Custom Authorities Don’t Have Any Power To Seal Immovable Property: Bombay High Court

The Bombay High Court recently held that the Custom authorities do not have any power to seal the premises of a person allegedly involved in smuggling goods.

A division bench of Justice Sunil B Shukre and Justice Kamal Khata in a writ petition held, “…we find that there is no power available with the custom authorities to seal premises of any person, which are nothing but a form of immovable property.”

The petitioner, allegedly involved in gold smuggling sought de-sealing of his premises by the Customs authorities. He also prayed that his statement under section 108 of the Customs Act, 1962 be recorded in visible but not audible distance of his advocate.

The Central Government opposed the prayers and contended that there is no material on record justifying the petitioner’s prayers. Merely bald allegation of an assault is not sufficient to grant his request for keeping his advocate present, it contended.

The court said the petitioner’s request of having his advocate present at visible but not audible distance is harmless. The court noted that the petitioner has an apprehension of assault which needs to be taken care of in the best possible manner.

Allowing his advocate to remain at visible distance would also ensure transparency in the enquiry conducted by Custom officers, the court opined.

The court further held that the Custom authorities don't have any power to seal premises i.e., immovable property of any person.

The court noted that under section 110 or section 121 of the Customs Act, only goods or movable property can be seized and confiscated. The Custom authorities have the power to confiscate the sale proceeds of goods if they have knowledge or reason to believe that the goods are smuggled goods.

The definition of goods under Section 2(22) of the Customs Act only includes movable property, the court noted.

Further, immovable property cannot be seized and confiscated but can only be attached and sold to recover the lost to the government under section 142(1)(c)(ii) of the Customs Act, the court said.

“Even otherwise no immovable property can be seized and confiscated, though it can be attached and sold for making recovery of loss to or dues of the government”, the court said.

However, the present case is not at the stage of recovering loss to the government, the court noted and directed the Custom authorities to remove the seal affixed to the petitioner's premises.

Case no. – Writ Petition No. 782 of 2023

Case Title – Kalpesh Ghevarchand Jain v. Union of India and Ors.

Citation: 2023 LiveLaw (Bom) 174