2025 (3) TMI 1205 - HC - Customs

Seeking issuance of an appropriate writ directing the Respondent to release the electronic devices of the Petitioners - smuggling of substantial quantity of foreign origin gold in a completely concealed manner through triangular valves - HELD THAT - If any particular document which is downloaded from the devices of the Petitioners is also relied upon by the Respondent either in the show cause notice proceedings or in the prosecution complaint the said Relied Upon Documents (RUDs) shall be listed and copies shall be provided to the Petitioners. In light of the above the Petitioner would not raise any objections as to non-fulfilment of any requirement under Section 63 of the Bharatiya Sakshya Adhiniyam 2023 and Section 138C of the Customs Act 1962. This process could be adopted by the Commissioner of Customs in all the Commissionerates so that persons from whom devices are seized can be returned the same after the data is copied. The retention of the devices throughout the Show Cause Notice (SCN) proceedings and the prosecutions unless essential could then be avoided as the devices themselves may become completely out-dated and retrieval of data from the same after a few years also becomes difficult. The proper copying of the data and retention of the same on Servers in the Customs Department would also make it accessible to the investigation officers as also other personnel. Conclusion - The return of electronic devices ordered after data copying with the Petitioners agreeing not to object to the data s mode of proof. A standard procedure for data retrieval and preservation was recommended. Petition disposed off.

ISSUES PRESENTED and CONSIDERED

The core legal issues considered in this judgment include:

Whether the electronic devices seized from the Petitioners should be returned to them after the conclusion of the investigation and issuance of show cause notices.
The appropriate method for handling and preserving electronic evidence, particularly in the context of the Customs Act, 1962, and the Delhi High Court (Original Side) Rules, 2018.
The implications of retaining electronic devices throughout the prosecution and show cause notice proceedings.

ISSUE-WISE DETAILED ANALYSIS

1. Return of Seized Electronic Devices

Relevant Legal Framework and Precedents: The legal framework involves Article 226 and 227 of the Constitution of India, which empowers the court to issue writs. The Customs Act, 1962, particularly Section 108, is relevant as it governs the recording of statements and seizure of goods.
Court's Interpretation and Reasoning: The Court considered that the investigation had concluded and show cause notices had been issued. The Petitioners argued for the return of their devices, agreeing to the Department copying the data.
Key Evidence and Findings: The devices were initially seized as part of an investigation into smuggling activities. The Petitioners consented to data copying, which the Respondent had already undertaken.
Application of Law to Facts: The Court found that retaining the devices was unnecessary if the data could be properly copied and preserved, thus allowing the devices to be returned.
Treatment of Competing Arguments: The Respondent's concern about potential objections to data admissibility was addressed by ensuring data integrity through hashing and verification.
Conclusions: The Court concluded that the devices should be returned after data copying, with the Petitioners agreeing not to object to the data's mode of proof.

2. Preservation and Proof of Electronic Evidence

Relevant Legal Framework and Precedents: The Delhi High Court (Original Side) Rules, 2018, provide guidelines for tendering electronic records, emphasizing data integrity through encryption and hash values.
Court's Interpretation and Reasoning: The Court highlighted the established methods for proving electronic data, suggesting that data be copied onto a CD or pen drive with a hash value to ensure integrity.
Key Evidence and Findings: The Respondent had cloned the devices, and the Petitioners were willing to verify the copied data.
Application of Law to Facts: The Court applied the rules to ensure that electronic evidence could be reliably preserved and presented in future proceedings.
Treatment of Competing Arguments: The Petitioners' agreement to the data copying process mitigated potential disputes over data integrity.
Conclusions: The Court directed that data be copied and verified, allowing the devices' return while maintaining evidence integrity.

3. Implications of Device Retention

Relevant Legal Framework and Precedents: The Customs Act, 1962, governs the retention of goods, but the Court considered practical implications of retaining devices.
Court's Interpretation and Reasoning: The Court reasoned that retaining devices could lead to obsolescence and data retrieval issues, advocating for data copying and storage on servers.
Key Evidence and Findings: Retention of devices was deemed unnecessary if data could be properly preserved.
Application of Law to Facts: The Court applied practical considerations to avoid unnecessary retention, ensuring data accessibility for investigation purposes.
Treatment of Competing Arguments: The Court balanced the Respondent's need for evidence with the Petitioners' rights to their property.
Conclusions: The Court concluded that devices should be returned after data copying, suggesting a standard procedure for future cases.

SIGNIFICANT HOLDINGS

Preserve verbatim quotes of crucial legal reasoning: "The mode and manner of proving electronic data is well-established both under statutes as also in several judgments."
Core principles established: Electronic devices should be returned after data is copied and verified, ensuring data integrity through hashing. Retention of devices should be avoided unless essential.
Final determinations on each issue: The Court ordered the return of electronic devices after data copying, with the Petitioners agreeing not to object to the data's mode of proof. A standard procedure for data retrieval and preservation was recommended.