Girdhari International PVT. LTD vs. Commissioner Of Customs (Export) And Ors

Held

The Court held that the provisional attachment of the petitioner's bank account, dated November 28, 2022, had expired by operation of law. The Court noted that Section 110(5) of the Customs Act, 1962, allows for a provisional attachment for a period not exceeding six months, with a proviso for extension by the Principal Commissioner or Commissioner of Customs for a further period not exceeding six months, with reasons to be recorded in writing and communicated to the affected person. The Court observed that the six-month period from the date of attachment (November 28, 2022) expired on May 28, 2023. The respondents did not dispute that no extension was granted. The Court found it inexplicable why the respondents failed to unfreeze the bank account despite multiple letters from the petitioner after the expiry of the statutory period. The Court emphasized that the respondents were duty-bound to respond and should have suo motu defreezed the account. This inaction was considered contrary to the government's policy of ease of doing business. Consequently, the Court quashed and set aside the provisional attachment and directed the respondents to inform the bank to withdraw the attachment within one week.

Facts

The petitioner, Girdhari International Pvt. Ltd., engaged in import and export of readymade garments and textiles, filed a writ petition challenging a provisional attachment order dated November 28, 2022, issued by Respondent No. 2 under Section 110(5) of the Customs Act, 1962. This order provisionally attached the petitioner's bank account. The petitioner had been served summons under Section 108 of the Customs Act on October 21, 2022, and November 28, 2022, requesting documents like purchase orders, invoices, and GST details. The petitioner complied with these requisitions between December 2022 and May 2023. Subsequently, the petitioner made multiple requests, starting April 26, 2023, to lift the attachment, citing compliance and severe business impact. However, the respondents did not respond to these requests, leading to the present petition.

Key Issues

1. Whether the provisional attachment of the petitioner's bank account, initiated on November 28, 2022, under Section 110(5) of the Customs Act, 1962, has expired by operation of law due to the lapse of the statutory six-month period without any valid extension. The petitioner argued that Section 110(5) of the Customs Act, 1962, mandates that a provisional attachment of a bank account cannot exceed six months unless extended by the Principal Commissioner of Customs. The petitioner contended that since the six-month period from November 28, 2022, had expired without any communicated extension, the attachment automatically lapsed by operation of law. They relied on Section 110(5) of the Customs Act. The respondents did not dispute that the six-month period had expired and that no further extension had been granted as required by the proviso to Section 110(5) of the Customs Act.