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TMI Blog2025 (4) TMI 1250X X X X Extracts X X X X X X X X Extracts X X X X ..... and consequently direct the Respondent No. 3-5 to defreeze the Petitioners' bank accounts as mentioned in the table of Para No. 1 above and (Reproduced below for ready reference) Sr. No. Name of the A/c Holder Account No. IFSC Code 1 Mundra Exim Pvt. Ltd. 603105265939 ICICI0006031 2 Mundra Agro Foods LLP 603105255414 ICICI0006031 3 Mundra Agro Foods LLP 3247753210 KKBK0000464 4 Mundra Exim Pvt. Ltd. 09745100000116 DCBL0000097 (c) Pass such further or other orders as may be deemed fit and proper in the interest of justice. (d) Allow the petition with costs." 3. Facts draped in brevity, as per pleadings of the parties, which are necessary for the disposal of the present petition are being reproduced as hereunder:- i. Petitioners are importer of Sri Lankan-origin edible goods, specifically Areca Nuts, which had sought exemption benefits under the Indo-Sri Lanka Free Trade Agreement (ISLFTA). ii. During an investigation into F. No. DRI /IZU /CI /INT-77(2023) /ENQ-52), Respondents scrutinized the past imports done by Petitioners in November, 2022 and it was noticed that petitioners had imported 4 consignments of Areca-Nuts in the past, declaring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther argued that the pendency of the proceedings of section 28, 28AAA or 28 B of the Customs Act is the pre-requisite mandate for invoking the provisions of section 110(5) of the Customs Actin view of conjoint reading of Section 28 BA r/w 110(5) of Customs Act, 1962, which in this case were admittedly not pending before adjudicating Authority as no show cause notice under Section 28, 28AAAor 28-B of Customs Act, 1962 was issued to petitioners for initiating such proceedings. The investigation which the Respondent Authorities are carrying out cannot be equated with the pendency of proceedings and hence provisional attachment in absence of pending proceedings is without jurisdiction. Reliance has also been placed upon Circular No. 10/2008-Customs and F.No.401/7/2004-Cus.III(Pt.) dated 30.06.2008 issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board of Excise & Customs (Annexure P/12) wherein it has been specifically instructed that the proceedings for provisional attachment can be initiated only after issue of SCN under Section 28, 28AAA or 28B of Customs Act, 1962 and it is argued that the respondents have failed to comply the said circular w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned attachment order dated 03.12.2024. To bolster this submission, reliance has been placed on judgment of Hon'ble Apex Court in Commissioner of Customs, Mumbai v. M.M.K Jewellers & Anr 2008 (5) SCC 617 and Uniworth textiles Ltd. v. Commissioner of Central Excise, Raipur 2013(9) SCC 753. 7. Per Contra, learned Counsel for Respondents has argued that the present petition is not maintainable in view of alternative remedies being available to the petitioners under Section 110A of Customs Act, 1962. On merits, it has been argued that the petitioners have not challenged the basic order dated 02.12.2024 on the basis of which impugned intimation dated 03.12.2024 has been issued, and hence the present petition is not maintainable in view of law laid down by Hon'ble Apex Court in Hindustan Commercial Corporation Pvt. Ltd. Vs. State of M.P 2025 (1) JLJ 54. It has been argued that Note sheet/ Approval dated 02.12.2024 (Annexure R/1) records subjective satisfaction and reasons for provisionally attaching the bank account of the petitioner and hence all the legal requirement have been complied with before issuance of the impugned intimation under Section 110(5) of Customs Act, 1962. However, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.12.2024 as the same stood merged with impugned intimation dated 03.12.2024. 11. So far as the objection of Respondents regarding the maintainability of the petition in view of availability of alternative efficacious remedy is concerned, it has been settled by catena of decisions that the availability of alternative remedy is not an absolute bar for granting relief in the exercise of power under Article 226 of the Constitution of India as the same is a rule of convenience and self imposed restriction and there are certain exceptions to the said rule, namely:- i. The writ petition has been filed for the enforcement of any of the Fundamental Rights protected by Part III of the Constitution ii. There has been a violation of the principle of natural justice iii. The order or proceedings are wholly without jurisdiction. iv. the vires of an Act is challenged. (Vide Harbanslal Sahnia v Indian Oil Corpn. Ltd, (2003) 2 SCC 107) 12. At this juncture fruitful reference can be made tojudgment of Hon'ble Supreme Court in the case of "M/s Radha Krishan Industries v. State of H.P. (2021) 6 SCC 771", relied upon by the counsel for the petitioners whichhas extensively addressed the obj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot maintainable; iv) The power to order a provisional attachment of the property of the taxable person including a bank account is draconian in nature and the conditions which are prescribed by the statute for a valid exercise of the power must be strictly fulfilled; v) The exercise of the power