TaxTMI 
TaxTMI 
2026 (6) TMI 1109
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....Dimapur division and the goods in the nature of areca nuts which have been transported in the truck and valued at Rs. 43,13,750/- were seized along with the vehicle. It is stated that an inventory of the goods seized and detained dated 06-11-2025 was prepared under section 110 of the Customs Act, 1962. It is stated that the grounds recorded in the inventory were that the goods were suspected to be of foreign origin and hence, seized by the customs authorities. 3. It is stated that the petitioner company is engaged in the business of sale and supply of areca nuts and registered under the Goods and Services Tax Act, 2017 having registration No. GSTIN/UIN 18AATCS7469P1ZY with CIN No. U74900WB2013PTC195756. It is stated that the directors of the company are citizens of India by birth and entitled to the rights guaranteed under the Constitution of India and the laws framed there under. It is stated that after acquiring the areca nuts from the local market of Abdullapur, Hailakandi by the petitioner company, the goods were lawfully dispatched to the godown of the company at Guwahati in the nature of self-transportation supported by delivery note dated 31-10-2025. 4. It is stated th....
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....d therefore, the present seizure of the goods by the customs authorities, for any violation of GST law would be without the authority of law and vitiated. 7. It is stated and contended by the writ petitioner that the customs authorities have seized the goods of the petitioner company in violation of law and the provisions of Section 110 of the Customs Act and hence, the writ petitioner seeks release of the said goods. Various documents have been annexed with the writ petition. The writ petitioner company has also filed an additional affidavit bringing on record the copies of the documents submitted before the Superintendent of Customs (Preventive) Department, Dimapur who is respondent No. 5 in this writ petition. These documents are submitted pursuant to order dated 26-03-2026 passed by this Court directing the petitioner to approach the respondent No. 5 on 07-04-2026 and place the necessary documents in respect of the inventory of goods which were seized on 06-11-2025. The respondent Nos. 1 to 6 being the respondent authorities of the customs department have filed a joint affidavit in opposition to the writ petition. 8. It may be mentioned here that respondent No. 7 Moin Udd....
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....It is stated that acting on specific intelligence regarding smuggling of areca nuts through the northeastern region, officers of the Customs Department intercepted the truck on 06-11-2025 near Lumding-Hojai and interception was done as part of the preventive measures to prevent cross-border smuggling activities. The truck was found to be carrying 33,600 kgs of areca nuts in 480 bags with an estimated market value of Rs. 2.22 crores. 13. It is reiterated and stated in the affidavit that at the time of interception, no documents by way of invoices, e-way bills, delivery challan or other value documents were produced by the person in charge of the conveyance. The complete absence of documents at the relevant time gave rise to a reasonable belief that the goods were being transported in contravention of law. It is also stated that during the seizure, the driver of the vehicle assaulted a customs personnel and absconded from the spot and such conduct was a relevant circumstance reinforcing the belief that the goods were being transported unlawfully. 14. It is stated that northeastern region is highly prone to smuggling of areca nuts through the international borders and the modus ....
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....peared. (xi) The documents submitted indicated Moin Uddin as the supplier. 18. In support of his contentions, the learned counsel for the petitioner cites the following decisions: (i) Commissioner of Income Tax, Mumbai vs. Amitabh Bachan, reported in (2016) 11 SCC 748. (ii) Joti Parshad v. State of Haryana, reported in 1992 Supp (2) SCC 497. (iii) Calcutta Discount Co. Ltd. Vs. ITO, reported in (1961) 41 ITR 191. (iv) Madhya Pradesh Industries Ltd. Vs. ITO, reported in (1965) 57 ITR 637. (v) M.P. Industries Ltd. Vs. ITO, reported in (1970) 2 SCC 32. 19. I have perused the relevant materials, including the pleadings and the annexed documents, and considered the rival submissions. I have also perused the case laws submitted at the Bar. 20. Under Section 110 of the Act (i.e., the Customs Act), a proper officer can seize goods liable to confiscation upon reasonable belief that the said goods are liable to confiscation. The statutory provision - Section 110 of the Act is reproduced herein below:- "110. Seizure of goods, documents and things.-(1) If the proper officer has reason to believe that any goods are liable t....
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....he correctness of any list of samples so drawn. (1C) Where an application is made under sub-section (1B), the Magistrate shall, as soon as may be, allow the application.] [(1D) Where the goods seized under sub-section (1) is gold in any form as notified under sub-section (1A), then, the proper officer shall, instead of making an application under sub-section (1B) to the Magistrate, make such application to the Commissioner (Appeals) having jurisdiction, who shall, as soon as may be, allow the application and thereafter, the proper officer shall dispose of such goods in such manner as the Central Government may determine.] (2) Where any goods are seized under sub-section (1) and no notice in respect thereof is given under clause (a) of section 124 within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized: [Provided that the Principal Commissioner of Customs or Commissioner of Customs may, for reasons to be recorded in writing, extend such period to a further period not exceeding six months and inform the person from whom such goods were seized before the expiry of the period so ....
