Fariyad Alam vs. The Union Of INDIA

Held

The Court held that the confiscation order dated 22.12.2023 was bad in law and quashed it. The reasoning was primarily based on the violation of Section 125(3) of the Customs Act, 1962. The Court noted that the seized goods were e-auctioned within 29 days of the dispatch of the confiscation order, which was significantly less than the statutory period of 120 days provided for redemption of goods, unless an appeal was pending. This premature sale was found to be a clear violation of the statutory provision and principles of natural justice. The Court also observed that the confiscation order was passed in "hot haste" during the pendency of the writ application. Although the Court acknowledged that the wheat was sold for Rs. 31,678, it directed the respondents to pay the total value of the wheat (Rs. 46,200) along with interest at 6% per annum from the date of seizure until payment, within six weeks. The Court also awarded litigation costs of Rs. 5,000 to the petitioner. The issue of the competency of the seizing officer was implicitly addressed by the Court's focus on the procedural violations post-seizure and the subsequent confiscation and sale.

Facts

The petitioner, Fariyad Alam, challenged the seizure of 35 bags of wheat (totaling 1925 kg) and the vehicle used for transport by the Assistant Sub-Inspector of the Sashastra Seema Bal (SSB) on April 21, 2023. The petitioner claimed the wheat was being transported with a valid GST invoice. During the pendency of the writ petition, an order of confiscation dated December 22, 2023, was passed by the Deputy Commissioner, Department of Customs, Motihari, confiscating the seized goods (valued at Rs. 46,200) and the conveyance (valued at Rs. 3,20,000). The petitioner sought to quash this confiscation order and an e-auction order dated February 1, 2024, which sold the seized goods for Rs. 31,678. The petitioner argued that the seizure was illegal due to lack of proper reasons in the seizure memo and the alleged incompetence of the seizing officer. The respondents later stated that the conveyance was released upon payment of a penalty, but the wheat was e-auctioned.

Key Issues

1. Whether the seizure memo dated 21.04.2023, which allegedly failed to duly show the reasons for seizure as required by Section 110 of the Customs Act, 1962, is valid? 2. Whether the Assistant Sub-Inspector of SSB, who effected the seizure, was competent and had the jurisdiction to do so under Section 110 of the Customs Act, 1962, considering the relevant notifications? 3. Whether the confiscation order dated 22.12.2023 and the subsequent e-auction of the seized goods were passed in violation of Section 125(3) of the Customs Act, 1962, and principles of natural justice? Petitioner's arguments: The petitioner contended that the seizure memo lacked proper reasons as mandated by Section 110 of the Customs Act, 1962, citing previous High Court judgments where similar seizure memos were quashed. They argued that the Assistant Sub-Inspector was not competent to effect the seizure under Section 110. Furthermore, the petitioner asserted that the confiscation order and the e-auction were passed in "hot haste" and in violation of Section 125(3) of the Customs Act, 1962, which provides a statutory period for redemption of goods, and also violated principles of natural justice. They relied on their GST invoice and bill of supply to show legitimate transport. Revenue's arguments: The respondents argued that the SSB officers were authorized to exercise functions of a Customs Officer under Section 6 of the Customs Act, 1962, based on Notification No. 99/2014-CUSTOMS (N.T.), which entrusted functions under Sections 100, 102, 106, and 110 of the Act to Inspectors and Sub-Inspectors. They also stated that options were provided to redeem the goods and conveyance.