for ordering a provisional attachment must be preceded by the formation of an opinion by the Commissioner that it is necessary so to do for the purpose of protecting the interest of the government revenue. Before ordering a provisional attachment the Commissioner must form an opinion on the basis of tangible material that the assessee is likely to defeat the demand, if any, and that therefore, it is necessary so to do for the purpose of protecting the interest of the government revenue. vi) The expression "necessary so to do for protecting the government revenue" implicates that the interests of the government revenue cannot be protected without ordering a provisional attachment; vii) The formation of an opinion by the Commissioner under Section 83(1) must be based on tangible material bearing on the necessity of ordering a provisional attachment for the purpose of protecting the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this petition would be maintainable and liable to be entertained by this court. 14. Before adverting the aspect that whether the impugned intimation/attachment order dated 03.12.2024 issued under Section 110(5) of Customs Act, 1962 has been issued without jurisdiction or not? it would be apposite to reproduce relevant excerpts of legal provisions of Customs Act, 1962 and Circular No. 10/2008-Customs and F.No.401/7/2004-Cus.III(Pt.) dt. 30.06.2008 issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board of Excise & Customs, interpretation of which is essential to adjudicate the controversy involved in the present lis. Relevant Legal Provisions 28. Recovery of [duties not levied or not paid or short-levied or short-paid] or erroneously refunded.- (1) Where any [duty has not been levied or not paid or short-levied or short-paid] erroneously refunded, or any interest payable has not been paid, part-paid or erroneously refunded, for any reason other than the reasons of collusion or any wilful mis-statement or suppression of facts, - (a) the proper officer shall, within [two years] from the relevant date, serve notice on the person chargeable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any duty has not been [levied or not paid or has been short-levied or short-paid]or erroneously refunded, or interest payable has not been paid, part-paid or erroneously refunded, by reason of,- (a) collusion; or (b) any wilful mis-statement; or (c) suppression of facts, by the importer or the exporter or the agent or employee of the importer or exporter, the proper officer shall, within five years from the relevant date, serve notice on the person chargeable with duty or interest which has not been [so levied or not paid] or which has been so short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice. (5) Where any [duty has not been levied or not paid or has been short-levied or short paid] or the interest has not been charged or has been part-paid or the duty or interest has been erroneously refunded by reason of collusion or any wilful mis-statement or suppression of facts by the importer or the exporter or the agent or the employee of the importer or the exporter, to whom a notice has been served under subsection (4) by the proper officer, such person may pay the du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mine the amount of duty or interest under sub-section (8),- (a) within six months from the date of notice, in respect of cases falling under clause (a) of sub- section (1); (b) within one year from the date of notice, in respect of cases falling under sub-section (4). [Provided that where the proper officer fails to so determine within the specified period, any officer senior in rank to the proper officer may, having regard to the circumstances under which the proper officer was prevented from determining the amount of duty or interest under subsection (8), extend the period specified in clause (a) to a further period of six months and the period specified in clause (b) to a further period of one year: [Provided further that where the proper officer fails to determine within such extended period, such proceeding shall be deemed to have concluded as if no notice had been issued;] [(9A) Notwithstanding anything contained in sub-section (9), where the proper officer is unable to determine the amount of duty or interest under sub-section (8) for the reason that- (a) an appeal in a similar matter of the same person or any other person is pending before the Appellate Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eans, (a) in a case where duty is[not levied or not paid or short-levied or short-paid], or interest is not charged, the date on which the proper officer makes an order for the clearance of goods; (b) in a case where duty is provisionally assessed under section 18, the date of adjustment of duty after the final assessment thereof or reassessment, as the case may be; (c) in a case where duty or interest has been erroneously refunded, the date of refund; (d) in any other case, the date of payment of duty or interest. .......... 28AAA. Recovery of duties in certain cases.