TaxTMI 
TaxTMI 
2006 (9) TMI 198
X X X X Extracts X X X X
X X X X Extracts X X X X
....his Court on 26-7-2005, Annexure P.4. Reliance is also placed on a judgment of the Bombay High Court in Bhavesh Exports Private Limited v. Assistant Collector of Customs, 2002 (144) E.L.T. 50. 4. In the reply filed, stand taken by the respondents is that the bank account has been frozen for the purpose of investigation and securing financial interest of the Government as the petitioners have defrauded the government to the tune of Rs. 6 crores and power of seizure of accounts is available under Section 110(3) of the Customs Act, 1962 (for short, the Act). 5. Substantial question of law which arises for consideration is whether freezing of bank accounts is permissible under Section 110 of the Act. 6. Section 110 of the Act is as under:- "110. Seizure of goods, documents and things. - (1) If the proper officer has reason to believe that any goods are liable to confiscation under this Act, he may seize such goods: Provided that where it is not practicable to seize any such goods, the proper officer may serve on the owner of the goods an order that he shall not remove, part with, or otherwise, deal with the goods except with the previous permission of such officer. (1-A) The Cent....
X X X X Extracts X X X X
X X X X Extracts X X X X
....der sub section (3), seizure of documents or things is permissible if the same is useful for or relevant to proceeding under the Act. 8. Learned counsel for the revenue submitted that under Section 2(22) of the Act, goods included "currency and negotiable instruments", which also covered the bank account. He also relied upon judgment of Calcutta High Court in Rohit Kumar v. Union of India, 2002 (141) E.L.T. 27, wherein, it was observed that the word things in sub-section (3) of Section 110 of the Act included money lying in a bank account. 9. Confiscation of goods under Section 111 of the Act is permissible only if the goods are either prohibited or in respect of which duty has been evaded or have been otherwise improperly imported. This cannot be the situation in respect of the bank account. Similarly, taking the money in the bank account to be the things, the money should be relevant to the proceedings under the Act. Question of relevance of money will arise only if the amount is due, for which there has to be determination of liability, final or provisional by passing an order. Section 142 of the Act provides for recovery of sums due to the government by initiating proceedings....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Sharma v. Satish, AIR 1954 SC 300. It was observed at pages 306-307: "A power of search and seizure is in any system of jurisprudence an overriding power of the state for the protection of social security and that power is necessarily regulated by law. When the Constitution makers have thought fit not to subject such regulation to constitutional limitations by recognition of a fundamental right to privacy, analogous to the American Fourth Amendment, we have no justification to import it, into a totally different fundamental right, by some process of strained construction. Nor is it legitimate to assume that the constitutional protection under Art. 20(3) would be defeated by the statutory provisions for searches." 12. At page 302 of the said judgment, it was observed: "A search and seizure is, therefore, only a temporary interference with the right to hold the premises searched and the articles seized. Statutory regulation in this behalf is necessary and reasonable restriction cannot per se be considered to be unconstitutional. The damage, if any, caused by such temporary interference if found to be in excess of legal authority is a matter for redress in other proceedings. We are....
X X X X Extracts X X X X
X X X X Extracts X X X X
....v. State of UP, AIR 1963 SC 1295 and Govind v. State of MP, AIR 1975 SC 1378 and it was concluded that right of the State has to be exercised on reasonable basis or on reasonable material. It was further observed in para 33 of judgment in Canara Bank (supra) : "33. Intrusion into privacy may be by. - (1) legislative provisions, (2) administrative/executive orders, and (3) judicial orders. The legislative intrusions must be tested on the touchstone of reasonableness as guaranteed by the Constitution and for that purpose the court can go into the proportionality of the intrusion vis-a-vis the purpose sought to be achieved. (2) So far as administrative or executive action is concerned, it has again to be reasonable having regard to the facts and circumstances of the case. (3) As to judicial warrants, the court must have sufficient reason to believe that the search or seizure is warranted and it must keep in mind the extent of search or seizure necessary for the protection of the particular State interest. In addition, as stated earlier, common law recognized rare exceptions such as where warrantless searches could be conducted but these must be in good faith, intended to preserve evi....