Preventive detention under COFEPOSA failed for lack of live link and ignored material facts, leading to quashing of the order.

Preventive detention under COFEPOSA was found unsustainable because the detaining authority lacked a live link between the alleged prejudicial acts and the detention order, and relevant material facts were not properly considered. The alleged licence and script tampering had been discovered long before the order, with no intervening prejudicial conduct shown; the payment under protest, revocation of the customs broker licence, and material linking another G-Card holder to the transactions were also overlooked. The Court further noted that the alleged EDI hacking was unexplained and that the role of customs officers remained under investigation, weakening any basis for satisfaction that the detenue would continue prejudicial activity. The detention order was quashed and rejection of the representation set aside.

---

---

Issues: Whether the detention order passed under the Conservation of Foreign Exchange and Prevention of Smuggling Act was vitiated for want of a live link between the alleged prejudicial activity and the order, non-consideration of material facts, and absence of material to support the satisfaction that the detenue was likely to continue prejudicial activity.

Analysis: The material placed before the detaining authority showed that the alleged tampering with licences/scripts was discovered long before the detention order, yet no intervening prejudicial activity by the detenue was shown. Relevant facts, including the payment made under protest, the revocation order concerning the customs broker licence, and the materials indicating that another G-Card holder was connected with the relevant transactions, were not properly considered. The Court also noted that the alleged hacking of the EDI system was not satisfactorily explained and that the role of customs officers was still under investigation, which weakened the conclusion that the detenue had the capacity or propensity to continue such acts. In these circumstances, the subjective satisfaction recorded for preventive detention was found to be unsupported by the material on record.

Conclusion: The detention order was held to be illegal and was quashed, and the rejection of the representation was set aside.

---