IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.11938 of 2011 1. Assam Trade & Transport through its Proprietor Jai Kishan Sarda, S/O-Mal Chand Sarda, Resident of HB Road ,Opposite Ambar Hotel ,Fancy Bazar P.S . Fancy Bazar ,Dist -Gouhati ,Assam. 2. Adras Traders ,through its Proprietor Ragender Pareek , S/O-Jeth Mal Pareek Resident of Gope Nagar, Parenger Par ,Falakata ,P.S- Falkata ,Dist-Jalpaiguri,West Bengal……………Petitioners. Versus 1. The Union of India through the Chief Commissioner of Customs, Bihar ,Central Revenue Building Patna ,Bihar 2. The Commissioner of Customs ,Bihar, Patna 3. The Deputy Commissioner ,Customs ,Dist-Muzaffarpur ,Bihar. 4. The Superintendent of Police ,Dist-Samastipur ,Bihar. 5. The Superintendent Cum Investigating Officer, Barauni Customs Division ,Barauni…………………………………Respondents. ---------------------------------- For the petitioner : Mr. Prabhat Ranjan, Advocate. For the respondents : Mrs. Archana Meenakshee and Mr. Archana Sinha, Advocates. P R E S E N T HON’BLE MR. JUSTICE S.N. HUSSAIN O R D E R 06/ 14.11.2011 Petitioner no.1 is a transporter having valid registration under the relevant provisions of law and is the owner of the truck in question bearing HR 55F-4753, whereas petitioner no.2 is a trader registered under the relevant taxation rules and deals in retail sale and export of betel nuts and is the owner of consignment in question, namely 15,375 Kgs. of betel nuts contained in 205 bags loaded on the said truck. 2. The said petitioners have filed this writ petition for quashing the seizure of the aforesaid betel nuts which was initially detained on 20.06.2011 by the respondents authorities of the Customs Department and was subsequently seized on the presumption firstly that the consignment was stolen one and secondly that it was of third country origin. - 2 - 3. Learned counsel for the petitioners stated that petitioner no.2 purchased the aforesaid betel nuts through different traders at Jalpaiguri vide proper trade invoices duly registered under Sale Tax Act and Rules, whereafter petitioner no.2 booked the aforesaid consignment of betel nuts with petitioner no.1 at Guwahati for being delivered to one M/s Narayan Trading Company, Naya Bazar, New Delhi after observing all the necessary formalities and preparation of the relevant documents and also after payment of the requisite fees at the Check Posts. It was also stated that on 17.06.2011 the truck was weighed at J.M. Way Bridge which showed the weight of the consignment to be 15,650 Kgs. i.e. within the required limit. 4. Learned counsel for the petitioners also argued that in the night between 19th and 20th of June, 2011 the aforesaid truck collided with an electric pole at Dalsinghsarai (Samastipur) and after negotiations and payments of damages the truck was brought on road and was ready to proceed further, but the local police officials detained the truck on a suspicion that it was carrying stolen betel nuts and without giving any detention memo or seizure list, the driver of the truck in question was directed to park the truck in a Petrol Pump campus and the keys etc. of the said truck were taken away by the police officials. 5. However, when the police officials after verification of the papers could not make out any case of theft they contacted the officers of the Customs Department and directed the driver of the truck in question to keep the truck parked at the said Petrol Pump itself and subsequently on 28.06.2011 the driver of the truck was asked to take it to Muzaffarpur Custom Office as it was required to be seized. After complying the said order the driver of the aforesaid truck communicated the facts to the petitioners who immediately - 3 - contacted the authorities on 29.06.2011 and on that very date the Custom Authorities seized the consignment vide order dated 29.06.2011 asking the petitioners to appear before the Custom Authorities on 06.07.2011. 6. Learned counsel for the petitioners further submitted that the said letter was received by the petitioners through post at 16.40 hours on 06.07.2011 and hence they could not appear before the authorities concerned, but from the said communication the petitioners learnt that the ground of seizure was absolutely baseless and unreasonable that the consignment was of a third country origin, although there was no material at all before the authorities to suggest the same at the time of seizure of the consignment and only during the pendency of the writ petition i.e. much after passing the order of seizure a statement was fabricated on a blank paper on which the signature of the driver had already been obtained, whereafter the said driver was released by the authorities without forwarding him or his statement to the magistrate. 7. It is also claimed by learned counsel for the petitioners that even according to the respondents the said statement of the driver was taken on 29th and 30th of June, 2011 (Annexure-A) which shows that the statement of the driver was taken after seizure of the goods, whereas there is nothing else to show that the betel nuts in question were of foreign origin. He also stated that there is no prohibition for importing betel nuts from Nepal and the only prohibition is that it should not have been imported to Nepal from any third country. In this regard, he relied upon a decision of the Division Bench of this court in case of Commissioner, Custom Department, Government of India, Patna vs. Dwarika Prasad Agarwal & Ors., reported in 2009 (2) P.L.J.R. 858. - 4 - 8. Learned counsel for the petitioners further argued that in exercise of powers conferred by section 5 of the Foreign Trade (Development and Regulation) Act, 1992 read with paragraph-2.1 of the foreign Trade Policy 2004-09, the Central Government made amendments in Schedule-I (Imports) of the I.T.C. (HS) Classifications of Export and Import Items vide D.G.F.T. Notification No.15 (RE-2008)/2004-2009 dated 04.06.2008 by which import was permitted freely, provided that the value of the betel nuts, either whole or split or ground or even others, was Rs.35.00 per kg. and above. In the instant case the value of the betel nuts according to the petitioners was Rs.45.00 per kg., whereas according the respondents the value of the betel nuts in question was Rs.100 per kg. as is apparent from the seizure memo dated 30.06.2011 (Annexure-A/2 to the counter affidavit). 