Court Quashes Bank Account Attachment Due to Expired Statutory Period; Orders Timely Defreezing Under Customs Act.

The HC of Bombay quashed and set aside the provisional attachment of the petitioner's bank account under the Customs Act, 1962. The court found that the six-month statutory period for the attachment had expired and the respondents failed to extend or lift the attachment as required by law. The respondents were directed to inform the bank to withdraw the attachment within one week, emphasizing the duty to respond to requests for defreezing accounts in a timely manner.

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Issues Involved:
The judgment involves the legality of the provisional attachment of a bank account under Section 110(5) of the Customs Act, 1962, and the failure of the respondents to respond to requests for lifting the attachment within the stipulated time frame.

Comprehensive Details:

Issue 1: Provisional Attachment of Bank Account
The petitioner, engaged in import and export business, challenged the provisional attachment of their bank account by Respondent No. 2 under Section 110(5) of the Customs Act, 1962. The petitioner contended that the six-month period for provisional attachment had expired, as per the law, on 28th May 2023. Despite multiple requests to lift the attachment, the respondents did not respond. The court noted that the respondents failed to extend the attachment as required by law and did not defreeze the account even after the expiry of the statutory period. The court held that the provisional attachment had expired by operation of law and ordered the attachment to be quashed and set aside. The respondents were directed to inform the bank to withdraw the attachment within one week.

Issue 2: Legal Provisions and Duty of Respondents
The court referred to Section 110(5) of the Customs Act, which allows provisional attachment for six months, extendable for another six months with reasons recorded in writing. The court emphasized that the respondents were duty-bound to respond to requests for defreezing the account, especially after the expiry of the initial six-month period. The court criticized the respondents for failing to defreeze the account despite reminders from the petitioner, stating that such inaction goes against the government's policy of ease of doing business. The court concluded that the respondents' failure to act necessitated the filing of the petition and ordered the attachment to be lifted.

Conclusion:
The High Court of Bombay, in a judgment delivered by G.S. Kulkarni & Jitendra Jain, JJ., quashed and set aside the provisional attachment of the petitioner's bank account under the Customs Act, 1962. The court highlighted the legal provisions governing provisional attachments and the duty of the respondents to respond to requests for lifting such attachments within the stipulated time frame. The court's decision was based on the expiration of the statutory period for the attachment and the respondents' failure to extend or lift it accordingly.

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