S.110 Customs Act- Failure To Disclose Reasons For Confiscating Goods 'Draconian', Violates Article 14, Renders Provisional Attachment Illegal: Patna HC

The Patna High Court has held that failure on part of the customs officer to record reasons for confiscating goods under Section 110 of Customs Act, renders the provisional attachment “illegal”.

The provision empowers a customs officer to seize goods if he has 'reason to believe' that such goods are liable to confiscation under the Act, and prescribes subsequent procedure.

Bench of Justices PB Bajanthri and Alok Kumar Pandey observed, “For seizure of goods, unless there are strong and compelling reasons to believe that goods are 'imported', one cannot draw inference that officer who had seized goods believe it to be foreign goods etc. It will be an instrument of oppression, misuse, and arbitrariness clothing officers with uncanalized, draconian and arbitrary powers thereby rendering opinion itself violative of Article 14 of the Constitution.”

It held that failure to disclose the reasons right at the beginning of the seizure memo would not be a mere irregularity but an illegality and would cause the order of provisional attachment to be rendered illegal.

In the case at hand, 24,288 Kgs of Dried Areca Nuts suspected to be imported along with transporter truck was seized under Section 110 for alleged violation of Section 7, 11, 46 and 47 of Customs Act, 1962 read with Section 3 (2) of the Foreign Trade (Development and Regulation) Act, 1992.

The Petitioner-trader alleged that an unnumbered detention memo was issued to him and the 'reason to believe' in seizure memo is not supported by application of mind, in as much as merely by looking at the nuts, its origin- whether local or imported, cannot be determined.

At the outset, the bench delved into discussions held among the members of the Select Committee while deliberating on the Customs Bill, wherein Morarji Desai said “he (officer) has to give his reasons in writing before he seizes the goods.”

“From the aforementioned discussion among the members of the committee, it is evident that reasons / grounds are to be assigned while invoking Section 110 of the Act, 1962,” Court held.

The Respondent-authority had argued that officials who have seized the goods need not give reasons and it is sufficient if statutory provision of law is narrated to the extent that the petitioner has violated. Thereafter, one has to draw inference that reasons for seizure is to the extent that there is a violation of statutory provision, it was submitted.

Disagreeing, the Court held, “'Reason to believe' cannot be a rubber stamping of the opinion already formed by a competent officer. The Officer who is supposed to write down his minimum reasons to believe has to be independently apply his mind. It should not be a mechanical reproduction of the words in the statute.”

Reliance was placed on catena of Supreme Court judgments including Income Tax Officer, I Ward, DIST, VI, Calcutta and Others vs. Lakhmani Mewal Das (1976) and “Aslam Mohammad Merchant vs. Competent Authority.”

Accordingly, the High Court allowed the writ and set aside the seizure memo.

Appearance: Advocates Prabhat Ranjan and Ansh Prasad for Trader; ASG Dr. KN Singh, for Respondent

Case title: Assam Supari Traders v. Union of India.

LL Citation: 2024 LiveLaw (Pat) 73

Case no.: Civil Writ Jurisdiction Case No.10582 of 2024

Click Here To Read/Download Order