DRI Can't Exercise The Power Under The Customs Act , High Court Quashes Search And Seizure

The petitioner/assessee has been the proprietor of a jewellery shop. The office and the residential premises of the petitioner were searched by the respondent/DRI. In the process of searching, the respondent recovered 4652.235 grams of gold bars and cuttings. Similarly, the department also seized 4563.446 grams of fine silver and 407.907 grams of silver ingots.

The petitioner sought the quashing of the seizure proceeding drawn by the respondent and also sought an order of restraint against the department from further calling upon the petitioner for investigation and enquiry.

Counsel for the petitioner assailed the seizure proceeding on the ground that DRI was not authorised to initiate proceedings against the petitioner under the provisions of the Customs Act, 1962.

Counsel for the petitioner contended that under the provisions of the Customs Act, it is only the officers of the Customs Department who are specifically otherwise notified by the Central Government to discharge the functions of the Board or any officers of the Customs Department who could initiate the proceedings under the Customs Act.

Counsel for the petitioner predominantly relied upon the judgement rendered by the Supreme Court in the case of Cannon India Pvt. Ltd. Vs.Commissioner of Customs in which it was held that in the absence of an entrustment under Section 6 of the Customs Act 1962, an officer of the Directorate of Revenue Intelligence will not have jurisdiction to exercise the functions entrusted to Customs Officers under the provisions of the Customs Act 1962.

On the other hand, the Counsel for the DRI justified the action of the respondents by referring to a notification dated 2.5.2012 in which the DRI has also been notified as "proper officer" under the Customs Act and, therefore, the proceeding initiated by the DRI does not warrant any interference as it is strictly in accordance with the requirements under the Customs Act.

The court observed that merely because one of the officers in the search and seizure proceeding belonged to the Customs Department does not mean that the proceeding has been drawn up by the Customs Department.

The court, while refusing to accept the contentions on behalf of DRI, said, "the plea and the defence taken by the Assistant Solicitor General or, for that matter, the Department of DRI are not sustainable, nor do they have any substantial force, particularly in the light of the authoritative judicial precedents laid down by the Supreme Court."

The court allowed the petition and held that notices or summons issued to the petitioner were all without any authority of law and therefore not sustainable.

Case Title: Vijay Baid @ Vicky Versus Union of India | Writ Petition (Civil) No. 5388 Of 2021

Citation: 2022 LiveLaw (Chh) 19

Counsel For Appellant: Advocate Vijay M. Adwani

Counsel For Respondent: A.S.G Ramakant Mishra

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