High Court sets aside customs order due to jurisdictional defect and denial of cross-examination under Article 226

HC allowed writ petition under Article 226 challenging seizure and adjudication order. Court found jurisdictional defect where seizure was based on belief of illegal import but adjudication proceeded on illegal export allegations. Denial of cross-examination of seizing officer violated natural justice principles. Court held foundational aspect of "reason to believe" was absent, justifying extraordinary remedy invocation. Impugned order was set aside due to lack of jurisdiction and procedural violations in customs proceedings.

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Issues:
Seizure of goods based on incorrect grounds; Violation of principles of natural justice by denying cross-examination; Lack of jurisdiction in adjudication proceedings.

Analysis:
The petitioners challenged the seizure of goods and the adjudication order, arguing that the reason for seizure did not align with the adjudication proceedings initiated, which violated Section 100 of the Customs Act, 1962 requiring 'reasons to believe' for seizure. The seizure was purportedly for violating a customs notification regarding import from Nepal, but the show-cause notice and adjudication order focused on illegal export, specifically sugar not notified under the Act. The petitioners' request for cross-examination of the seizing officer was not permitted, contrary to principles of natural justice as highlighted in legal precedents.

The Department's Standing Counsel noted the petitioners' failure to appeal the matter through statutory remedies and emphasized the export policy's requirement for a release order for exporting sugar. The seizure receipt indicated a violation of a specific customs notification related to goods imported into India from Nepal, not illegal export as alleged in the show-cause notice and adjudication order. The foundational aspect of 'reason to believe' for seizure was found to be absent, rendering the invocation of Article 226 necessary, as established in legal precedents.

The High Court referred to legal precedents emphasizing the discretionary nature of writ jurisdiction, highlighting the need for strong grounds to invoke extraordinary remedies. The denial of cross-examination of the seizing officer and the jurisdictional discrepancy between illegal import and illegal export allegations justified the court's intervention under Article 226. The court allowed the writ petition, setting aside the impugned order and directing the release of any security provided or refund of paid amounts.

In a concurring opinion, Justice Partha Sarthy agreed with the decision to allow the writ petition, emphasizing the importance of upholding principles of natural justice and jurisdictional integrity in adjudication proceedings.

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