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Assistant Collector of Customs, Jamnagar and ors. Vs. Karsan Mohmed Subhania of Salaya and ors. - Court Judgment

LegalCrystal Citation
SubjectCustoms
CourtGujarat High Court
Decided On
Case NumberCivil Revision Application Nos. 1971 and 1972 of 1982
Judge
Reported in1984(3)ECC211; 1983(13)ELT891(Guj); (1983)2GLR865
ActsCustoms Act, 1962 - Sections 108, 110 and 124
AppellantAssistant Collector of Customs, Jamnagar and ors.
RespondentKarsan Mohmed Subhania of Salaya and ors.
Appellant Advocate H.M. Mehta and; R.A. Mehta, Advs.
Respondent Advocate P.M. Raval, Adv.
Cases ReferredUnion of India v. A. V. Narasimhalu
Excerpt:
customs - seizure--jurisdiction--seizure of fishing boats by customs authorities--civil court, whether has jurisdiction to order release on execution of bond--customs act (52 of 1962), sections 108, 110, 124. - - 4. the trial court came to the conclusion that when the seizure panchnama was effected and the fishing boats were seized, there was nothing on record to show that the fishing boats in question were involved in transportation of smuggled goods and therefore, according to the trial court, the seizure was clearly prima facie baseless. the learned appellate judge also held that he did not find any good reason to differ from the view taken by the trial court. thus it is clear that both the lower courts have failed to exercise the jurisdiction vested in them in not taking into..........jurisdiction in giving the mandatory directions to the customs authorities to release the fishing boats seized by them on execution of the surety bonds and pr bonds by the plaintiffs. 6. it was contended that the civil court had no jurisdiction to direct the customs authorities to release the seized fishing boats on execution of the bonds by the plaintiffs. reliance is placed on the decision of the supreme court in the case of union of india v. a. v. narasimhalu reported in 1969 (2) sc cases 658. the following observations in paragraph 8 of the aforesaid judgment have been relied upon : '.....normally an action of an administrative authority interfering with the right to property may be challenged by resort to a civil court. yet in the case of a right which depends upon a statute, the.....
Judgment:

1. The short questions which arises in those proceedings is as to whether the civil court has the jurisdiction to direct the Customs Authorities to release the fishing boats which were seized by the Customs Authorities during the course of investigation, on execution of bond by the plaintiff If yes, had the jurisdiction been properly exercised in those two cases.

2. The Customs Authorities seized two fishing boats, namely, S. V. Pankhde and S. V. Usmani, on June 29, 1982. A seizure Panchanama of the same was effected on the same day. The boats were seized on the allegation that they were used for transporting contraband goods from another vessel, namely, M. S. V. Sagar Laxmi and that the boats were liable to confiscation under the provisions of the Customs Act. It appears that the statements of the opponents-plaintiffs were recorded under the provisions of Section 108 of the Customs Act, 1962 ('the Act' for short) on the same day. On August 13, 1982 both the opponents filed two separate civil suits being Civil Suits Nos. 744 and 745 of 1982 in the court of Civil Judge (SD). Jamnagar, and prayed for a declaration that the action of seizure taken by the Customs Authorities was illegal and void and prayed for temporary mandatory injunction to the effect that the Customs Authorities be directed to release the fishing boats on execution of bond for the amount mentioned in the seizure Panchanama made at the time of seizure. On the same day an application exhibit 5 for interim relief was filed wherein after hearing the parties, the trial court passed the order on September 14, 1982 and directed the Customs Authorities to release the fishing boats on execution of surety bonds and PE bonds for the amounts mentioned in the order.

3. The Customs Authorities felt aggrieved by the said order and preferred two different appeals being Civil Misc. Appeal Nos. 118 and 119 of 1982 in the Court of District Judge, Jamnagar, who dismissed both the appeals by his common judgment and order dated October 24, 1982. It is against this order that the Assistant Collector of Customs and the Union of India have preferred those two revision applications. As common questions of fact and law arise, parties requested to dispose of these two revision applications by a common judgment. Arguments advanced by the counsels for both the sides are common; the points raised and to be determined are also common. Hence I am disposing of these two revision applications by this common judgment.

