2025 (8) TMI 663 - HC - Customs

Seizure of Betel Nuts Consignment Upheld Despite Minor Errors and Unsubstantiated Gratification Claims Under Section 121

Biswajit Roy Bir Versus Union Of India & Ors.

Biswajit Roy Bir Versus Union Of India & Ors. - TMI 1. ISSUES PRESENTED and CONSIDERED Whether the seizure of the consignment of betel/areca nuts under Section 110 of the Customs Act, 1962 was valid and justified. Whether the formation of opinion by the customs officer that the goods were liable for confiscation was based on valid reasons and complied with the statutory requirements. Whether the invocation of Sections 111(b), 111(d), and 121 of the Customs Act, 1962 in the seizure memo was legally consistent and appropriate. Whether the petitioner's claim of lawful trade and possession of valid documents (invoice and e-way bill) negates the grounds for seizure. Whether the Court can examine the sufficiency of the reasons to believe formed by the customs officer for seizure. Whether the petitioner's failure to respond to summons and alleged non-cooperation affects the entitlement to relief. Whether allegations of illegal gratification demand by officers raised by the petitioner affect the validity of seizure or warrant interference. 2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Validity of Seizure under Section 110 of the Customs Act, 1962 Legal Framework and Precedents: Section 110 of the Customs Act authorizes seizure of goods when the officer has reasons to believe that the goods are liable for confiscation. The formation of such opinion must be based on tangible grounds. Precedents establish that the Court may examine whether an opinion was formed but not the sufficiency of the materials on which it was based. Court's Interpretation and Reasoning: The Court found that the seizure notice dated 5th April, 2025 was issued after interception of the vehicle carrying the consignment near the Indo-Bangladesh border, a location inconsistent with the declared route from Kolkata to New Delhi. The Court noted the driver's statement that the goods were procured from Chikanpara market near the border, supporting the customs officer's opinion of foreign origin and smuggling. Key Evidence and Findings: The vehicle's detour to a border area, the driver's admission of procurement from Chikanpara, and the petitioner's failure to explain the route or respond to summons were material facts supporting the formation of opinion. The existence of valid invoice and e-way bill was insufficient to negate these facts. Application of Law to Facts: The Court held that the customs officer had valid reasons to believe the goods were liable for confiscation under Section 110. The seizure was therefore lawful and justified at the stage of investigation. Treatment of Competing Arguments: The petitioner argued that the seizure was unfounded and that the officer failed to properly form an opinion as required. The Court rejected this, emphasizing that the Court's role is not to assess the sufficiency of the reasons but only the existence of an opinion formed on some grounds. Conclusions: The seizure under Section 110 was valid and the officer's opinion was properly formed based on relevant facts. Issue 2: Appropriateness of Invoking Sections 111(b), 111(d), and 121 of the Customs Act in Seizure Memo Legal Framework and Precedents: Section 111(b) and 111(d) pertain to confiscation of goods imported in contravention of law or smuggled goods. Section 121 relates to confiscation of proceeds of sale and not the goods themselves. The invocation of these provisions must be consistent and appropriate. Court's Interpretation and Reasoning: The Court observed that though the seizure memo invoked Sections 111(b), 111(d), and 121, the provisions are mutually incongruous. However, the Court held that a minor error or incorrect invocation of a particular section in the seizure memo does not invalidate the seizure or the formation of opinion by the officer. Key Evidence and Findings: The Court noted that the primary ground was that the goods were smuggled and of foreign origin, attracting Sections 111(b) and 111(d). The incorrect reference to Section 121 was treated as a minor procedural flaw. Application of Law to Facts: The Court applied a pragmatic approach, focusing on substance over form, holding that the seizure was not vitiated by the incorrect section invocation. Treatment of Competing Arguments: The petitioner challenged the seizure memo's grounds as inconsistent. The Court declined to invalidate the seizure on this basis. Conclusions: The invocation of Sections 111(b) and 111(d) was appropriate; the erroneous reference to Section 121 did not affect the seizure's validity. Issue 3: Effect of Valid Documents (Invoice and E-way Bill) on Seizure Legal Framework and Precedents: Possession of valid tax invoices and e-way bills generally supports lawful possession and movement of goods but does not preclude seizure if there is reason to believe goods are smuggled or illegally imported. Court's Interpretation and Reasoning: The Court noted that despite the petitioner's possession of valid documents, the unexplained detour to a border area and the driver's statement about procurement from a border market raised serious suspicion. Hence, documents alone could not negate the suspicion or justify quashing the seizure. Key Evidence and Findings: The vehicle's route and procurement details contradicted the declared transaction, undermining the documents' evidentiary value in isolation. Application of Law to Facts: The Court applied the principle that documents do not immunize goods from seizure if credible reasons exist to believe the goods are liable to confiscation. Treatment of Competing Arguments: The petitioner relied heavily on documents to assert lawful trade. The Court held that such reliance was insufficient in the face of contradictory evidence. Conclusions: Valid documents do not preclude seizure where credible grounds for suspicion exist. Issue 4: Judicial Review of Sufficiency of Reasons to Believe for Seizure Legal Framework and Precedents: Judicial precedents establish that Courts can examine whether an opinion was formed under Section 110 but cannot delve into the sufficiency or adequacy of the reasons forming the basis of such opinion. Court's Interpretation and Reasoning: The Court relied on authoritative rulings emphasizing that the Court's role is limited to verifying the existence of an opinion and not the quality or sufficiency of the materials. The Court found that the seizure memo and circumstances demonstrated formation of opinion. Key Evidence and Findings: The seizure memo referenced grounds for belief, and the surrounding facts supported the officer's opinion. Application of Law to Facts: The Court refused to entertain detailed scrutiny of the materials or the strength of the reasons, consistent with established jurisprudence. Treatment of Competing Arguments: The petitioner sought to challenge the formation of opinion itself. The Court held that the formation of opinion was evident and thus not subject to interference. Conclusions: The Court will not interfere with seizure on grounds of insufficiency of reasons once formation of opinion is established. Issue 5: Impact of Petitioner's Non-Cooperation and Failure to Respond to Summons Legal Framework and Precedents: Non-cooperation with investigation and failure to respond to summons can be relevant in assessing the credibility of the petitioner and the propriety of relief. Court's Interpretation and Reasoning: The Court noted that the petitioner failed to respond to three consecutive summons and did not cooperate with the investigation. This non-cooperation was a factor supporting the customs authority's position and militated against granting relief. Key Evidence and Findings: Record showed repeated summons and no response from the petitioner. Application of Law to Facts: The Court treated non-cooperation as justifying non-interference with the seizure during ongoing investigation. Treatment of Competing Arguments: The petitioner's attempt to raise complaints of illegal gratification was considered but found to be raised only after summons and non-cooperation, thus not warranting interference. Conclusions: Petitioner's non-cooperation supports dismissal of the writ petition and non-interference with seizure. Issue 6: Allegations of Illegal Gratification Demand by Officers Legal Framework and Precedents: Allegations of illegal gratification are serious but require substantiation and timely raising to be considered in judicial review of seizure or investigation. Court's Interpretation and Reasoning: The Court observed that such allegations were made belatedly after multiple summons and non-cooperation. The Court declined to entertain or investigate these allegations in the context of the present writ petition. Key Evidence and Findings: No substantive evidence or timely complaint was placed on record. Application of Law to Facts: The Court held that unsubstantiated and belated allegations do not justify interference with lawful seizure or investigation. Treatment of Competing Arguments: Petitioner's allegations were noted but not accepted as grounds for relief. Conclusions: Allegations of illegal gratification did not affect the validity of seizure or warrant judicial interference.