1998 (2) TMI 139 - HC - Customs

Summary

Issues Involved:
1. Applicability of Section 3(1) of the COFEPOSA Act.
2. Allegation of smuggling or wrong declaration.
3. Territorial jurisdiction of the High Court.
4. Validity of detention order based on a single incident.
5. Pre-execution challenge to detention order.

Issue-wise Detailed Analysis:

1. Applicability of Section 3(1) of the COFEPOSA Act:
The petitioner challenged the detention order issued under Section 3(1) of the COFEPOSA Act, arguing that the allegations did not constitute an offense warranting detention under the Act. The court examined whether the attempt by Ratan Bagaria and his supplier amounted to an act of smuggling or a wrong declaration to customs authorities. The court noted that the export of empty shells of floppy discs is not prohibited, and thus, the act did not constitute smuggling under Section 3(i) or (ii) of the COFEPOSA Act.

2. Allegation of Smuggling or Wrong Declaration:
The court scrutinized the facts and found that the company of Ratan Bagaria attempted to export empty shells of floppy disc drives instead of complete drives. The court highlighted that smuggling, as defined under Section 2(39) of the Customs Act, involves acts rendering goods liable to confiscation under Section 111 or 113. Since the goods in question were not prohibited, the court concluded that the act was a case of wrong declaration or misdescription, not smuggling.

3. Territorial Jurisdiction of the High Court:
The respondent argued that the High Court lacked jurisdiction as the cause of action arose in Chennai or New Delhi. However, the court held that it had jurisdiction since the detention order could be executed in Haryana, where the petitioner resided. The court also referenced the Supreme Court's stance that judicial review is permissible even if the detention order has not been executed.

4. Validity of Detention Order Based on a Single Incident:
The court found the detention order unsustainable as it was based on a single incident of alleged smuggling without any prior history of smuggling activities. The court cited Gurjeet Kaur v. The Secretary to Government Punjab, stating that a detention order based on non-existent facts and a single incident cannot be upheld. The court emphasized that the alleged act was a wrong declaration, not smuggling.

5. Pre-execution Challenge to Detention Order:
The petitioner challenged the detention order at the pre-execution stage. The court acknowledged that the petitioner had the right to challenge the order before its execution, especially when the detention order was based on non-existent facts and there was no evidence of prior smuggling activities.

Conclusion:
The court allowed the petition and struck down the detention order, Annexure P-5, stating it was based on non-existent facts and a single incident of wrong declaration. The court clarified that this decision does not prevent the government from prosecuting the petitioner for violating customs laws. The petition was allowed, and there was no order as to costs.