4. The trial court came to the conclusion that when the seizure panchnama was effected and the fishing boats were seized, there was nothing on record to show that the fishing boats in question were involved in transportation of smuggled goods and therefore, according to the trial court, the seizure was clearly prima facie baseless. The learned appellate Judge also held that he did not find any good reason to differ from the view taken by the trial court. In this connection it was submitted that the lower courts have overlooked the points raised in the written reply submitted by the Department. In the written reply in paragraph 4, it is stated in clear terms as follows :

'The real facts are that fishing boat was seized as it was used for transporting contraband goods from M. S. V. Sagar Laxmi. This fact is admitted and proved from statements recorded under section 108 of Customs Act, 1962. Boat is liable to confiscation under Customs Act. As per section 124 of Customs Act show cause notice is being issued. Since the case is under investigation proceedings will be taken within stipulated time.....'

Had the lower courts taken into consideration the aforesaid averments made in the written reply, it would have been clear that there was not only prime facie material with the Customs Authorities but there was admission of the plaintiffs themselves made in statements recorded under the provisions of Section 108 of the Act. Be it realized that the statements recorded by the Customs Officers under the provisions of Section 108 of the Act are admissible in evidence. Thus it is clear that both the lower courts have failed to exercise the jurisdiction vested in them in not taking into consideration the case put forth by the other side in its written reply.

5. It was also pointed out by the learned counsel for the applicants that further actions in accordance with law are being taken and a show cause notice was about to be issued when the reply was filed. (It is stated at the Bar that show cause notice under Section 124 of the Act has already been issued). If one looks at the provisions of the two Sections 110 and 124 of the Act, it would be clear that after the seizure of the contraband goods or a vehicle, show cause notice under Section 124 is required to be given within a period of six months. Such period can be extended by the Collector of Customs for a further period not exceeding six months on sufficient cause being shown. In this case the fishing boats have been seized on June 29, 1982. The plaintiffs did not approach the Customs Authorities with a prayer that the fishing boats be released on their execution of the surety bonds and PR bonds. They rushed to the court and on August 30, 1982, that is, immediately after the expiration of two months, filed aforesaid civil suits. A copy of the plaint of Civil Suits No. 745 of 1982 has been placed on record wherein it is not even averred that the Customs Officers had no reason to believe that the vessels in question were used as a means of transport for carrying the smuggled goods. Thus there is not even a prima facie case in favour of the plaintiffs. When the plaintiffs have not made out even a prima facie case in the plaint itself, it becomes clear that both the courts below have exceeded their jurisdiction in giving the mandatory directions to the Customs Authorities to release the fishing boats seized by them on execution of the surety bonds and PR bonds by the plaintiffs.

6. It was contended that the Civil Court had no jurisdiction to direct the Customs Authorities to release the seized fishing boats on execution of the bonds by the plaintiffs. Reliance is placed on the decision of the Supreme Court in the case of Union of India v. A. V. Narasimhalu reported in 1969 (2) SC Cases 658. The following observations in paragraph 8 of the aforesaid judgment have been relied upon :

'.....Normally an action of an administrative authority interfering with the right to property may be challenged by resort to a Civil Court. Yet in the case of a right which depends upon a statute, the jurisdiction of the civil court to grant relief may be express provision or by clear implication of the statute be excluded. Where a statute re-enacts a right or liability existing at common law, and the statute provides a special form of remedy, exclusion of the jurisdiction of the civil court to grant relief in the absence of an express provision, will not be readily inferred. Where, however, a statute creates a new right or liability and it provides complete machinery for obtaining redress against erroneous exercise of authority, jurisdiction of the civil court to grant relief is barred......'

