2023 (8) TMI 755 - HC - Customs

Provisional release of goods - Smuggling - Gold - reliance placed on voluntary statements - Conducting an adjudication in an application filed under Section 110A of Customs Act - HELD THAT - A reading of Section 110A of Customs Act establishes that the adjudicating authority has been conferred with the power to provisionally release any goods, documents, things seized or bank accounts to the owner or the bank account holder, on taking a bond from him in the proper form with such security and conditions as the adjudicating authority may require - the provision read with Section 122A of the Act clearly establishes that during the pendency of the adjudicating procedure, the adjudicating authority has the power to provisionally release the things enumerated under Section 110A of the Act, on taking a bond and/or security. On an overall appreciation of the statutory provisions, its interpretations, the guidelines laid down by the CBEC, leads me to irresistible conclusion that the Act of adjudicating authority in deciding an application for provisional release is adjudicating procedure and not a ministerial act as contended by the respondents. Therefore, the adjudicating authority is bound to adhere to the elementary principles of natural justice by adverting to the contentions raised in an application seeking provisional release and afford the applicant an opportunity of being heard. The finding of the second respondent in Ext P5 is erroneous, wrong and in blatant violation of the rudimentary principles of natural justice. Ext P4 application is to be directed to be considered by the adjudicating authority, constituted under Section 110A of the Act - adjudicating authority constituted under Section 110A of the Act, is directed to consider and dispose of Ext P4 application, in accordance with law and as expeditiously as possible, at any rate, within a period of one month from the date of receipt of a certified copy of this judgment, after affording the petitioner an opportunity of being heard - petition disposed off.

Summary

Issues involved:
The judgment involves the quashing of Ext P5 order passed by the second respondent regarding the provisional release of seized goods under Section 110A of the Customs Act, 1962.

Summary:

Issue 1 - Quashing of Ext P5 Order:
The petitioner, a registered dealer of gold, bullion, and jewels, filed a writ petition to challenge the Ext P5 order passed by the second respondent, which rejected the petitioner's application for the provisional release of seized gold. The petitioner had sold gold bullions to a company, which were seized by the police. The petitioner had filed various applications seeking release, but they were rejected. The petitioner contended that Ext P5 order was illegal and erroneous.

Issue 2 - Legal Arguments:
The petitioner argued that Ext P5 order was passed without considering the petitioner's contentions and without affording an opportunity of being heard. The petitioner relied on legal precedents and guidelines to support the claim that the adjudicating authority must follow natural justice principles. The respondents contended that there was no need for adjudication in such cases and that the power under Section 110A is provisional.

Issue 3 - Statutory Provisions and Guidelines:
The judgment referred to Section 110A, Section 122A, and the guidelines issued by the CBEC regarding provisional release of seized goods. It highlighted that the adjudicating authority has the power to provisionally release goods pending adjudication, subject to certain conditions. The judgment emphasized that the adjudicating authority must adhere to natural justice principles and consider the applicant's contentions.

Issue 4 - Judicial Interpretation:
The judgment cited decisions from the High Courts of Punjab & Haryana and Bombay, which emphasized that the power to allow provisional release is quasi-judicial in nature and must consider various factors. It concluded that the adjudicating authority's decision on provisional release is part of the adjudicating procedure, requiring adherence to natural justice principles.

Conclusion:
The judgment set aside Ext P5 order and directed the adjudicating authority under Section 110A to consider and dispose of the petitioner's application in accordance with the law, affording the petitioner an opportunity to be heard. It clarified that the judgment did not express any opinion on the merits of the application.