearing in person, did not dispute that the equipment was worth USD 6,750. The Division Bench observed that these circumstances prima facie indicated misdeclaration of value. The appellant nevertheless argued that DHL had filed the Bill of Entry without his authority and that Customs should have promptly determined the correct valuation and raised a demand for the applicable customs duty. He further contended that the delay in releasing the equipment had rendered it obsolete.
The High Court noted that the Single Judge had examined the relevant circumstances and found that Customs had communicated its objections to the appellant on 19 July 2018, shortly after the goods arrived in India. The communication explained that immediate clearance was withheld because the equipment had been described as a “server” and valued at USD 300, both of which appeared incorrect. The Single Judge concluded that the available material did not establish arbitrariness, mala fides or abuse of statutory authority. Consequently, the request for a CBI investigation was considered wholly misconceived.
Agreeing with the Single Judge, the Division Bench held that there was no infirmity in the rejection of the writ petition. It also found no justification for issuing the broader policy directions sought by the appellant regarding the clearance and handling of cryptocurrency mining equipment. The Court concluded that the original writ petition was misconceived and the appeal lacked merit. Accordingly, the writ appeal was dismissed. The ruling concerns the specific facts of suspected misdeclaration and does not establish a general prohibition on importing cryptocurrency mining equipment.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
1. The appellant has filed the present appeal impugning the order dated 24.07.2026 passed by the learned Single Judge in W.P.No.13068/2024 (GM-RES).
2. The appellant had placed an order with an overseas supplier in Hong Kong for a specialised computing device (Innosilicon A9 ZMaster). Apparently, the said equipment is used for cryptocurrency mining. The appellant claims that the said equipment was purchased under a promotional pre-booking arrangement, whereby the appellant paid the purchase consideration in cryptocurrency, namely Bitcoin (BTC) 0.9400. The overseas vendor dispatched the said equipment under the Airway Bill No.5698197481 along with an invoice dated 03.07.2018 describing the said equipment as a “server” and disclosing the value at USD 300. The DHL filed a Courier Bill of Entry with the Customs department. The goods arrived on 06.07.2018. Prior to that, the courier had sought the appellant’s KYC. The Bill of Entry was flagged under the Risk Management System, and the appellant was required to produce the purchase order and a copy of the remittance of the consideration.
3. The Customs department, prima facie, was of the view that there was misdeclaration and withheld the release of the goods. In the aforesaid backdrop, the appellant had filed a writ petition (WP.No.13068/2024) seeking the following reliefs:
“a. Issue a Writ of Mandamus, or any other appropriate writ, order, or direction, directing the Central Bureau of Investigation (CBI) or any other appropriate agency/department to conduct a thorough, impartial, uninfluenced, unbiased, fair and time-bound investigation into the allegations of corruption and malfeasance against the customs officials responsible for the deliberate delay in clearing the Petitioner’s shipment as specified vide Annexure-AM dated 31.01.2023. This investigation shall encompass the identification of all complicit officers, a full disclosure of the investigation’s findings, and shall be conducted in adherence to due process.
b. Issue a Writ of Mandamus, or any other appropriate writ, order, or direction, requiring the Central Bureau of Investigation and Principal Commissioner of Customs, Air Cargo Complex, Menzies Aviation Bobba Cargo Terminal 1, Kempegowda International Airport, Devanahalli, BENGALURU-560300, to extend full co-operation and provide all necessary documents, information, and logistical support to facilitate the investigation as reflected in Annexure-R dated 19.04.2021.
c. Issue a Writ of Mandamus, or any other appropriate writ, order, or direction, instructing the Respondents to compensate the Petitioner for the demonstrable financial losses compounded to time, legal costs and the emotional distress caused by their actions and omissions directly leading to the prolonged delay and obstruction in the release of the equipment.
d. Issue directives and observations to the relevant government bodies, Respondent No. 14 specifically the Ministry of Finance and the Central Board of Indirect Taxes & Customs (CBIC), to formulate and implement unambiguous policies and procedures for the import, clearance, and handling of highly sophisticated mechanisms such as cryptocurrency mining equipment. A mechanism needs to be formulated to penalize the department for delay compounded to time as government expects when taxes and GST are delayed, in accordance with WTO/GATT agreements.
e. Mandate that such policies clearly outline the valuation methods, applicable duties and taxes, necessary documentation, and expected timelines for handling cryptocurrency-related imports
f. Establish an accessible information portal or designate specific officials within the Customs Department to provide guidance and address inquiries related to the import of cryptocurrency mining equipment.
g. Pass any further order or orders as this Hon’ble Court may deem fit, just, and equitable, to secure the ends of justice in the present case.
h. And for this act of kindness, the Petitioner shall ever pray.”
4. A plain reading of the reliefs sought indicates that the appellant believed the Customs authority had committed a crime requiring investigation by the Central Bureau of Investigation [CBI]. According to the appellant, the respondents had caused a financial loss to him, and he is entitled to compensation.
5. The Customs authority determined that the market value of the goods imported by the appellant was approximately of USD 6750 as ascertainable from the internet. However, the declared value of the equipment was USD 300. The appellant appeared in person and did not dispute that the value of the equipment was USD 6750. Thus, prima facie, it appears that the value was misdeclared.
6. The appellant, however, submits that DHL filed the Bill of Entry without any authority. His grievance is that the Customs authority did not immediately value the goods and raise a demand towards the customs duty payable. He also contends that withholding the goods rendered them obsolete.
7. The learned Single Judge had examined the facts of the case and found that within the short period after the goods arrived in India, the Customs department sent a communication dated 19.07.2018 informing the appellant as to why the goods were not immediately cleared. The learned Single Judge also noted that the grounds for withholding immediate clearance as mentioned in the communication were that the equipment was described as a “server” and its value was declared as USD 300, both of which did not appear to be correct.
8. In the given facts, the learned Single Judge found that there were no grounds to establish any arbitrariness, mala fide or abuse of statutory power. The petitioner’s prayer to refer the matter to the CBI was wholly misconceived. We find no infirmity with the said view. We also find there are no grounds for issuing any directive for clearance and handling of goods as sought by the appellant. The petition preferred by the appellant was misconceived and the present appeal is also unmerited. In our view, the learned Single Judge has rightly rejected the same.
9. In view of the above, the present appeal is dismissed.
