Patna High Court
A.S. Trading And Company vs The Union Of India on 25 April, 2025
Author: Rajeev Ranjan Prasad
Bench: Rajeev Ranjan Prasad, Ashok Kumar Pandey
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.17756 of 2024
======================================================
A.S. Trading and Company, having its Registered office at House No. 78,
Harin Kalita Path, Tokobari, Kamrup, Assam 781009, through its Proprietor
Pradeep Shrinath Maurya, aged about 35 years, Male, Son of Shrinath
Maurya, Resident of Jagwanti Palace, near Royal Club, Bharat Nagar, Juna
Pardi, PS Kalamna, District Nagpur, Maharastra.
... ... Petitioner
Versus
1. The Union of India, through the Secretary, Ministry of Finance, Department
of Revenue, Central Board of Excise and Customs, New Delhi.
2. The Chief Commissioner of Customs, Central Revenue Building, Birchand
Patel Path, Patna.
3. The Commissioner of Customs (Preventive), Head Quarters, 5 th Floor,
Central Revenue Building, Birchand Patel Path, Patna.
4. The Additional Commissioner Cum Adjudicating Authority, Office of the
Commissioner of Customs (Preventive), HQRS, 5th Floor, Central Revenue
Building, Birchand Patel Path, Patna.
5. The Assistant Commissioner of Customs (Preventive), Division Forbishganj,
District Forbishganj, Bihar.
6. The Inspector of Customs/ Seizing Officer, Kishanganj Circle Office,
District Kishanganj, Bihar.
... ... Respondents
======================================================
with
Civil Writ Jurisdiction Case No. 17758 of 2024
======================================================
Maa Kamakhya Traders having its principal place of business at P.P. No. 308,
Dag No. 178, Rupahihat, P.S. Mouaz, Khatuwal Nagaon, Assam through its
Authorized Signatory Pradeep Shrinath Maurya, aged about 35 years, Male,
son of Shrinath Maurya, resident of Jagwanti Palace, near Royal Club, Bharat
Nagar, Juna Pardi, P.S Kalamna, District Nagpur, Maharastra.
... ... Petitioner
Versus
1. The Union of India through the Secretary, Ministry of Finance, Department
of Revenue, Central Board of Excise and Customs, New Delhi.
2. The Chief Commissioner of Customs, Central Revenue Building, Birchand
Patel Path, Patna.
3. The Commissioner of Customs (Preventive), Head Quarters, 5 th Floor,
Central Revenue Building, Birchand Patel Path, Patna.
4. The Additional Commissioner Cum Adjudicating Authority, Office of the
Commissioner of Customs (Preventive), HQRS, 5th Floor, Central Revenue
Building, Birchand Patel Path, Patna.
5. The Assistant Commissioner of Customs (Preventive), Division
Muzaffarpur, District Muzaffarpur, Bihar.
6. The Inspector of Customs/ Seizing Officer, Muzaffarpur, Customs
Patna High Court CWJC No.17756 of 2024 dt.25-04-2025
2/16
(Preventive) Division, District Muzaffarpur, Bihar.
... ... Respondents
======================================================
Appearance :
(In Civil Writ Jurisdiction Case No. 17756 of 2024)
For the Petitioner : Mr. Prabhat Ranjan, Advocate
For the Respondents : Mr. Additional Solicitor General
Mr. Anshuman Singh, Senior SC
(In Civil Writ Jurisdiction Case No. 17758 of 2024)
For the Petitioner : Mr. Prabhat Ranjan, Advocate
For the Respondents : Mr. Additional Solicitor General
Mr. Anshuman Singh, Senior SC
======================================================
CORAM: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD
and
HONOURABLE MR. JUSTICE ASHOK KUMAR PANDEY
ORAL JUDGMENT
(Per: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD)
Date : 25-04-2025
The matter has been heard again today.
2. At the outset, it is recorded that learned counsel for
the petitioners seeks to withdraw I.A. No. 1 of 2025.
3. There is no objection to the same, hence, I.A. No. 1 of
2025 is dismissed as withdrawn.
