Allahabad HC grants regular bail to applicant charged under Section 135 Customs Act for gold smuggling

The Allahabad HC granted regular bail to an applicant charged under Section 135 of the Customs Act for gold smuggling. The court found the applicant posed no flight risk, having established residence, registered business, and family ties. With no criminal history and over three months in custody, the DRI failed to demonstrate continued detention necessity. Considering the maximum seven-year sentence, triable by magistrate, and fundamental right to liberty, the court balanced factors and granted bail with personal bond and two sureties, subject to conditions.

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Issues Involved:

1. Whether the applicant is entitled to regular bail under Section 439 Cr.P.C. in a case under Section 135 of the Customs Act, 1962.
2. Whether the seized gold and cash were of foreign origin and if the provisions of Section 135 of the Customs Act are applicable.
3. The relevance of the statements made by co-accused and the burden of proof under Section 123 of the Customs Act.
4. Consideration of applicant's business legitimacy and compliance with tax regulations.
5. Applicant's risk of absconding or tampering with evidence.

Issue-wise Detailed Analysis:

1. Entitlement to Bail:

The applicant filed a regular bail application under Section 439 Cr.P.C. after being in judicial custody since 29.06.2024. The Court considered several factors, including the applicant's incarceration period, the non-severity of the punishment under Section 135 of the Customs Act, and the absence of any criminal history. The Court emphasized the presumption of innocence and the fundamental right to personal liberty, as highlighted by the Apex Court in Dataram Singh v. State of U.P. & Another and Sanjay Chandra v. Central Bureau of Investigation. The Court concluded that the applicant is entitled to bail, provided certain conditions are met, ensuring the applicant's presence during trial and preventing any misuse of bail.

2. Origin of Seized Gold and Applicability of Section 135:

The prosecution alleged that the gold was of foreign origin, invoking Section 135 of the Customs Act. However, the Court noted the absence of clear evidence indicating the foreign origin of the gold, except for the statements of the co-accused. The Court found that the seized gold was not recovered from a location typically associated with smuggling, such as an airport or border town. The applicability of Section 135, which deals with the evasion of duty or prohibitions, was questioned due to insufficient evidence of the gold's foreign origin.

3. Statements of Co-accused and Burden of Proof:

The statements of co-accused Lalmohan Panja and Harekrishna Parai indicated the gold's foreign origin. However, the Court considered these statements insufficient to establish the applicant's culpability under Section 135. The burden of proof under Section 123 of the Customs Act, which places the onus on the accused to prove the non-smuggled nature of goods, was deemed irrelevant at the bail stage. The Court suggested that this issue should be addressed during the trial.

4. Business Legitimacy and Tax Compliance:

The applicant claimed to be a legitimate businessman dealing in gold and jewellery, supported by documentation such as GST returns, income tax returns, and business registration. The Court acknowledged these documents, noting that they prima facie indicated the applicant's legitimate business operations. The prosecution did not dispute the authenticity of these documents, which bolstered the applicant's claim of being falsely implicated.

5. Risk of Absconding or Tampering with Evidence:

The Court assessed the applicant's risk of absconding or tampering with evidence. It found no substantial risk, given the applicant's roots in society, family ties, and lack of criminal history. The Court also noted that the applicant had been cooperative during the investigation and that the DRI had not demonstrated any need for further custody. Consequently, the applicant was granted bail with conditions to ensure compliance and prevent any interference with the judicial process.

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