1993 (8) TMI 68 - HC - Customs

Summary

Issues:
1. Validity of the confiscation of consignment by Customs authorities based on forged documents.
2. Claim of title to the goods by the Petitioner No. 1 Bank against attachment by Income Tax authorities.
3. Determination of title to the consignment in a writ petition.

Analysis:

1. The case involves the confiscation of a consignment by Customs authorities due to forged documents used in the import process. The consignment, imported by a non-existent company, was found to be impermissible, leading to proceedings for confiscation under relevant Customs Act provisions.

2. The Petitioner No. 1 Bank claimed title to the goods based on opening an irrevocable letter of credit for the consignment. The Bank argued that the title vested in them as the opener of the letter of credit, making the confiscation impermissible. However, the Income Tax authorities had attached the consignment for recovering dues from the alleged importer.

3. The High Court ruled that the determination of title to the consignment could not be made in a writ petition. The Court held that the Bank's claim of title needed to be established through a substantive suit rather than in a writ jurisdiction. The judgment emphasized that the Bank's remedy, if any, lay in filing a separate suit to prove its entitlement to the goods.

4. Consequently, the petition filed by the Bank was dismissed, and the rule was discharged with no order as to costs. The auction sale proceeds were directed to be distributed among the Customs authorities for duty and charges, the Income Tax authorities for dues, and the remaining balance along with interest to be paid to the concerned party. If the Bank pursued a suit and proved its title to the consignment, the Income Tax authorities were directed to reimburse any amount due arising from the letters of credit claim.