2023 (11) TMI 491 - HC - Customs

Seeking release of provisionally attached Bank Account of petitioner - continuation for a period exceeding six months under sub-section (5) of Section 110 of the Customs Act, 1962 - HELD THAT - The provisional attachment is dated 28th November 2022 and six months period expired on 28th May 2023. The petitioner vide various letters dated 1st July 2023, 25th September 2023 and 18th October 2023 requested for lifting the said attachment. However, the respondents have not replied to the same. There is also no extension as required under the first proviso to Section 110(5) of the Customs Act. Therefore by operation of law, provisional attachment has expired and same is required to be defreeze. It was incumbent upon the respondents and they were duty bound to respond to the letters for defreezing the bank account and more particularly since the period of 6 months had expired and there was no further extension - The respondents have failed in their duty by not defreezing the bank account after the expiry of 6 months, which they should have done suo-moto, but have failed to do so inspite of various letters written by the petitioner. Such inaction of the respondents have led to the present petition being filed before this Court. Not responding to the reminders for defreezing the account after the expiry of the statutory period of 6 months would also be contrary to the policy of the Government of ease of doing business. The provisional attachment dated 28th November 2022 has expired and is set aside - petition disposed off.

Summary

Issues Involved:
The judgment involves the legality of the provisional attachment of a bank account under Section 110(5) of the Customs Act, 1962, and the failure of the respondents to respond to requests for lifting the attachment within the stipulated time frame.

Comprehensive Details:

Issue 1: Provisional Attachment of Bank Account
The petitioner, engaged in import and export business, challenged the provisional attachment of their bank account by Respondent No. 2 under Section 110(5) of the Customs Act, 1962. The petitioner contended that the six-month period for provisional attachment had expired, as per the law, on 28th May 2023. Despite multiple requests to lift the attachment, the respondents did not respond. The court noted that the respondents failed to extend the attachment as required by law and did not defreeze the account even after the expiry of the statutory period. The court held that the provisional attachment had expired by operation of law and ordered the attachment to be quashed and set aside. The respondents were directed to inform the bank to withdraw the attachment within one week.

Issue 2: Legal Provisions and Duty of Respondents
The court referred to Section 110(5) of the Customs Act, which allows provisional attachment for six months, extendable for another six months with reasons recorded in writing. The court emphasized that the respondents were duty-bound to respond to requests for defreezing the account, especially after the expiry of the initial six-month period. The court criticized the respondents for failing to defreeze the account despite reminders from the petitioner, stating that such inaction goes against the government's policy of ease of doing business. The court concluded that the respondents' failure to act necessitated the filing of the petition and ordered the attachment to be lifted.

Conclusion:
The High Court of Bombay, in a judgment delivered by G.S. Kulkarni & Jitendra Jain, JJ., quashed and set aside the provisional attachment of the petitioner's bank account under the Customs Act, 1962. The court highlighted the legal provisions governing provisional attachments and the duty of the respondents to respond to requests for lifting such attachments within the stipulated time frame. The court's decision was based on the expiration of the statutory period for the attachment and the respondents' failure to extend or lift it accordingly.