9. Learned counsel for the petitioners also averred that only those goods can be legally seized which were liable to be confiscated as per section 110 of the Customs Act, but in the instant case the goods in question were not liable to be confiscated under section 111 or any other provision of the said Act. In this connection he relied upon a decision of a Division Bench of this court in case of Angou Golmei vs. The Union of India and others, reported in 1994 (1) PLJR 800. He also stated that the nefarious intention and illegal design of the respondents was clear from the fact that although the petitioners approached the authorities concerned on several occasions, they did not give the seizure list to the petitioners and the petitioners received a copy of the seizure list for the first time as an Annexure to the counter affidavit which was filed by the respondents during the pendency of this writ petition. 10. On the other hand, learned counsel for the respondents - 5 - authorities vehemently opposed the contentions of learned counsel for the petitioners and stated that after his release the driver of the truck never approached the authority or even this court making any statement denying the statement given by him. He also averred that the petitioners should have approached the authorities concerned with respect to the aforesaid matter, but they never approached the authorities nor appeared in the proceeding nor raised any point in support of their claim and directly approached this court by way of filing this writ petition which was not at all proper and justified. 11. Learned counsel for the respondents also claimed that the statement of the driver was taken on 29.06.2011 and 30.06.2011 whereafter seizure of the goods was made by the authorities on 30.06.2011 and only thereafter representation of the petitioners was received by the authorities on 01.07.2011 but they never appeared before any of the authorities and filed this writ petition on 22.07.2011 although copies of the writ petition were served upon learned counsel for the respondents much earlier on 08.07.2011 which clearly shows that the petitioners have not approached this court with clean hands. Learned counsel for the respondents relied upon section 108 of the Act which granted power to the authorities to summon persons to give evidence and produce documents and averred that after the specific admission of the driver and other circumstances “reasons to believe” existed at the time of seizure of the goods, which were substantiated later on. 12. Finally learned counsel for the respondents stated that under section 110 of the Act, the goods in question can be directed to be released on furnishing securities but the proceeding which has been initiated by the authorities concerned cannot be quashed as it is only a few months old and the petitioners have not even approached the authorities in connection thereof. - 6 - 13. From the arguments raised on behalf of learned counsel for the parties and the materials on record it is quite apparent that initially the truck in question was detained by the local police officials on a suspicion that it was carrying stolen betel nuts without giving any detention memo or seizure list and when after several days it was found that their suspicion was absolutely baseless the police officials contacted the officers of the Customs Department who directed the driver of the truck to take it to Muzaffarpur Customs Office as it was required to be seized on the assumption that the betel nuts loaded on the truck were brought from Nepal. 14. From Annexure-9 series to the writ petition it also becomes apparent that two memos dated 29.06.2011 were issued to petitioner no.1 by the Superintendent (Preventive) Customs, Circle Barauni Camp at Muzaffarpur informing him that the truck in question loaded with betel nuts had been detained and the matter was being investigated and hence petitioner no.1 was requested to visit the office of the said authority on 06.07.2011 at 04.00 P.M. along with papers related to booking of the above said consignment for verification and completion of investigation. The said Annexure also shows that the said memos were served upon the petitioners on 06.07.2011 at 04.40 P.M. due to which petitioners could not approach the authorities within the time prescribed. 15. Annexure-A/2 to the counter affidavit of respondents shows that the aforesaid Superintendent (Preventive) Customs, Circle Barauni seized the truck in question along with the betel nuts loaded on it on 30.06.2011 without even waiting for petitioners’ reply for which memo had already been sent to the petitioners on 29.06.2011 fixing 06.07.2011 as the date for their appearance. - 7 - 16. It is also apparent from the records that although all the documents concerned with respect to the truck and betel nuts loaded on it, showing that the goods belonged to petitioner no.2 (a registered trader) and had been booked on the truck of petitioner no.1 (a registered transporter) from Guwahati for being delivered to one M/s Narayan Trading Company New Delhi, were available with the authorities, but without considering the same they relied upon frivolous and baseless statement which cannot have any legal sanctity specially when the driver of the truck, who is alleged to have made the statements, was in custody of the authorities concerned but without producing him before the magistrate or taking his statement before the magistrate he was