Court allows delayed filing, directs Customs Department to unfreeze account, DGFT resumes issuing "scrips."

The High Court condoned the delay in filing the counter affidavit and disposed of the application. The court directed the Customs Department to de-freeze the bank account and issue operational instructions following the completion of the investigation and issuance of a show cause notice. The DGFT resumed issuing "scrips" to the petitioner, resolving that grievance. The court emphasized the need for legal justifications and ordered the immediate de-freezing of the bank account with operational instructions.

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Issues:
1. Delay in filing counter affidavit.
2. Freezing of bank account and availing duty drawback benefit.
3. DGFT stopping issuance of "scrips" to the Petitioner.
4. Justification for freezing bank account.
5. Completion of investigation and issuance of show cause notice.
6. De-freezing of bank account and operational instructions.

Analysis:

1. Delay in filing counter affidavit:
The High Court condoned the delay of 23 days in filing the counter affidavit and disposed of the application.

2. Freezing of bank account and availing duty drawback benefit:
The petitioner, AKS Apparels, filed a writ petition against the Commissioner of Customs and the Director General of Foreign Trade (DGFT) regarding the freezing of their bank account and the restraint from availing the duty drawback benefit. The Customs Department justified its actions as a pre-emptive measure to stop fraud. However, with the completion of the investigation and issuance of a show cause notice, the court directed the Customs Department to de-freeze the bank account and issue operational instructions to the bank.

3. DGFT stopping issuance of "scrips" to the Petitioner:
The DGFT had stopped issuing "scrips" to the petitioner, but during the pendency of the petition, it resumed issuing them. Therefore, this grievance was considered resolved.

4. Justification for freezing bank account:
The Customs Department justified the freezing of the bank account as a measure to safeguard government revenue. However, the court noted that there was no mention of any specific provision of law justifying this action. With the completion of the investigation and issuance of the show cause notice, the justification for continuing the freezing of the bank account was deemed invalid.

5. Completion of investigation and issuance of show cause notice:
The investigation was completed, and a show cause notice was issued to the petitioner. The notice did not mention the freezing of the bank account, indicating that there was no legal basis for continuing the freeze.

6. De-freezing of bank account and operational instructions:
The High Court directed the immediate de-freezing of the petitioner's bank account and instructed the Customs Department to issue appropriate instructions to the bank. If the instructions were not issued by a specified date, the bank was directed to allow the petitioner to operate the account based on the court order.

This judgment addressed the grievances raised by the petitioner regarding the freezing of their bank account and the restraint on availing duty drawback benefits. The court emphasized the importance of legal justifications for such actions and ordered the immediate de-freezing of the bank account with operational instructions to be provided by the Customs Department.

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