7. Under the Customs Act, officers of the Customs Department have power to seize the goods or vehicle on a reasonable belief that the goods are contraband goods and the vehicle in question is used as a means of conveyance in transportation of such contraband goods. There are administration instructions to release the goods or vehicle even on the execution of the bond by the party concerned pending the investigation and inquiry by the Officers of the Customs Department. It provides for adjudication and after the adjudication when an under is passed, it can be challenged in appeal and it can further be challenged by way of revision to the Central Board of Revenue and again by way of revision to the Central Government. In this view of the matter, it is clear that the Customs Act is a complete Code in itself and it creates a new liability and it provides for complete machinery for obtaining redress against erroneous exercise of jurisdiction. Therefore jurisdiction of the Civil court is by implication barred, save and except in the cases referred to by the Supreme Court in paragraph 9 of the aforesaid judgment. Paragraph 9 reads as follows :

'We, however, deem it necessary to observe that the civil courts have jurisdiction to examine cases in which the Customs Authority has not complied with the provisions of the statute or the officer of customs has not acted in conformity with the fundamental principles of judicial procedure or the authority has acted in violation of the fundamental principles of judicial procedure or he has made an order which is not within his competence or the statute which imposes liability is unconstitutional, or where the order is alleged to be mala fide. A civil suit will lie for obtaining appropriate relief in these cases.'

In these two revision applications, neither in the plaint nor even during the course of arguments, any such case, as mentioned by the Supreme Court, is made out. Therefore it is clear that in these cases, prima facie, the civil court will not have jurisdiction to entertain the suits.

8. In the cases where the contraband goods are seized or the means of conveyance of such goods, i.e. the vehicles or vessels are seized by the Customs Department, ordinarily, the civil courts should be slow to interfere with the course of investigation of the Customs Authorities. It is only in the exceptional cases narrated by the Supreme Court and referred to hereinabove, that the Civil Courts will have jurisdiction to entertain suits against certain action of the Officers of the Customs Department. It should further be realised that the investigation into the cases of smuggling and such other nefarious activities is not an easy task. Sometimes the Customs Officers have to act at the risk of their lives too. As such activities are carried on clandestinely and with utmost secrecy, normally the evidence will not be easily available. That is the reason why that the Legislature has given six months time to the Customs Authorities to retain the contraband goods and/or vehicles. This period may be further extended by the Collector of Customs for a period of six months on sufficient cause being shown. During this time the Customs Authorities are required to give a show cause notice under Section 124 of the Act, calling upon the person concerned as to only the goods and/or vehicle in question should not be confiscated. Ordinarily therefore, the civil courts should not rush to pass orders at the intervening stage so as to cause interference with the investigation being carried out by the Customs Authorities unless of course, an exceptional case, as laid down by the Supreme Court, is made out by the plaintiffs.

9. In this view of the matter, the order passed by both the courts below directing the Customs Authorities to release the fishing boats seized by them on execution of the surety bonds and PE Bonds, will be required to be quashed and set aside and the same is hereby quashed and set aside. Rule is made absolute with no order as to costs.

10. Before I part with this judgment, reference to certain details are required to be placed on record. Both these civil revision applications were fixed for final hearing on December 7, 1982. The respondents-original plaintiffs were duly served. But both of them sent two separate applications by registered A.D. post. Both these two applications are in Gujarati and they are verbatim same. In those two applications prayer for adjournment was made and inter alia it was also stated that, since I was working as an advocate of the Customs Department (as Additional Central Government Standing Counsel) while in practice at that time certain revision applications involving similar questions have been dealt with by me and therefore in the interest of justice, the cases, should be heard by some other Court. Below these applications that is only thumb impression which is not even identified by anyone. Shri P. N. Ravals, counsel for the respondents filed his appearance later on. About these applications I had put questions to Shri P. N. Raval, the counsel appearing for the respondents, and asked him as to whether he wishes that on this ground the matter should be heard by some other court and he stated that he had no objection whatsoever if the matters were heard and decided by me. Therefore I have heard and decided those matters. It may be noted that such an application or prayer without there being any basis whatsoever would amount to interference with the course of justice and in a given case, it may amount to contempt of court also. However, in those cases no such question arises.


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