JHANTU DAS V. THE UNION OF INDIA & ORS

CWJC/3683/2011

AI Insights

The case revolves around the seizure of 11,200 Kgs of betel nuts by Customs officials, suspected to be smuggled from a third country due to the proximity of the seizure location to the Indo-Nepal border. The petitioner, JHANTU DAS, argued that the betel nuts were legally transported within India and were of a type commonly grown in the Northeast, with no restrictions on their movement. The Customs Department contended that the seizure was justified based on a reasonable belief of smuggling, citing factors like the absence of transport documents and the behavior of the vehicle occupants. The court examined the evidence and arguments presented by both parties, ultimately finding the Customs Department's case unconvincing and ruling in favor of the petitioner.

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 818569 (HC-PATNA)
• Appeal Type: Others
• Pronouncement Date: 19-05-2011
• Assessment Year: misc
• Other Referred Cases: Angou Golmei Vs. The Union of India & Ors.
• Laws Referred To: Customs Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: ARCHANA MEENAKSHI; ARCHANA SINGH
• Assessee Lawyers: PRABHAT
• Keywords: Customs Act; Reasonable belief; Smuggling; Third country origin; Seizure of betel nuts
• Section: 110; 110A

Judgement Text

" IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.3683 of 2011 JHANTU DAS . Versus THE UNION OF INDIA & ORS . ----------- For the Petitioner:- Mr. Prabhat Ranjan-I, Adv. For the Respondents:- Mr. Archana Meenakshi, Adv. Mr. Archana Singh, Adv. ---------------- 2. 19.05.2011 Heard learned counsel for the petitioner and the Union of India. The challenge in this application is to the seizure of 11,200 Kgs (said to be 10,920 Kgs by the Union of India) of betel nuts in 140 bags being transported on two different vehicles leading to institution of D R I Case No. 718 (ii) 05/Seiz/PRU/2010 on 9.1.2010. The petitioner is stated to be the proprietor of a firm registered with the West Bengal Commercial Taxes Department having C S T Number and VAT number authorized to deal in betel nuts. It claims to have discharged a consignment from Alipur Dwar to Kolkata. The consignment was intercepted by the Custom Officials on the Puakholi Thakurganj road. The goods are stated to have been seized in the reasonable belief that they were of third country origin being smuggled into the country as transportation was found to be in the vicinity of the porous Indo Nepal border. Learned counsel for the petitioner submits that betel nuts are a free trade/transport item within the 2 country and there are no restrictions for its movement. The betel nuts seized are of a nature and size grown in plenty in the North East region and Alipur Dwar as also Siliguri are well known as a wholesale market for the same. The seizure of the goods and the vehicle under Section 110 of the Customs Act is arbitrary. He submits that the words “if the proper officer has reason to believe” is not absolute in its nature dependent on the subjective satisfaction of the officer without further more. The fact that the goods may be transported on a road within the territory of India but which road is in the vicinity of an international border does not automatically lead to the conclusion that the goods have come into the country after crossing the international border. Something more is required to establish foreign origin. He strongly relies on a Division Bench of this Court in 1994(1) PLJR 800 (Angou Golmei Vs. The Union of India & Ors.), also under the Customs Act. It is submitted that the seizure itself being contrary to law and illegal at its inception, the question of relegating the petitioner to any alternative remedy under the Customs Act at this stage may not be entertained by the Court. Counsel for the Department of Custom from the counter affidavit sought to persuade the Court that the authorities have acted on the reasonable belief that the 3 betel nuts were of third country origin. The reasons for this belief have been spelt out in Paragraph-6 of the counter affidavit. The rest is a matter for investigation when it shall be determined if they were actually of third party origin or not. A prima facie suspicion of the Custom‟s authority at this stage, and who have experience in dealing with such matters everyday may not be interfered with by the Court. It has been emphasized that smuggling normally takes place on that road. The vehicle was intercepted after a hot chase. The driver and the Khalasi of the truck fled away. The truck was moving in the opposite direction from that claim. The movement was in the “wee” hours of the night. Different shape and size of betel nuts were recovered. It was not accompanied by transport documents and no person appeared to claim the ownership of the goods showing legal import. It was next urged that if there is a statutory procedure, more particularly under Section 110A of the Customs Act to seek release of the goods before the appropriate authority, the writ Court may not interfere and the petitioner may avail his remedies there. Under a notification dated 22.1.1996, under Section 11 of the Customs Act goods imported from Nepal are liable to confiscation on reasonable belief. Learned counsel for the Customs from outside 4 the counter affidavit submitted that third country origin betel nuts are different in shape and size. The petitioner has asserted in Paragraph-14 of the writ application that the betel nuts being transported in size were of a nature and quantity grown normally in the Indian territory as described therein. Dealing with the same, the Customs department in Paragraph-13 of the counter affidavit refuses to answer it. It is a matter of common knowledge that public transport vehicles