1985 (10) TMI 102 - HC - Customs

Summary

Issues:
1. Quashing of investigation under Section 482 of the Code of Criminal Procedure and Article 227 of the Constitution of India.
2. Allegations of mala fide investigation by Customs Department under Sections 135, 111(o), and 11 of the Customs Act.
3. Interpretation of the order passed by the Deputy Chief Controller of Imports and Exports.
4. Distinction between the Imports and Exports (Control) Act, 1947 and the Customs Act, 1962.
5. Validity of investigation and allegations against the petitioner.
6. Claim of harassment and mala fide exercise of power by the Customs Department.

Analysis:
The petitioner sought to quash the investigation initiated by the Customs Department under Sections 135, 111(o), and 11 of the Customs Act, alleging harassment. The petitioner, engaged in export business, claimed the investigation was mala fide and relied on an order by the Deputy Chief Controller of Imports and Exports, which found no wrongdoing. The petitioner contended that this order should prevent further investigation. However, the Respondents argued that the order was not binding on the Customs Authorities and that the investigation was necessary due to alleged offenses committed under the Customs Act. They claimed the petitioner was involved in fictitious firms and fraudulent activities related to imports and exports.

The court analyzed the provisions of the Imports and Exports (Control) Act, 1947, and the Customs Act, 1962. It clarified that penalties under the former act did not override penalties under the Customs Act. The court emphasized that orders from adjudication proceedings under the Imports and Exports (Control) Act were not binding on criminal courts. The judgment highlighted the ongoing investigation into the petitioner's alleged involvement in fraudulent activities, emphasizing that the investigation stage was not the appropriate time to determine the merits of the case.

Regarding the petitioner's claims of harassment and mala fide intent by the Customs Department, the court found it premature to conclude on these allegations while the investigation was ongoing. The court noted the safeguards in place, such as the requirement of previous sanction from the Collector of Customs to proceed with any offense under the Customs Act. Ultimately, the court dismissed the writ petition, ruling that given the circumstances and the ongoing investigation, it was not appropriate to quash the investigation using Section 482 of the Code of Criminal Procedure or Article 227 of the Constitution of India.