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....f the material is not open to judicial review. ... (emphasis added)". 24. In the case of Ruksana Begum Choudhury Vs. Union of India reported in 2024 SCC Online Gau 2093 : (2024) 5 Gau LR 187, the Division Bench of this Court held in para 13 as under:- "13. The hon'ble Supreme Court in Indru Ramchand Bharvani (supra) has observed that reasonable belief as to smuggled goods had been explained by the hon'ble Supreme Court in State of Gujarat v. Mohanlal Jitamalji Porwal, (1987) 2 SCC 364, wherein the hon'ble Supreme Court observed whether or not the official concerned has seized the article under "reasonable belief" that the goods are smuggled goods is not a question on which the court can sit on appeal. The circumstance under which the officer entertains reasonable belief have to be judged from his experienced eye who is well equipped to interpret the suspicious circumstances to form a reasonable belief." 25. In para 4 of the State of Gujarat Vs. Mohanlal J. Porwal, (1987) 2 SCC 364 - the Hon'ble Apex, inter alia held as follows:- 4. ".........Whether or not the official concerned had seized the article in the "reasonable belief that the goods were....
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.... are imported or attempted to be imported or are brought within the Indian customs waters for the purpose of being imported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force; (e) any dutiable or prohibited goods found concealed in any manner in any conveyance; (f) any dutiable or prohibited goods required to be mentioned under the regulations in an [arrival manifest or import manifest] or import report which are not so mentioned; (g) any dutiable or prohibited goods which are unloaded from a conveyance in contravention of the provisions of section 32, other than goods inadvertently unloaded but included in the record kept under subsection (2) of section 45; (h) any dutiable or prohibited goods unloaded or attempted to be unloaded in contravention of the provisions of section 33 or section 34; (i) any dutiable or prohibited goods found concealed in any manner in any package either before or after the unloading thereof; (j) any dutiable or prohibited goods removed or attempted to be removed from a customs area or a warehouse without the permission of the proper officer or contrary to the....
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....able to confiscation in terms of Section 111 of the Act. 29. If the goods seized under section 110 are not released due to improper exercise of powers under the provision of the Act and/or not issuing notice within 6 (six) months, etc - the matter logically has to proceed to the stage of confiscation proceedings, wherein the goods can be forfeited on a permanent basis. Needless to say, that confiscation proceeding has to give due opportunity to the person concerned to explain as to why his goods should not be confiscated under the Act. In this context, Section 124 of the Act specifically provides for show cause notice and opportunity of hearing before confiscation of goods. 30. From an analysis of the statutory provision of section 110 of the Act and the principles of law laid down by the Hon'ble Supreme Court as noticed above - it is clear that the merit of the exercise of power u/s 110 of the Act by the proper officer, is to be scrutinized on the basis of the materials that were before him at the time of the seizure. It would not be correct to say that the merit of the said seizure made by the proper officer u/s 110 of the Act, can be seen on the basis of the materials subs....
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.... which also finds mention in Section 26 of the IPC. The Hon'ble Apex Court discussing the subject matter held in para 5 that the expression reason to believe in substance means that - a person must have 'reason to believe' if the circumstances are such that a reasonable man would, by probable reasoning, conclude or infer regarding the nature of the thing concerned. The relevant extract from the said paragraph is reproduced herein below:- 5. "......... In substance what is means is that a person must have 'reason to believe' if the circumstances are such that a reasonable man would, by probable reasoning, conclude or infer regarding the nature of the thing concerned............" (emphasis added) 36. As has been seen from the case laws of the Hon'ble Supreme Court as discussed earlier, the satisfaction of the criteria of the 'reason to believe' for the purpose of Section 110 of the Act has to be seen in the circumstances prevailing at the time of the seizure and through the experienced eye of the Customs officer. 37. The subsequent affidavit filed by the petitioners side may not be of much help in this determination. In this regard, in the case of Indru Ramchand Bharva....
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....the relevant materials on record and in the backdrop of the above discussion - I come to the considered finding that in the instant case, exercise of powers by the Customs official under section 110 of the Act in seizing the arecanuts was a bonafide exercise of power, satisfying the criteria of reason to believe mentioned in the statutory provision of section 110 of the Act. In terms of the principles of law discussed and noticed above, I come to the considered finding that the Customs officer had reasons to believe to exercise the powers under Section 110 of the Act in the instant case. 41. Therefore, the prayer of the petitioner in this writ petition for seeking release of the arecanuts is liable to be dismissed. However, if confiscation proceedings u/s 111 of the Act are carried out by the Customs authorities with regard to the seized arecanuts - then in terms of section 124 of the Act, the petitioner is to be noticed and given a chance of hearing. Therefore, in any such confiscation proceeding, the petitioner company is the purported owner of the arecanuts would be at liberty to produce all the documents in support of its contention, that the arecanuts should not be confisca....