Facts of the Case

M/s Unique Industrial Enterprises Pvt. Ltd. approached the Telangana High Court under Article 226 of the Constitution of India challenging action connected with goods valued at approximately ₹8,50,47,384, which, according to the petitioner, had been seized illegally, arbitrarily, without jurisdiction and without authority of law.

The petitioner asserted that the seizure violated the principles of natural justice, Articles 14 and 19(1)(g) of the Constitution of India, provisions of the Customs Act, 1962, relevant notifications and the Foreign Trade Policy. It sought release of the goods and permission for their further export.

The proceedings concerned goods stated to have been exported to the premises of respondent No. 4 under seven Bills of Export dated 31 December 2021 for outward export to the buyer, with reliance placed upon Para 1.24 of the Foreign Trade Policy 2015–20.

The petitioner also challenged the summons dated 17 January 2022 issued by the first respondent and sought a direction restraining the Directorate of Revenue Intelligence authorities from continuing further investigation on the allegation that the investigation had been initiated without jurisdiction and without authority of law.

A further relief was sought for permitting the concerned banks to defreeze the petitioner’s bank accounts.

During the proceedings, the Superintendent of Customs (SIIB), Office of the Principal Commissioner of Customs, Hyderabad, and the Principal Commissioner of Customs, Hyderabad were impleaded as respondent Nos. 8 and 9 pursuant to the Court’s order dated 22 September 2022 in I.A. No. 3 of 2022.

Issues Involved

The principal issues arising from the writ petition were:

  1. Whether the seizure of goods valued at approximately ₹8.50 crore was illegal, arbitrary, without jurisdiction or without authority of law.
  2. Whether the petitioner was entitled to release of the seized goods and permission to further export them.
  3. Whether the summons dated 17 January 2022 issued by the DRI authority was liable to be quashed.
  4. Whether further investigation by the DRI authorities should be restrained on the ground of alleged lack of jurisdiction and authority of law.
  5. Whether the petitioner was entitled to directions for defreezing its bank accounts.
  6. Whether any substantive controversy remained for adjudication in the writ petition after the order passed in I.A. No. 4 of 2022 and in view of the ongoing adjudication process before the competent adjudicating authority.

Petitioner’s Arguments

The petitioner’s case, as reflected from the reliefs sought in the writ proceedings, was that the goods valued at approximately ₹8.50 crore had been seized illegally, arbitrarily, without jurisdiction and without authority of law.

It contended that the impugned action was contrary to the principles of natural justice, violated Articles 14 and 19(1)(g) of the Constitution of India, and was inconsistent with the provisions of the Customs Act, 1962, relevant notifications and the Foreign Trade Policy.

The petitioner sought release of the goods and permission to export them further. In its interlocutory prayer, it specifically referred to the goods covered under seven Bills of Export dated 31 December 2021 and relied upon Para 1.24 of the Foreign Trade Policy 2015–20.

The petitioner further sought quashing of the summons dated 17 January 2022 and contended that the investigation had been initiated without jurisdiction and without authority of law. It also sought relief concerning the freezing of its bank accounts.

Respondents’ Arguments / Position

The final order records appearance of counsel representing respondent Nos. 1, 2 and 7 and separate counsel for respondent Nos. 8 and 9. The order, however, does not set out any detailed respondent-wise substantive arguments on the merits of the seizure, summons, investigation or freezing of bank accounts.

The material position specifically recorded by the High Court was that the Court had been informed that the adjudication process was being undertaken by the adjudicating authority.

Accordingly, it would not be accurate to attribute detailed merits-based arguments to the respondents beyond what is expressly recorded in the order.

Court Order / Findings

The Telangana High Court noted that, in view of the order passed on the same day in I.A. No. 4 of 2022, nothing tangible survived for adjudication in the writ proceeding.

The Court expressly stated that it was not expressing any opinion on the merits because it had been informed that the adjudication process was being undertaken by the adjudicating authority.

Significantly, the Court directed that all contentions were kept open.

Consequently:

  • the writ petition was disposed of;
  • no costs were awarded; and
  • pending miscellaneous petitions, if any, were closed.

The concluding page of the uploaded order also records that W.P. No. 5747 of 2022 was disposed of without costs.

Important Clarification

This order should not be understood as a judicial determination on the legality or illegality of the seizure of goods, validity of the DRI summons, jurisdiction of the investigation, freezing of bank accounts, or the petitioner’s substantive entitlement to export the goods.

The High Court expressly refrained from giving any opinion on merits. The writ petition was disposed of because, in view of the order passed in I.A. No. 4 of 2022, nothing tangible survived for adjudication and the Court was informed that the adjudication process was being undertaken by the competent authority.

The statement that “all contentions are kept open” is legally significant. It preserves the parties’ respective contentions for consideration in the appropriate adjudication process or other proceedings available in law.

Further, the uploaded order does not reproduce the detailed contents of the order passed in I.A. No. 4 of 2022. Therefore, no additional conclusion regarding the precise relief granted in that interlocutory application should be inferred solely from this final disposal order.

Sections Involved

·         Article 226 of the Constitution of India — Invoked for writ jurisdiction and relief in the nature of mandamus and other appropriate directions.

·         Article 14 of the Constitution of India — Invoked by the petitioner in alleging arbitrary and unlawful action.

·         Article 19(1)(g) of the Constitution of India — Invoked in relation to the constitutional right to practise a profession or carry on an occupation, trade or business, subject to constitutional limitations.

·         Customs Act, 1962 — The petitioner alleged that the seizure and related action were contrary to the statutory customs framework. The uploaded final order does not identify a specific substantive section of the Customs Act as the basis of its final finding.

·         Para 1.24 of the Foreign Trade Policy 2015–20 — Specifically relied upon in the petitioner’s interlocutory prayer concerning outward export of the goods.

·         Section 151 of the Code of Civil Procedure, 1908 — Referred to in relation to the interlocutory application seeking directions for release and export of the goods.

Link to download the order -

https://www.mytaxexpert.co.in/uploads/1783332070_1169compressed.pdf

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