Unjust Bank Account Freeze Rectified Under Customs Act

The Court found the freezing of the petitioner's bank account unjustified and oppressive as it was done without legal sanction under section 110(5) of the Customs Act, 1962. The Court noted the account was frozen before the provision's effective date and that the initial freezing period had expired. Consequently, the Court directed the immediate unfreezing of the account, emphasizing that the freeze was not in accordance with the law. The writ petition was allowed without costs, and the order was to be digitally signed for prompt implementation.

---

---

Issues:
1. Freezing of bank account under section 110(5) of the Customs Act, 1962.

Analysis:
The petitioner filed a petition seeking the unfreezing of their bank account, which was frozen on 07.12.2018 on the instructions of the respondents. The respondents alleged that an amount representing illegally availed IGST refund of an exporter was deposited in the petitioner's account, leading to the freeze. The respondents relied on section 110(5) of the Customs Act, 1962 to justify their actions. However, the Court noted that the provision was inserted in the Act with effect from 01.08.2019, while the account was frozen prior to this date. The Court found that the initial period of freezing the account had expired, and any extension would have also lapsed, making the continued freeze unjustified and oppressive without legal sanction.

The Court, after considering the submissions, directed the respondents to immediately unfreeze the petitioner's bank account. The Court highlighted that the freezing of the account was not in line with the provisions of the Customs Act and ordered the release of the account. The writ petition was allowed without any costs, and the order was to be digitally signed for immediate action by all concerned parties.

---