2021 (10) TMI 136 - HC - Customs

Smuggling - Detention order - Illegal availment of duty drawback - reasonable basis provided by any statements or not - section 3(1) of the COFEPOSA Act - petitioner is alleged to have attempted to export goods on paper without actually exporting anything - prejudicial activity under the COFEPOSA Act - whether there was a live-link or a causal connection between the prejudicial activity, in which the petitioner is alleged to have indulged, and the passing of the detention order? - grounds on which the detention order is premised are stale or illusory or have no real nexus with the need for placing the petitioner under prevention detention, or not. HELD THAT - A close and careful perusal of the time-chart discloses that the 'actual activity which the petitioner is alleged to have done was of having exported certain goods only on-paper vid shipping Bill No. 9551237 dated 11.12.2018, whereby, as the allegation goes, the vehicle carrying goods was found to have been a tractor (presumably, as opposed to a truck or other goods carrier) and no goods were in fact loaded for onward export, though duty drawback and benefit under the IGST Act are alleged to have been availed. The other dates contained in the time-chart from 11.12.2018 all the way upto the passing of the impugned detention order dated 15.01.2021, which order was served upon the petitioner on 23.01.2021, do not disclose any other prejudicial activity which the petitioner can be said to have undertaken after 11.12.2018. Since, as the record discloses, the last act which the petitioner undertook, and which may amount to prejudicial activity, was on 11.12.2018, but the detention order was passed more than 02 years later on 15.01.2021, it is evident that the live-link or causal connection between the petitioner s preventive detention, meant to forestall the petitioner from indulging in any prejudicial activity, can surely be said to have snapped - the detention order passed on 15.01.2021 and served upon the petitioner on 23.01.2021 cannot be said to be validly based upon alleged prejudicial activity undertaken by the petitioner on 11.12.2018. A gap of more than 02 years between the last alleged prejudicial activity undertaken by the petitioner cannot be the basis for a justifiable apprehension that the petitioner would indulge again in similar prejudicial activity, to prevent which he should be preventively detained. The petitioner is directed to be released from custody forthwith, unless his custody is required in any other matter - petition disposed off.

Summary

Issues Involved:
1. Validity of the detention order under COFEPOSA Act.
2. Delay in passing the detention order.
3. Legitimacy of the grounds for detention.
4. Petitioner's medical condition and its impact on detention.
5. Legibility and comprehensibility of documents served to the petitioner.
6. Subjective satisfaction of the detaining authority.
7. Petitioner's ability to make an effective representation.
8. Alleged involvement in fraudulent activities and their implications.

Issue-wise Detailed Analysis:

1. Validity of the Detention Order Under COFEPOSA Act:
The petitioner challenged the detention order dated 15.01.2021 under Section 3(1) of the COFEPOSA Act, arguing that the grounds for detention were not substantiated and lacked subjective satisfaction. The principal ground for detention was the petitioner's alleged control over a syndicate involved in fraudulent exports and imports to evade customs duty and earn undue export benefits, including IGST refunds through 33 non-existent or dummy firms.

2. Delay in Passing the Detention Order:
The petitioner contended that there was an inordinate and unexplained delay in passing the detention order, which was based on stale material. The court referred to several judicial precedents, including T.A. Abdul Rahman v. State of Kerala, which emphasized that undue and long delay between prejudicial activities and the passing of a detention order necessitates a tenable and reasonable explanation from the detaining authority. The court found that the last prejudicial activity alleged against the petitioner occurred on 11.12.2018, but the detention order was passed more than two years later on 15.01.2021, thus snapping the live-link or causal connection between the activity and the need for detention.

3. Legitimacy of the Grounds for Detention:
The court examined whether the grounds for detention were stale, illusory, or lacked real nexus with the need for preventive detention. It was noted that the only specific activity alleged against the petitioner was related to a shipping bill dated 11.12.2018. The court concluded that the grounds for detention were stale and lacked real nexus with the detention order passed more than two years later.

4. Petitioner's Medical Condition and Its Impact on Detention:
The petitioner suffered a severe brain stroke on 31.10.2019, resulting in hemiplegia, which left him physically incapacitated. The court considered the petitioner's medical condition, which further supported the argument that he could not have indulged in any prejudicial activity during his detention.

5. Legibility and Comprehensibility of Documents Served to the Petitioner:
The petitioner argued that many documents served upon him were illegible, making it difficult for him to comprehend their purport and effect. This impeded his ability to make an effective representation against the detention order.

6. Subjective Satisfaction of the Detaining Authority:
The petitioner contended that the detaining authority did not arrive at any subjective satisfaction to warrant his detention under Section 3(1) of the COFEPOSA Act. The court emphasized that preventive detention must be based on a genuine and reasonable subjective satisfaction of the detaining authority, which was lacking in this case.

7. Petitioner's Ability to Make an Effective Representation:
The court noted that the petitioner was unable to make an effective representation due to the illegibility of documents and the lack of a clear connection between the alleged prejudicial activity and the detention order. This violated the petitioner's right to a fair opportunity to contest the detention.

8. Alleged Involvement in Fraudulent Activities and Their Implications:
The respondents alleged that the petitioner was involved in fraudulent transactions through 33 non-existent or dummy firms, leading to significant customs duty evasion and undue IGST refunds. However, the court found that the evidence presented did not substantiate continuous prejudicial activity between 11.12.2018 and the passing of the detention order on 15.01.2021.

Conclusion:
The court concluded that the detention order dated 15.01.2021 did not meet the legal requirements for preventive detention. The grounds for detention were stale, illusory, and lacked real nexus with the need for detention. The delay in passing the detention order and the petitioner's medical condition further invalidated the detention. Consequently, the court quashed and set aside the detention order and directed the petitioner's immediate release from custody unless required in any other matter.