TaxTMI 
TaxTMI 
2016 (1) TMI 11
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.... is to restrain the Petitioner from dealing with his immovable properties and freezing of his bank accounts. 3) A certain consignment stated to be 7.12 metric ton of red sanders, concealed in the cement blocks and bricks of fly ash for export came to be seized by the Respondent No. 2 to this Writ Petition. The Respondents, particularly Respondent No. 2 is Senior Intelligence Officer in the Directorate of Revenue Intelligence, Mumbai Zonal Unit. 4) Mr. Balani, learned Counsel appearing for the Petitioner would submit that this matter was mentioned urgently, as not only the Petitioner came to be arrested on the allegations that he was engaged in smuggling of red sanders and certain endangerous species of wild flora and fauna, but on production before competent Court, he came to be enlarged on bail on 17th October, 2015. By letters commencing from 19th August, 2015, the second Respondent has restrained the Petitioner from dealing with his immovable properties, more particularly mentioned in para 7 and the communications/letters of 19th August, 2015 and 20th August, 2015, copies of which are at Annexures 'B' to 'E' to the Writ Petition. 5) By another communication Annexure 'F'....
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.... 11) Mr. Jetly would support the impugned action and submit that this is not a case on par with those dealt with by this Court in several orders and directions. In those matters, the duty liability was not crystallised and ascertained. Yet, the coercive measures were initiated and the demand was pursued without passing a speaking order. In those peculiar circumstances, the orders releasing the bank accounts from attachment came to be passed. 12) However, in the present case, the authority has found the Petitioner's involvement and which is apparent from the record. The criminal case is pending. In these circumstances, he would rely upon a Division Bench Judgment of this court delivered in the case of Nitin Shirsat vs. union of India reported in 2015 (325) ELT 561 (Bom). He would also rely upon the prior judgment that too of a Division Bench of this Court in the case of Shri Krishna Chaitanya enterprises vs. Union of India reported in 2014 (36) STR 1238 and a Hon'ble Supreme Court judgment in the case of Commissioner of Customs, New Delhi vs. Euroasia Global reported in 2009 (236) ELT 627. 13) The relevant sections that Mr. Jetly relies upon are reproduced hereinbelow:- ....
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....Customs for a period not exceeding six months. (3) The proper officer may seize any documents or things which, in his opinion, will be useful for, or relevant to, any proceeding under this Act. (4) The person from whose custody any documents are seized under sub-section (3) shall be entitled to make copies thereof or take extract therefrom in the presence of a officer of customs. 119. Confiscation of goods used for concealing smuggled goods. - Any goods used for concealing smuggled goods shall also be liable to confiscation. Explanation - In this section, "goods" does not include the conveyance used as a means of transport. 120. Confiscation of smuggled goods notwithstanding any change in form, etc. (1) Smuggled goods may be confiscated notwithstanding any change in their form. (2) Where smuggled goods are mixed with other goods in such manner that the smuggled goods cannot be separated from such other goods, the whole of the goods shall be liable to confiscation: Provided that where the owner of such goods proves that he had no knowledge or reason to believe that they included any smuggled goods, only such par....
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....produced above, the person liable to a penalty can be proceeded against and pertinently the words are that such confiscation or penalty may be adjudged. Then, by section 122A, there is an adjudication procedure. If Mr. Jetly has been instructed to state that the Respondents are inclined to impose penalty on the Petitioner, then, that penalty or the sum in respect thereof has to be declared. The words "adjudged" or "adjudication of confiscation of penalties" have been advisably inserted in this provision and would disclose the intent of the legislature. The legislature, therefore, mandated adjudication of confiscation and penalties and that is by the adjudication procedure set out in section 122A, which was inserted by Act 23 of 2004 with effect from 10th September, 2004. That mandates the adjudicating authority to give an opportunity of being heard to the party in the proceeding, if the party so desires. If that is the adjudication procedure and what we are being informed is that an adjudication of penalty would take place, then, we do not see how without any order being made in pursuance thereof or any sum crystallised or ascertained, the coercive measures initiated and undertaken....
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....ce. The amount was seized and upon the satisfaction arrived at by the DRI. That should not have been released pending adjudication was the order passed and that too unconditional release of the sum was found to be unsustainable. This order, therefore, renders no assistance to Mr. Jetly. 18) In the case of Shri Krishna Chaitanya Enterprises (supra) a communication to the bank resulted in filing of the Writ Petition. That attached the bank account of the Petitioner for defaulting in payment of Service Tax liability to the tune of Rs. 88.10 lacs. That amount of Service Tax was collected by the Petitioner from his clients, but not deposited with the Government. The Petitioner denied this position and said that he has paid the Service Tax in the sum of Rs. 1 crore and odd. That sum is therefore inclusive of the amount referred by the Department. There was no show cause notice and no adjudication order and hence, the complaint was that the freezing of bank account is illegal. 19) In para 6, the Division Bench noted the request of the Petitioner and on his own that without prejudice to the rights and contentions and since the business has been completely paralysed, he was ready and ....
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....nces, we continue the freezing and attachment of the immovable properties subject however to a limited liberty to the Petitioner to deal with the said properties in his ordinary and usual course of business. There will be no transfer, alienation or parting with possession thereof in any manner until an adjudication order in accordance with law is passed. Similarly, the Petitioner is free to operate his bank accounts and the sums therein can be released by the banks so as to enable the Petitioner to meet the liabilities in his business activities and in relation to the deals, which are disclosed in para 10 of the Writ Petition. The Petitioner, therefore, will be able to carry on his day to day business activities and for that purpose, the bank accounts shall be permitted to be operated. Save and except this limited permission and liberty, we are not inclined to accept all the requests as made in the prayer clauses of the Petition. We are mindful of the fact that in such matters an early adjudication serves the larger interest of public. We direct that within a period of three months from today, the authorities shall issue show cause notice and pass the adjudication order in accordan....