2024 (4) TMI 541 - HC - Customs

Authority under the Customs Act to proceed against the property of a third party - Prohibition of Benami Property Transactions - petition under Article 226 of the Constitution assails a communication issued by respondent No. 2/Deputy Commissioner of Customs (Preventive) M P Wing Mumbai to the Secretary Pushpa Niketan Co-op. Housing Society informing the society not to permit the petitioner to transfer the flat owned by her without prior No Objection (NOC) from the office of respondent No. 2. as respondent No. 2 had initiated certain investigation against the petitioner s husband Whether respondent No. 2 would have any authority under the Customs Act to proceed against the property of a third party namely of the wife of a person who is being investigated? Whether de hors the Customs Act there is any provision in law permitting respondent No. 2 to issue such communication? HELD THAT - Both the questions are required to be answered in the negative. We have not been pointed out any provision which can be resorted by the Customs officials to attach the property of a third party like the petitioner who cannot be connected to any recovery under the Customs Act much less to issue the impugned communication. Even the provisions of Section 142 of the Customs Act which provides for recovery of sum due to Government could not have been resorted by respondent No. 2 to issue the impugned communication. Thus respondent No. 2 has acted in patent lack of jurisdiction. Even assuming that a statement is stated to be made by the petitioner s husband in relation to the flat in question being purchased by him or actually being his property and ostensibly owned by the petitioner however considering the clear provision of Section 3 of the Prohibition of Benami Property Transactions Act 1988 respondent No. 2 cannot have any jurisdiction to question the petitioner s ownership of the flat. The only person who can question the petitioner s ownership would be the husband of the petitioner. Thus in issuing communication of the nature as impugned the respondent had in fact taken upon himself an obligation of concluding that the flat belongs to the husband of the petitioner when in law such declaration can only be granted by a Civil Court. For such reason even otherwise respondent No. 2 would not have any jurisdiction to issue the impugned communication. As respondent No. 2 did not wield any authority to issue the impugned communication. It was issued in patent lack of jurisdiction. The petition accordingly needs to succeed.

Summary

Issues involved:
The judgment involves a petition under Article 226 of the Constitution challenging a communication issued by the Deputy Commissioner of Customs regarding the ownership of a flat and the authority to restrict transfer without a 'No Objection' certificate.

Details of the Judgment:

Issue 1: Authority of Respondent No. 2 under the Customs Act:
The petitioner contended that the Deputy Commissioner of Customs had no legal authority to issue the communication regarding the petitioner's premises based on an investigation against her husband. The petitioner argued that even if the flat was purchased by her husband, the Commissioner had no jurisdiction to consider it as his property and restrict transfer. The petitioner also cited the Prohibition of Benami Property Transactions Act, 1988, to support her claim.

Issue 2: Jurisdiction of Respondent No. 2 to question ownership:
The respondents argued that the flat was considered the property of the petitioner's husband based on statements made during the investigation. However, the court found that there was no provision under the Customs Act allowing the Commissioner to proceed against the property of a third party like the petitioner. The court also highlighted the Prohibition of Benami Property Transactions Act, stating that only the husband could question the petitioner's ownership.

Key Observations and Ruling:
The court ruled that the Deputy Commissioner of Customs lacked authority to issue the communication and had acted without jurisdiction. Citing a decision of the Kerala High Court, the court emphasized that the Customs authority could not question the ownership of the wife based on transactions made by the husband. The judgment allowed the petition, directing the Commissioner to show cause under what authority the communication was issued. The court kept all contentions open regarding the proceedings under the Order-in-Original.

Conclusion:
The High Court of Bombay held that the Deputy Commissioner of Customs acted without jurisdiction in issuing the communication regarding the ownership of the flat. The judgment allowed the petition and directed the Commissioner to justify the issuance of the communication. All other aspects of the case were left open for further proceedings.