- (1) Where an instrument issued to a person has been obtained by him by means of - (a) collusion; or (b) wilful mis-statement; or (c) suppression of facts, for the purposes of this Act or the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992), by such person or his agent or employee and such instrument is utilised under the provisions of this Act or the rules made or notifications issued there under, by a person other than the person to whom the instrument was issued, the duty relatable to such utilisation of instrument shall be deemed never to have been exempted or debited and such d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [Principal Commissioner of Customs or Commissioner of Customs], by order in writing, attach provisionally any property belonging to the person on whom notice is served under [sub-section (1) or sub-section (4) of section 28] [or subsection (3) of section 28AAA or sub-section (2) of section 28B], as the case may be, in accordance with the rules made in this behalf under section 142. (2). Every such provisional attachment shall cease to have effect after the expiry of a period of six months from the date of the order made under sub-section (1): Provided that the [Principal Chief Commissioner of Customs or Chief Commissioner of Customs] may, for reasons to be recorded in writing, extend the aforesaid period by such further period or periods as he thinks fit, so, however, that the total period of extension shall not in any case exceed two years: Provided further that where an application for settlement of case under section 127B is made to the Settlement Commission, the period commencing from the date on which such application is made and ending with the date on which an order under sub-section (1) of section 127C is made shall be excluded from the period specified in the preced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing before such Commissioner of Customs, in which case he shall himself make the order of attachment in accordance with the procedure set out in para (iv) below. ................... Note:- At the time of issuance of this circular, Section 100(5) of Customs Act, 1962 had not been enacted and was inserted vide Finance (No. 2) Act, 2019(23 of 2019), dt. 01.08.2019, w.e.f. 01.08.2019. 15. Before analysing and interpreting the aforesaid provisions of law, it would be apposite to refer to rules laid down by Hon'ble Apex Court in Chief Commissioner of Central Goods and Service Tax & Ors. Vs. M/s Safari Retreats Private Ltd. & Ors.(2025) 2 SCC 523, pertaining to interpretation of taxing statutes, which are being reproduced as hereunder:- "RULES REGARDING THE INTERPRETATION OF TAXING STATUTES 25. Regarding the interpretation of taxation statutes, the parties have relied on several decisions. The law laid down on this aspect is fairly well-settled. The principles governing the interpretation of the taxation statutes can be summarised as follows:- a. A taxing statute must be read as it is with no additions and no subtractions on the grounds of legislative intendment or otherwise; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 110(5) of Customs Act, 1962 making it a condition precedent that provisional attachment of bank account can be done during pendency of any proceedings under the Customs Act, 1962. Pertinently, Section 110(5) has been introduced vide Finance (No. 2) Act, 2019(23 of 2019), dated 01.08.2019, prior to which the relevant provision for provisional attachment was Section 28 BA. In Section 25 BA, the word "proceedings" has been used in reference to proceedings under "Section 28, or Section 28AAA or Section 28B".Hence, in the considered opinion of this court, the word "proceedings" which finds mention in Section 110(5) of Customs Act, 1962 is referrable to proceedings initiated under "Section 28, or Section 28AAA or Section 28B". 17. In view of conclusion arrived by this court hereinabove, a bare reading of Section 28, or Section 28AAA or Section 28B would reveal that the proceedings under the said Sections would commence only after issuance of Show Cause Notice as provided under the said Sections. Furthermore, as per Circular No. 10/2008-Customs and F.No.401/7/2004-Cus.III(Pt.) dated 30.06.2008 issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondents in provisionally attaching the bank accounts of the petitioners by finding out ways to keep the bank accounts of petitioners remain provisionally attached for a period of more than one year in order to circumvent statutory restriction provided under Section 110(5) of Customs but since this court has already held hereinabove that the provisional attachment of bank accounts during investigation is itself without jurisdiction, the said question does not require consideration for the adjudication of the present petition and the same is left open in peculiar facts and circumstances of the present case. 21. So far as the plea of petitioners that the impugned attachment order is time barred as Respondents exceeded the statutory limitation period of 2 years as prescribed under Section 28 of the Act is concerned, the petitioner has neither pleaded specifically nor established as to what is the "relevant date" from which the limitation would start to run in terms of Section 28. Even otherwise the said question also does not warrant consideration for the adjudication of the present petition as the said limitation has been provided for initiation of proceedings under Section 28 by iss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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