4. These two writ applications have been preferred
seeking the following reliefs:-
CWJC No. 17756 of 2024
"(i) Quashing of the Seizure dated
22.11.2023
corresponding to Kishanganj
Unit Case No. 21/KNE/23-24 dated
22.11.2023 (Annexure P/4) whereby
23975 kgs of Dried Areca Nuts contained
in 350 Bags along with Tata Truck
bearing Registration No. UP 83 CT-5704
have been seized under Section 110 of the
Patna High Court CWJC No.17756 of 2024 dt.25-04-2025
3/16
Customs Act, for alleged violation of
Section 7, 11, 46 and 47 of Customs Act,
1962 read with Section 3 (2) of the
Foreign Trade (Development and
Regulation) Act, 1992 in the course of
Inter State Transportation from Assam to
Delhi;
(ii) Quashing of the part of Provisional
Release Order No. 17/2024 dated
28.02.2024 to the extent that the
Adjudicating Authority has imposed, vide
Condition No. 9.III to submit “END USE
CERTIFICATE” issued by the
Industrial/Processing Unit with regard to
the released Betel Nuts for the reason that
the Seized Betel Nuts were found to be
sub standard and unsafe as per FSSAI
Report and, misapplying the provisions of
Food Safety and Standards Act, 2006, the
goods have been held to be not fit for sale
for direct human consumption rather as a
condition for provisional release, its sale
has been restricted only for
Industrial/Processing Unit;
(iii) Vacation of the seizure dated
22.11.2023 and consequential discharge
of the Bank Guarantee and the Bond
furnished by the petitioner to secure the
provisional release of the seized goods;
and
(iv) Restraining the Respondents from
giving effect to or taking any coercive
action arising out of seizure dated
22.11.2023 during the pendency of the
present writ application and/or without
Patna High Court CWJC No.17756 of 2024 dt.25-04-2025
4/16
the leave of this Hon’ble Court.”
CWJC No. 17758 of 2024
“(i) Quashing of the Seizure dated
22.11.2023 corresponding to Muzaffarpur
Unit Case No. 11/2023-24 dated
22.11.2023 (Annexure P/6) whereby
25,160 Kgs of Assam Dried Areca Nuts
contained in 370 Bags along with Tata
Truck bearing Registration No. UP 78
DN-8315 have been seized under Section
110 of the Customs Act, for alleged
violation of Section 7, 11, 46 and 47 of
Customs Act, 1962 read with Section 3
(2) of the Foreign Trade (Development
and Regulation) Act, 1992 & Government
of India, Ministry of Finance, Notification
No. 09/1996 Cus. (NT) dated 22.01.1996
issued under Section 110 of the Customs
Act, 1962 in the course of Inter State
Transportation from Assam to Delhi;
(ii) Quashing of the part of Provisional
Release Order No. 15/2024 dated
28.02.2024 to the extent that the
Adjudicating Authority has imposed, vide
Condition No. 9.III to submit “END USE
CERTIFICATE” issued by the
Industrial/Processing Unit with regard to
the released Betel Nuts for the reason that
the Seized Betel Nuts were found to be
substandard and unsafe as per FSSAI
Report and, misapplying the provisions of
Food Safety and Standards Act, 2006, the
goods have been held to be not fit for sale
for direct human consumption rather as a
condition for provisional release, its sale
Patna High Court CWJC No.17756 of 2024 dt.25-04-2025
5/16has been restricted only for
Industrial/Processing Unit;
(iii) Vacation of the seizure dated
22.11.2023 and consequential discharge
of the Bank Guarantee and the Bond
furnished by the petitioner to secure the
provisional release of the seized goods;
and
(iv) Restraining the Respondents from
giving effect to or taking any coercive
action arising out of seizure dated
22.11.2023 during the pendency of the
present writ application and/or without
the leave of this Hon’ble Court.”
5. For sake of brevity, the facts and documents have
been referred by learned counsel for the parties from CWJC No.
17756 of 2024. It is not in dispute that in both the writ
applications, the seizure memos have been drawn in the identical
manner.
