‘Reason to Believe’ must be based on Acceptable Materials: Allahabad HC quashes Seizure of Areca Nuts [Read Order]

A Division Bench of the Allahabad High Court, allowing the writ petition by Jaymatajee Enterprise (Seller) And Another against the seizure order issued by the Customs Department, allegedly, without sufficient reasons to believe that the Areca Nuts in question are imported illegally, held that the reasons to believe must be based on acceptable materials. The petitioner was supplying 17920 KGs of Areca Nuts purchased from a seller who had purchased betel nuts from an E-Auction held by the Customs Department. The goods were valued for a total consignment value of Rs. 26,56,800/-. The department seized the goods by intercepting the truck. The officers informed the Truck driver that they had received specific information that ‘Areca Nuts’ of foreign origin were being transported. The ‘reason to believe’ so, as recorded by the Customs was that, ‘some bags had inscriptions in foreign language’ which led to a belief that the areca nuts were of foreign origin. The opinion of some local dealers were also recorded in the panchnama as reason to believe that the supari appeared to be imported illegally from Bangladesh in violation of Section 11 of the Customs Act read with the provisions of Foreign Trade Regulation Act. The petitioners contended that, as no bonafide ‘reasons to believe’ existed, the seizure of the goods was wholly arbitrary and illegal. Counsel for the petitioner, also placed reliance on the letter issued by ICAR-National Bureau of Plant Genetic Resources (Independent Council of Agricultural Research) to the effect that it is not possible to determine the country of origin of betel nuts. M/s Ayesha Exports Vs. The Union of India was also cited wherein it was recorded that there was no standardized laboratory test for determining the country of origin. The counsel for the respondents has argued that in view of the availability of alternative remedy of appeal against the order of provisional release, the writ petition is liable to be dismissed. Regarding admissibility, the Court observed that the petitioners have approached the statutory authority for release of goods and the statutory authority has, in fact, passed an order and the validity of the said order is under challenge and the petitioners have not approached the Court at the first instance. Furthermore, the petitioners have carved out a case for exercise of powers under Article 226 under the well known exceptions. Thus held that, the objections of the counsel for the respondents is liable to be rejected, allowing the writ petition to be admitted and heard. In regard to the validity of seizure order, “it is clear from the statute that the power of seizure of goods under Section 110 of the Customs Act can be resorted to only when the Officer exercising the said power has ‘reasons to believe’ that the goods are liable to confiscation”, observed the court. The certificates issued by the Ministry of Agriculture and Farmer Welfare as well as by ICAR to the effect that there is no mechanism available to trace the country of origin of ‘Areca Nuts’ and there is no laboratory test available for the same and further on the basis of examination by naked eye it cannot be conclusively determined with regard to origin of the ‘Areca Nuts’, were taken into consideration and it was held that there was no prima facie reason to believe that the goods were of foreign origin. In light of the prima facie inconclusively determinable nature of goods seized as to being foreign or domestic and lack of sufficient reasons to believe on the basis of acceptable materials, the bench comprising Justice Shashi Kant Gupta and Justice Pankaj Bhatia held that, the seizure order is not valid in law and quashed the impugned order. Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates.

‘Reason to Believe’ must be based on Acceptable Materials: Allahabad HC quashes Seizure of Areca Nuts [Read Order]

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‘Reason to Believe’ must be based on Acceptable Materials: Allahabad HC quashes Seizure of Areca Nuts [Read Order]

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