2015 (2) TMI 31 - HC - Customs

Court overturns order on seized cash return, stresses summons compliance under Customs Act Section 108.

The Court set aside the Learned Single Judge's order directing the return of the seized cash of Rs. 7,00,000 from the respondent's office. The Court ... Seizure of cash - Cash seized on suspicion - Petition filed without answering the summons - Held that:- Respondent had not responded to the five summons issued to him by the concerned officer of the Department (beginning from 16.07.2014 to 14.08.2014) and instead he filed W.P.No.22700 of 2014 before this Court on 18.08.2014. The Respondent/Petitioner is obliged to attend in pursuance to the summons issued under Section 108 of the Customs Act and is expected to state the truth and further he is to appear before the officer concerned in obedience to the summons issued and in compliance with law. Without making his appearance before the concerned officer and avoiding the five summons issued, the filing of Writ Petition by the Respondent/Petitioner is a premature and otiose one. Ordinarily, as against the issuance of summons, a Writ Petition would not lie. When the Respondent had not participated in the enquiry/investigation proceedings by dissuading the five summons issued to him, then, the filing of the Writ Petition by him is devoid of merits, in the considered opinion of this Court. In view of the fact that the Learned Single Judge had not borne in mind the ingredients of sub-section (3) of Section 108 of the Customs Act, 1962 which makes it mandatory upon the person summoned under that Act to state the truth upon any subject respecting which he is examined or makes a statement, this Court comes to an inevitable and irresistible conclusion that the views taken by the Learned Single Judge that 'Suspicion cannot take the place of proof, however, strong it may be. Therefore, refusing to order the provisional release of the cash seized from the premises of the petitioner in the second writ petition, may give a leverage or licence to the Respondents to stamp any item or cash seized from any office premises as the sale proceeds of smuggled goods' and consequently, allowing the said Writ Petition by directing the Appellants to return the amount of ₹ 7 ,00,000 /- of Indian currency seized from the office premises of the Petitioner on 24.06.2014 etc., are clearly unsustainable in the eye of law. Furthermore, the observation of the Learned Single Judge in the Writ Petition to the effect that 'The Constitutional guarantee with respect to the right to property under Article 300A cannot be allowed to be infringed at the drop of the hat, by allowing the officers to walk into any office and seize cash on the ground that they represent the sale proceeds of the smuggled goods.' is not a correct and legally valid one, in the considered opinion of this Court, based on the facts and circumstances of the present case which float on the surface. Viewed in that perspective, this Court, to prevent an aberration of justice and in furtherance of substantial cause of justice, interferes with the said order dated 08.10.2014 passed by the Learned Single Judge in [2015 (1) TMI 1100 - MADRAS HIGH COURT] and sets aside the same. - Petition disposed of. Issues Involved:1. Legitimacy of the seizure of Rs. 7,00,000 from the respondent's office.2. Respondent's non-compliance with summons issued under Section 108 of the Customs Act, 1962.3. The validity of the Learned Single Judge's order directing the return of the seized cash.4. The applicability of Sections 113, 121 to 124 of the Customs Act, 1962.5. The constitutional guarantee under Article 300A regarding the right to property.Detailed Analysis:1. Legitimacy of the Seizure of Rs. 7,00,000:The Learned Single Judge observed that the cash seized from the respondent's office was based on suspicion, which cannot replace proof. The Judge noted that the refusal to order the provisional release of the cash might allow authorities to label any seized cash as proceeds of smuggled goods without proper evidence. The scheme of Sections 113 read with Sections 121 to 124 of the Customs Act does not authorize such actions without satisfying the preconditions for invoking Section 121. The Judge directed the return of the seized amount within two weeks, subject to the respondent executing a personal bond to deposit the amount if an order of adjudication is passed against them.2. Respondent's Non-Compliance with Summons:The Appellants argued that the respondent failed to answer five summons issued between 16.07.2014 and 14.08.2014, instead filing a writ petition without valid cause. The respondent did not substantiate the origin of the seized cash and avoided participating in the investigation proceedings. The Court emphasized that under Section 108 of the Customs Act, it is mandatory for a person summoned to state the truth and appear before the officer. Failure to comply with the summons has necessary consequences, and the respondent's actions were deemed premature and otiose.3. Validity of the Learned Single Judge's Order:The Appellants contended that the Learned Single Judge's order was flawed as it did not consider the mandatory requirement under sub-section (3) of Section 108 of the Customs Act for the summoned person to state the truth. The Court found the Judge's view that 'Suspicion cannot take the place of proof' and the directive to return the seized cash unsustainable in law. The Court also noted that the reference to Sections 113, 121 to 124 was irrelevant at the pre-adjudication stage.4. Applicability of Sections 113, 121 to 124 of the Customs Act:The Court observed that the issuance of five summons to the respondent was at the pre-adjudication stage. The Learned Single Judge's reference to the scheme of Sections 113, 121 to 124 was not quite relevant to the facts of the present case. The Court emphasized that the proper officer has the power to seize goods under Section 110 if there is a reasonable belief that the goods are liable for confiscation, which does not require proof at the seizure stage.5. Constitutional Guarantee under Article 300A:The Learned Single Judge had opined that the constitutional guarantee regarding the right to property under Article 300A cannot be infringed by allowing officers to seize cash on the suspicion of it being proceeds of smuggled goods. However, the Court found this view incorrect and legally invalid based on the case's facts. The Court highlighted that the existence of a belief is a pre-condition for seizure, and there must be some material to form a reasonable belief, which is not subject to judicial review for sufficiency.Conclusion:The Court set aside the Learned Single Judge's order dated 08.10.2014 and directed the Appellants to issue a fresh summon to the respondent specifying the date, time, and place for appearance. The respondent is directed to comply with the summons and may raise all factual and legal pleas during the proceedings. The Writ Appeal is disposed of with no costs, and the connected Miscellaneous Petition is closed.