Case Note & Summary
The petitioners, Leyla Mohmoodi and Mojtaba Ebrahim Gholami, through their constituted attorney, filed a writ petition under Article 226 of the Constitution of India before the Bombay High Court challenging the seizure and disposal of their gold jewellery by the Customs authorities. The petitioners are Iranian nationals who arrived at Mumbai Airport on 25th February 2020 with gold jewellery weighing 1028 grams. The jewellery was seized by the Customs on the ground that it was not declared and was liable to confiscation under Section 111 of the Customs Act, 1962. The petitioners contended that the jewellery was for personal use and they intended to re-export it. The Additional Commissioner of Customs passed an order on 31st March 2021 confiscating the gold and imposing a fine of Rs. 10 lakhs for redemption. The petitioners appealed to the Commissioner of Customs (Appeals), who by order dated 30th September 2021 upheld the confiscation but reduced the fine to Rs. 5 lakhs. The petitioners then filed a revision application before the Government of India, which by order dated 19th September 2022 allowed the revision, set aside the confiscation, and permitted re-export of the gold on payment of a fine of Rs. 5 lakhs. However, when the petitioners sought to comply with the order, they were informed that the gold jewellery had already been disposed of by the Customs on 31st March 2022, i.e., before the revision order and without any notice to the petitioners. The petitioners argued that the disposal was illegal as it was done without an order of confiscation and without notice, violating Section 111 of the Customs Act and their right to property under Article 300A. The respondents contended that the disposal was in accordance with the Customs Act and that the petitioners had not challenged the seizure. The court analyzed the provisions of the Customs Act, particularly Sections 110, 111, 124, and 125, and held that disposal of seized goods before an order of confiscation and without notice is illegal. The court emphasized that the right to property under Article 300A is a constitutional right and cannot be deprived without authority of law. Since the gold could not be returned, the court directed the respondents to pay the petitioners the current market value of 1028 grams of gold jewellery as on the date of payment, along with interest at 6% per annum from the date of disposal until payment. The court also directed the respondents to pay costs of Rs. 1 lakh to the petitioners.
Headnote
A) Customs Law - Seizure and Confiscation - Section 111 Customs Act, 1962 - Disposal of Seized Goods - The court considered whether disposal of gold jewellery without notice and before confiscation order is valid - Held that such disposal is illegal and violative of Article 300A and principles of natural justice (Paras 1-3, 27-59). B) Constitutional Law - Right to Property - Article 300A Constitution of India - Deprivation of Property - The court held that disposal of seized goods without notice and before confiscation order amounts to deprivation of property without authority of law - Held that the petitioners are entitled to compensation equivalent to current market value (Paras 2, 55-59). C) Customs Law - Re-export of Goods - Section 125 Customs Act, 1962 - Option to Pay Fine - The court noted that the Revisionary Authority had allowed re-export of gold on payment of fine, but the goods had already been disposed - Held that the respondents must pay current market value as the goods cannot be returned (Paras 12-16, 55-59).
Issue of Consideration
Whether the action of the respondents to sell/dispose of the gold jewellery of the petitioners without notice and before an order of confiscation under Section 111 of the Customs Act, 1962 is legal and valid.
Final Decision
The court allowed the writ petition, holding that the disposal of gold jewellery without notice and before an order of confiscation was illegal. The court directed the respondents to pay the petitioners the current market value of 1028 grams of gold jewellery as on the date of payment, along with interest at 6% per annum from the date of disposal (31.03.2022) until payment, and costs of Rs. 1 lakh.
Law Points
- Right to property under Article 300A
- Seizure and confiscation under Customs Act
- 1962
- Natural justice
- Notice before disposal
- Re-export of goods
- Revisionary authority's order
