TaxTMI 
TaxTMI 
TaxTMI 
2023 (8) TMI 1005
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....oner's bank accounts i.e. Savings Account No. 809510264 and Current Account No. 6010527667 held with Respondent No. 3 bank; ii. To unseal the Petitioner's godown Premises located at Plot No. 497, Road No. 4, Steel Market, Kalamboli 410213;" 2. Brief facts :- The petitioner is a proprietorship concern engaged in the business of buying and selling of CRGO sheets, scraps, etc. in local market. 3. The petitioner, in the course of his business, entered into an agreement with one Pacific Powertech Solutions (Pacific) for purchase of CRGO Strips. The petitioner made market enquiries and found that Pacific had purchased the said goods from one GSD Technology, who, in turn, had purchased the goods from one M/s ST Electricals, who is the actual importer of the goods. M/s ST Electricals is located in Jaipur. The petitioner purchased these goods from Pacific under Invoice No. 043 dated 02.07.2023, No. 044 dated 02.07.2023, No. 045 dated 03.07.2023 and No. 046 dated 05.07.2023. The petitioner, in the course of his business, sold the above-referred goods, which were purchased from Pacific to one Narayan Power Solutions and one Transel Engineers over the period of 4 July 2023 to 11 July 202....
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....rned Single Judge of the Madras High Court in the case of Adam vs. Income-tax Officer as also the decision of the learned Single Judge of the Karnataka High Court in case of Karnataka Bank Ltd. vs. Commissioner of Commercial Taxes, observed that the account in question being a cash credit account, in other words, a overdraft facility, the unutilised overdraft account does not render the banker a debtor in any sense and the banker is therefore not a person from whom money is due to the customer. It is further observed that where the banker lends money on an overdraft and the customer is always in debit there is no stage at which the banker is debtor to the customer, nor at any point of time at which he holds any money of the customer or the later's account. The Division Bench in making such observations, agreed with the view expressed in Adam's case (supra) and also in Karnataka Bank Ltd.'s case (supra) holding that the respondent therein had no authority to freeze the cash credit account and accordingly such orders were set aside. In our opinion, although the issue in such case fell under the provisions of Bombay Provincial Municipal Corporations Act, 1949 (now the Maharashtra Muni....
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....den pallets) 2 CRGO-STEEL SCRAP 29 (Wooden pallets) 3 CRGO-STEEL SCRAP 03 (wooden boxT) 4 CRGO-STEEL SCRAP 02 (metal box) Table-B Sr. No. Name of the Document No. of Pages 1 Sales invoice (alongwith e-way bills, etc.) 01-92 2 Purchase invoice (alongwith e-way bills, etc.) 01-92 8. It is in the light of these facts, we are called upon to consider prayers in the petition and the subsequent developments pursuant thereto. 9. As of now the only question, which requires to be considered by this Court is whether in the facts and circumstances of the present case, the respondents would have authority and jurisdiction to detain the goods and documents and attach the bank accounts. 10. We have heard learned counsel for the petitioner and learned counsel for the respondents. We have also perused, with the assistance of the counsel, the affidavit-in-reply of the respondents dated 31 July 2023 and the additional affidavit filed by the petitioner dated 31 July 2023. 11. Submissions of the Petitioner: The petitioner has contended that he has not imported the goods and that he is a bonafide purchaser in the chain of sale and purchase transaction startin....
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....tained are of the description CRGO-Slit Coil and CRGO-Steel Scrap. These two goods appears to be not the same goods. In our prima facie view, the affidavit-in- reply of the respondents would militate against the case of the respondents that the goods, which are detained, are the goods, which were originally imported by M/s ST Electricals. The respondents themselves admit in the reply that goods purchased by the petitioner, which were originally imported by M/s ST Electricals, are already sold by the petitioner. If that be so, then the said goods cannot be of the ownership of the petitioner. Therefore, the respondents are not contending that they have detained the same goods, which were imported by M/s ST Electricals, but are of similar description which matches with purchase invoice of the said similar description goods. Thus, in our view, on such admission by the respondents the impugned action of detaining goods of the petitioner, would be rendered without jurisdiction. 15. In the context in question it is necessary to note the relevant provisions of the Customs Act. 16. Section 2(14) of the Act defines "dutiable goods" to mean any goods, which are chargeable to duty and on whi....
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.... the third person against whom action is initiated has already sold the goods in open market and when there was no demand or proceedings pending for recovery of duty etc. against such third person. In the present case, the goods imported by M/s ST Electricals were initially cleared for home consumption by the said importer and the said goods have changed hands in open market and is also out of the possession of the petitioner. The respondents in their affidavit in reply have referred to the communication from Jodhpur Customs authorities dated 8 July 2023 and 12 July 2023 wherein the Jodhpur authorities have directed the respondents to seize the very goods imported by M/s ST Electricals. In the said reply, the respondents have stated that these very goods have been sold by the petitioner to Narayan Power Solutions. In our opinion, the situation would have been different if the Customs were to bring some materials to show that the goods in question were being allegedly dealt by M/s. ST Electricals in connivance with the petitioner or that the petitioner was not a bonafide third party purchaser. If this be the case, then the action of detaining the goods of the petitioner was contrary....
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.... account is to protect the interest of revenue or to prevent smuggling. Therefore, on both these counts attachment of the saving bank account cannot be held to be legal and valid. Further the provision of Section 111 provides for confiscation of improperly imported goods. Prima facie, the petitioner being a third party purchaser of the goods in question, this provision also may not be applicable. 23. We may also observe that if the case of the respondent is accepted, that the department can detain any goods in the hands of subsequent purchaser of the goods who has purchased them from the open market, then it would lead to an anomalous and chaotic situation. Illustratively, where Mr. A who imports goods and sells them to third parties which are subject matter of various transactions leading to Mr. Z who is a third party purchaser from the open market, such goods cannot be subject matter of any detention by the Customs Authorities merely because import of goods by Mr. A is being investigated. 24. The respondents have also relied upon the provisions of Section 135 to justify their actions. Section 135 deals with evasion of duty and it provides for prosecution, if any person in relat....