Alpesh Navinchandra Shah vs State Of Maharashtra & Ors

The brief facts of the case are mentioned in seriatim as under:

Show Cause Notice dated 23.2.2005 was issued to the petitioner and his brother by the DRI, Mumbai Zonal Unit. Pursuant to the said show cause notice, the application for settlement under Section 127 B of the Customs Act, 1962, was filed on 19.4.2005 by M/s Perfect Trading Co. as Applicant and the petitioner, his brother and others as Co-Applicants before the settlement Commission, Mumbai.

The Settlement Commission, vide order dated 03.01.2006, rejected the prayer by adopting the reasoning narrated in the case of Vipul Gor, Proprietor of M/s Sonam Enterprises (Misc. Order No.12/2005 CUS dated 19.12.2005) wherein it was, inter alia, held that the Commission did not have any jurisdiction to make a recommendation to the Detaining Authority for revocation of a Detention order and further held that the petitioner and his brother would be at liberty to take recourse to any other legal remedy available to it for lifting of the detention order whether by the sponsoring authority, detaining authority or the courts. However, the Settlement Commission allowed the application for settlement to be proceeded with.

It is submitted that the orders of detention under COFEPOSA Act was issued in respect of the petitioner and his brother vide orders dated 12.1.2005 and 31.1.2005 respectively whereas they had made an application before the settlement Commission under section 127B of the Customs Act, 1962 on 19.4.2005. At the time of issue of the said Detention Orders, the Detaining Authority was not aware of the detentues' intention of approaching the Settlement Commission. The immunity from prosecution was granted to the petitioner and his brother by virtue of final order dated 8.3.2006 of Settlement Commission. Since the Settlement Commission is an authority to settle the duty liability with the discretion to grant immunity in respect of fine, penalty and prosecution, it cannot be construed that anybody approaching the Settlement Commission, ceases to take up Settlement Commission and the detention order under COFEPOSA Act both are distinctly different and objectives of both the orders are also different. Therefore, it is wrongly construed by the petitioner that once the Settlement Commission has granted unconditional immunities, the present detention order is contrary to the settled position of law.

(3) For the purposes of the time limit under section 28 and for the purposes of interest under section 28AA, in a case referred to in sub-section (1), the period commencing on and from the date of the application to the Settlement Commission under section 127B and ending with the date of receipt by the officer of customs of the order of the Settlement Commission sending the case back to the officer of customs shall be excluded.

It is, therefore, prayed that the detention order be quashed and set aside and directing the respondents to set the petitioner at liberty forthwith.

Therefore, when the courts are prima facie satisfied (i) that the impugned order is not passed under the Act under which it is purported to have been passed (ii) that it is sought to be executed against a wrong person, (iii) that it is passed for a wrong purpose, (iv) that it is passed on vague, extraneous and irrelevant grounds, or (v) that the authority which passed it had no authority to do so. Therefore, the impugned order does not suffer from any infirmity as stated above and accordingly, the present writ petition at pre-execution stage of detention order is not maintainable. Hence, the present writ petition is required to be dismissed.

The Settlement Commission was constituted with the aim and objective of settling the tax evasion issues and by virtue of disclosure by tax offender; they gain immunity from fine/penalty which is otherwise mandatory under the provisions of tax laws. But, such opportunity is only extended to one tax offender but not available to habitual smugglers. For the persons involved in smuggling activities, other than the provisions made for the prosecution under the Customs Act, 1962, an equal deterrent is emphasized under the provisions of the COFEPOSA Act, 1974 i.e. provisions for preventive detention. Such preventive detention prohibits smugglers from indulging in further smuggling activities. In the present case the investigation reveals the consistent involvement of the petitioner detenue and his brother Kamlesh Navinchandra Shah in smuggling activities, therefore, the Detaining Authority on the basis of evidence placed before him felt it necessary to issue the detention orders in respect of both the detenues in order to prevent them from pre-judicial activities in future. Accordingly the impugned order is justifiable in the eyes of law and present Writ Petition deserves to be dismissed.

The above judgment, in our view, squarely applies to the facts and circumstances of the case on hand. In the instant case, the petitioner's brother has already been released on the ground there was no sufficient cause for the detention of the detenu under Section 3(1) of the Act. The Government also accordingly revoked the detention order issued against him and the Government of Maharashtra, after considering the report of the Advisory Board and the material on record and in exercise of the powers conferred by Section 8(f) of the COFEPOSA Act revoked the aforesaid detention order and further directed that Kamlesh Navinchandra Shah be released forthwith on receipt of the said order dated 05.06.2006. In our opinion, the petitioner before us who is also similarly placed and who has also paid the customs duty etc. pursuant to the order of the Settlement Commission and got the unconditional immunity by the Settlement Commission is entitled to the same treatment. At the time of hearing, it is pointed out that the petitioner has ceased his activities in the field of import or export and has already paid the tax with penalty as demanded by the authority and there is nothing on record that the appellant has indulged in any such activity in the recent past. It is settled by law that the purpose of passing the detention order is to prevent the detenu from continuing his prejudicial activity but not to punish him. Considering the peculiar facts and circumstances of the case, no purpose will be served by continuing the detention order and we, therefore, allow the writ petition and quash and set aside the detention order bearing No. PSA 1204/21(2)/SPL-3(A) dated 12.01.2005.

The writ petition is ordered accordingly.