especially carrying consignments, normally move in the night to avoid other vehicular traffic. Nothing much can be pointed out of the fact that the transportation was made at night. It was nothing unusual in this country that people scurried for shelter on seen a person in uniform whether of the police or customs, both for good and bad reason which may work either way. Therefore, nothing turns on the issue that the driver and the Khalasi fled away. Likewise, even if the argument of the Custom is to be accepted the direction in which the truck may have been facing does not lead to the conclusion that the goods were smuggled. Merely because the betel nuts size may have been of different shape and size does not lead to a conclusion of their being smuggled items. The Court finds it difficult to accept the contention of the department of Customs that merely because the 5 vehicle was seized in the Indian territory in the vicinity of the porous international border, there shall be a presumption of smuggled goods. There has been no whisper for its prima facie belief that the vehicles had come after crossing the international border and the trucks were normally loaded for the purpose at a location near the border. If the goods were of Indian origin and were transported within the country with no restriction on its movement, the question of carrying any custom authorization does not arise. If that be so, the custom authorities have no jurisdiction to question non availability of any internal documents required for movement within the country which is the responsibility of the concerned authorities. Had there been a whisper of a suggestion for the satisfaction of the third country nature of the origin of the betel nuts as distinct from that grown within the country, perhaps the Court would have dismissed the writ petition outright. It has been argued on behalf of the Customs that third country betel nuts are of different nature and origin. The counter affidavit is completely silent of any reason to reasonably believe the betel nuts of foreign origin visible to the naked eye with features distinguishing it from Indian origin betel nuts. That brings to the fore the meaning and scope 6 of the words „reason to believe” in Section 110 of the Customs Act as observed. An iota of a suggestion for a prima facie belief from a visual impact of the nature of the betel nuts seized in the counter affidavit would have been sufficient for the Court to uphold the contention of the customs department for invoking Section 110 of the Customs Act. Unfortunately, except for making that statement and which was the only crucial pleading required, the customs department has tried to hedge around the issue which leaves the Court dissatisfied that it had any reasonable belief. In the case of Angou Golmei (supra) relied upon by the petitioner, a Division Bench had held at Paragraph-21 as follows:- “21. The expression “reasonable belief” or “reason to believe” occurs in several statutes. Reference may be made to Section 147(a) of the Income Tax Act 1961; Section 178A of the Sea Customs Act, 1978; Section 66 of Gold (Control) Act 1968 and so on. In Calcutta Discount Col. Ltd. V. Income Tax Officer (AIR 1961 Supreme Court, 372), a case under Section 34 of the Income Tax Act, 1922 corresponding to Section 147(a) of the Income Tax Act, 1961, the Apex Court held: “The expression „reason to believe‟ postulates belief and the existence of reason for that belief. The belief must be held in good faith; it cannot be merely a pretence. The expression does not (sic) purely subjective satisfaction of the Income Tax Officer.” In Sheonath Singh v. Appellate Assistant Commissioner of Income Tax (Central) Calcutta (AIR 1971 Supreme Court 2451) it was held that the words “reason of believe” suggest that the belief must of an 7 honest and reasonable person based upon reasonable grounds and the officer may act on direct or circumstantial evidence but not on mere suspicion, gossip or rumour. It was further held that if the officer concerned acts on material which is irrelevant then he acts without jurisdiction.” In that case as also presently it was emphasized that custom officials who are present on the spot and who have wide experience in the matter once they have a reasonable belief, the Court cannot interfere by substituting its opinion. The Court rejected the argument holding that there has to be prima facie material for the same. The Division Bench at Paragraph-23 observed that merely because there may be a belief that spice of a particular nature were not normally grown in the north east region any such spice coming from that region must be smuggled can not be upheld. The seizure then rests not on basis of identification of the goods as being of foreign origin but on assumptions and presumptions. It was held that the Court could not go simply by the experience and expertise of the custom officials holding as follows:- “23. ………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. Sufficiency of reasons or grounds is not justifiable but the existence of the reasons and the grounds certainly is.” 8 In conclusion, the Court holds that the very seizure of the consignment was without any authority of law. The department of Customs has completely failed to raise any iota of doubt in the mind of the Court, based on its experience and expertise, that it had prima facie material in support of its reasonable belief that the betel nuts were of foreign origin except unfounded suspicion. The seizure of the consignment and the DRI Case No. 718(ii) 05/Seix/PRU/ 2010 are therefore held to be illegal. The department of Custom is directed to forthwith release the consignment and the vehicle of the petitioner. The writ application stands allowed. P. Kumar (Navin Sinha, J.) "