released for reasons best known to the authorities concerned. In the said circumstances and in view of the Registration Certificates, Tax Invoices, Delivery Challan, Transport Builty etc. the action of the authorities concerned cannot be held to be sustainable in law. 17. In this connection reference may be made to a decision of the Apex Court in case of Indian Nut Products and others vs. Union of India and others, reported in (1994) 4 Supreme Court Cases 269 in which it was held that if a statute requires an authority to exercise power, when such authority is satisfied that conditions exist for exercise of that power, the satisfaction has to be based on the existence of grounds mentioned in the statute. The grounds must be made out on the basis of the relevant material. If the existence of the conditions required for the exercise of the power is challenged, the courts are entitled to examine whether those conditions existed when the order was made. A person aggrieved by such action can question the satisfaction by showing that it was wholly based on irrelevant grounds and hence amounted to no satisfaction at all. In other words, the existence of the - 8 - circumstances in question is open to judicial review. 18. So far the question regarding “reasons to believe” is concerned, a Division Bench of this court in case of Angou Golmei (supra) specifically held that the reason for formation of the belief having been spelt out, it is open to the court to consider whether the reasons exist or not and the test would be whether a reasonable, prudent person on the basis of materials relied upon would hold the same belief. The so-called belief of the officials was at the most mere suspicion, far away from belief which could be said to be reasonable and hence the condition precedent for the exercise of power under section 110 of the Act was absent and the seizure on the basis of such belief cannot be said to be in accordance with law. 19. In this connection reference may also be made to a decision of a Bench of Bombay High Court in case of M.G. Abrol vs. Amichand Vallamji, reported in A.I.R. 1961 Bombay 227 in which it has been held as follows:- “The Customs Officers should seize the goods covered by S. 178A in a reasonable belief that they are smuggled goods before the burden of proving that they are not smuggled goods could be on the person from whose possession such goods were seized. This position would be very much clear if it can be contrasted with a case where Customs Officer seizes any of such goods merely on suspicion that they are smuggled. A suspicion can arise from peculiar kind of movement on the part of the person who is supposed to be in possession of some smuggled goods. It may arise from the kind of dealing that the person might be having in regard to certain goods, which the Customs Officer might thereupon subject to be smuggled. One may conceive of a number of other ways in which a suspicion may arise in the mind of the Customs Officer that any particular person is possessed of smuggled goods. A belief, on the other hand, cannot arise merely in the circumstances in which a suspicion can arise. A belief in the existence of a thing requires a more solid foundation than in the case of a mere suspicion. It may be based upon some definite information acquired from a reliable source that a certain person is in possession of smuggled goods. The belief again, as required by S. 178A of the Sea Customs Act, must be a reasonable one, not a belief of a man - 9 - who just catches at some slight circumstances which only creates a sort of guess or speculation in his mind that something might exist or might not exist. The belief must be such as any other reasonable man in the circumstances of the case would entertain about the existence or non-existence of a thing.” 20. From the aforesaid well settled principles of law, it is quite apparent that so far the point of time at which reasonable belief should exist is concerned, whenever the goods are seized, the officer seizing the goods must at the time of seizure have a reasonable belief that the goods he was seizing were smuggled goods and any subsequent acquisition of knowledge of such belief would be of no avail. So far the allegation that betel nuts in question were of foreign origin is concerned, a Division Bench of this court in case of Commissioner, Custom Department, Government of India, Patna (supra) had specifically held that it was not in dispute that betel nut was non-notified item and, as such, the onus to prove that the same was of foreign origin lay on Custom authority. 21. In the instant case the Custom authorities did not at all consider the shape and size of the seized betel nuts nor there is any expert trade opinion that the seized betel nuts were in any manner different from the betel nuts available in the country. In the present case neither there is any trade opinion nor any significant decisive difference has been found and hence the seized betel nuts cannot be said with certainty to be of foreign origin. The aforesaid questions have also been considered in detail by another Bench of this court in case of R.G. Holdings Private Limited vs. The State of Bihar & Anr., reported in 2008 (2) PLJR 538. In the said circumstances and in view of absence of any material to show that the goods were smuggled goods or were of any third country origin, the respondents authorities should not have detained the truck and betel nuts loaded on it nor they should have seized - 10 - the same which acts are clearly violative of the well settled principles of law. 22. Accordingly, this writ petition is allowed and the impugned order of detention and seizure of the betel nuts and the truck on which it was loaded are hereby quashed and the authorities are directed to release the truck and the betel nuts loaded thereon, immediately after receipt/production of a copy of this order. Harish (S.N. Hussain, J.)