2025(04)LCX0267

Navkar Gold

Versus

The Deputy Commissioner (Preventive)

WRIT PETITION (L) NO. 7880 OF 2024 decided on 08-04-2025

2025:BHC-OS:6236-DB

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION

WRIT PETITION (L) NO.7880 OF 2024

Navkar Gold & Anr.                     .. Petitioners

        Versus

The Deputy Commissioner (Preventive),
Jodhpur, & Ors.                     .. Respondents

Mr.Devendra Jain a/w Shashank A. Mehta, Advocates for the Petitioner.

Mr.Jitendra B. Mishra a/w Sangeeta Yadav, Ashutosh Mishra, Rupesh Dubey, Advocates for the Respondents/UOI.

CORAM :B. P. COLABAWALLA &
                FIRDOSH P. POONIWALLA, JJ.

DATE : APRIL 08, 2025

P. C.

1. Rule. Respondents waive service. With the consent of parties, Rule made returnable forthwith and heard finally.

2. The above Writ Petition is filed seeking to quash and set aside the impugned letters dated 11th January 2024 (Exhibit P-1 & Exhibit P-2) issued under Section 110 (5) of the Customs Act, 1962 and release the provisional attachment of the bank accounts of the Petitioners. Exhibit P-1 is a letter dated 11th January 2024 written to the Branch Manager, Kotak Mahindra Bank, Jaipur and Exhibit P-2 is a letter of the very same date written to the Branch Manager, ICICI Bank, Jaipur. The Petitioners have bank accounts in Kotak Mahindra Bank and ICICI Bank. Petitioner No.1 is a Partnership Firm and Petitioner No.2 is a Partner of Petitioner No.1.

3. The short point canvassed before us on which the aforesaid letters are challenged is that under Section 110 (5) of the Customs Act, 1962 a provisional attachment of the bank account can be done only by an order in writing, that too, for a period not exceeding six months. The proviso to Section 110 (5) permits an extension of a further period of six months only if the Principal Commissioner of Customs or Commissioner of Customs, for the reasons to be recorded in writing, extends the period. In the present case, it is the case of the Petitioner that there is no order passed attaching the bank accounts of the Petitioners and in any event, even if such order is passed, the same has never been communicated to the Petitioner. This apart, it is also the case of the Petitioner that now one year has already lapsed from the date of the provisional attachment and under the provisions of Section 110 (5) the attachment cannot continue beyond the period of one year. It is on this basic ground that the letters at Exhibit P-1 & Exhibit P-2 (both dated 11th January 2024) are assailed in the present Writ Petition.

4. On the other hand, Mr. Mishra, the learned counsel appearing on behalf of the Customs Authorities stated that notwithstanding the fact that the one year period has expired, now that a show cause notice has been issued which itself calls upon the Petitioners to show cause as to why the amounts lying in the accounts ought not to be confiscated, there is no question of releasing the attachment. Mr. Mishra also relied upon Section 110A of the Customs Act, 1962 to contend that if a bank account is provisionally attached under Section 110A, pending any order of the Attaching Authority, the same can be released on taking of a bond from the concerned person in the Form with such security and conditions as the Adjudicating Authority may require. In other words, it was submitted by Mr. Mishra that if this Court is inclined to release the provisional attachment, the Petitioner be put to certain terms and conditions especially, in relation to executing a bond and on them furnishing a security.

5. We have heard the learned counsel for the parties and we have also perused the papers and proceedings in the above Writ Petition. By a letter dated 11th January 2024 (Exhibit P-1) the Customs Authorities have informed Kotak Mahindra Bank that in order to protect the interest of the Revenue and in exercise of the powers conferred under Section 110 (5) of the Customs Act, 1962, it is requested to provisionally attach the bank accounts of the Petitioners as more particularly set out in the said letter. What has been informed to the bank is that no debits be allowed in the aforesaid bank accounts. An identical letter is also addressed to the ICICI Bank (Exhibit P-2). Both these letters have been addressed to the banks on 11th January 2024. As on date, admittedly the one year period has expired.

6. Section 110 (5) of the Customs Act, 1962, clearly states that during any proceedings under the Customs Act, 1962, if the proper officer is of the opinion that for the purposes of protecting the interest of the Revenue or preventing smuggling, it is necessary so to do, he may, with the approval of the Principal Commissioner of Customs or the Commissioner of Customs, by order in writing, provisionally attach any bank account for a period not exceeding six months. The proviso to Section 110 (5) further stipulates that the Principal Commissioner of Customs or the Commissioner of Customs may, for reasons to be recorded in writing, extend the initial period of six months by a further period not exceeding six months and inform such extension of time to the person whose bank account is provisionally attached, before the expiry of the period so specified. For the sake of convenience, Section 110 (5) of the Customs Act, 1962, is reproduced hereunder:-

“110. Seizure of goods, documents and things

…..

(5) Where the proper officer, during any proceedings under the Act, is of the opinion that for the purposes of protecting the interest of revenue or preventing smuggling, it is necessary so to do, he may, with the approval of the Principal Commissioner of Customs or Commissioner of Customs, by order in writing, provisionally attach any bank account for a period not exceeding six months:

Provided that the Principal Commissioner of Customs or Commissioner of Customs may, for reasons to be recorded in writing, extend such period to a further period not exceeding six months and inform such extension of time to the person whose bank account is provisionally attached, before the expiry of the period so specified.”

7. From this provision, it is apparent that the provisional attachment under Section 110 (5) cannot continue beyond the period of one year. The reliance placed on Section 110A by Mr. Mishra, is wholly misplaced. Section 110A would come into effect only when a party seeks to raise the provisional attachment of the bank account while the attachments still subsists. Section 110A, in our opinion, would have no application where the attachment has ceased to exist because of the provisions of the Section 110 (5) read with its proviso. To put it in other words, once the period of one year has expired as stipulated under Section 110 (5), then one cannot resort to Section 110A to extend the provisional attachment. Once we are of this opinion, we find that the reliefs sought for raising the attachment of the bank accounts of the Petitioners ought to be granted.

8. Before parting, we must also mention that by the very same letter (Exhibit P-1) the bank account of other parties, namely, Chokshi Arvind Jewellers, M/s. Maxis Bullion and Pallav Gold were also provisionally attached. This Court, after hearing the said parties, by its judgment and order dated 12th March 2024 raised the provisional attachment, albeit on different grounds than the one canvassed before us.

9. In view of the aforesaid discussion, we pass the following order:-

(A) The provisional attachment of the bank accounts of the Petitioners, mentioned in Exhibit P-1 and Exhibit P-2 to the Petition, hereby stands raised. In other words the aforesaid bank accounts are released from the provisional attachment.

(B) The Petitioners are free to operate the aforesaid bank accounts.

(C) It is needless to observe that once the show cause notice is adjudicated, the Respondents are entitled to take whatever steps for recovery, including attachments of these very same bank accounts, if they are entitled to in law.

10. Rule is made absolute in the aforesaid terms and the Writ Petition is also disposed of in terms thereof. However, there shall be no order as to costs.

11. This order will be digitally signed by the Private Secretary/ Personal Assistant of this Court. All concerned will act on production by fax or email of a digitally signed copy of this order.