6. We reproduce the seizure memo dated 22.11.2023
enclosed as Annexure- ‘P/4’ in CWJC No. 17756 of 2024
hereunder for a ready reference:-
“SIEZURE MEMO
Unit Case No. 21/KNE/23-24 circle: Kishanganj Date: 22.11.2023
1. Import/Export : Import
2. claimed/Unclaimed : Claimed
3. Date, time & place of detention : 21.11.2023: 22:00 Hrs; Bus Stand,
Kishanganj
4. Date, time & place of Seizure : 22.11.2023 at 14.30 Hrs. Customs (P),
Circle, Kishanganj
Patna High Court CWJC No.17756 of 2024 dt.25-04-2025
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5. Name & Address of the person (s)
From whom goods recovered : (i)Ravindra Kumer. S/o-Sukhmesh Singh, Vill-
Nagla Kindar, Post- Pudari. Thana-Alau
Mainpuri UP. 205247 (Driver of Truck bearing
Reg. No.: UP-83CT-5074).
(ii) A.S. Trading & Company (GSTIN:
18ARQPM3852R1ZQ), House No.: 78, Harin
Kalita Path Tokobari Kamrup Assam-781009-
(Consigner).
(iii) AS. Trading & Company (GSTIN:
07ARQPM3852R1ZT), Khasra No. 96/2,
Ground Floor, Gali No. 8/1, Wazirabad Village
Delhi-110084-[Consignee).
(iv) New India Logistics (Trans ID.:
18AJCPM3079L1ZT), H/No.-78, Tokobari,
Kamrup, Guwahati-781009-[Transportor)
6. Reasons for Seizure : Violation of Section 7, 11, 46 & 47 of the Customs Act,
1962 read with Section 3(2) of the Foreign Trade (Development & Regulation) Act, 1992.
SM Description of Goods Origin QuantityRate/Unit Price Total Value (in
(in Rs.) Rs.)
01 DRIED ARECA NUTS Foreign Origin 350 BAGS/Bori @351/- per KG Rs.84,15,225/-
Total 23975 KG [as per MIP*]
Approx
02 TATA LPT 4223 CRE BS INDIAN 01 @22,00,000/- Rs.22,00,000
IV REG. No.: UP 83CT- (as per Current
5074 ENGINE Insurance IDV
1S859B4S230T191J6380 Value)
8977 CHASSIS NO.:
MAT541205K1J16572
Total Rs. 1,06,15,225/
MIP Rs.351/-taken as per Notfn. No. 57/2015-2020 dated 14.02.2023 of DGFT, Dept. of Commerce.
(Rupees One Crore Six Lakh Fifteen Thousand & Two Hundred Twenty Five Only)
Sd/- 22.11.23
Received a copy Inspector of Customs/Seizing Officer,
Sd/- Kishanganj Circle Office
22/11/23 (Kundan Kr)
Signature of owner with date Insp.
Witness:
1. eqLrkd 22-11-23
2. jktsUnz ;kno
22/11/2023″
Patna High Court CWJC No.17756 of 2024 dt.25-04-2025
7/16Submissions on behalf of the Petitioners
7. Learned counsel for the petitioners has contended that
the seizure memo records the country of origin of goods as
“foreign origin” but on perusal of the same, it would appear that it
nowhere says as to which foreign country the goods originated
from or on what basis the Proper Officer formed this belief.
8. Learned counsel has taken this Court through Section
110 of the Customs Act, 1962 (hereinafter referred to as the ‘Act
of 1962’) which mandates that the Proper Officer before seizing of
the goods shall be obliged to form an opinion as to “reason to
believe” that the goods are liable to confiscation. It is his
submission that the seizure memos in the present writ applications
would not conform to the mandate of Section 110(1) of the Act of
1962. It is his submission that the respondents rely upon the
‘panchnama’ to support their contention that the seizure is based
on the “reasons to believe” but this plea of the respondents has
been considered earlier by learned co-ordinate Bench of this Court
in Krishna Kali Traders and Another Vs. Union of India and
Others reported in 2024 SCC OnLine Pat 880 wherein the
learned co-ordinate Bench having examined the seizure memo
which was identical to the present case held that ‘panchnama
cannot be read into the seizure memo.’
Patna High Court CWJC No.17756 of 2024 dt.25-04-2025
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9. Learned counsel further points out that identical view
has been taken by the learned co-ordinate Bench of this Court in
the case of Assam Supari Traders, through its Authorized
Representative Cum Power of Attorney Holder Anil Kumar
Yadav Vs. Union of India through the Secretary, Ministry of
Finance, Department of Revenue and Others reported in 2024
SCC OnLine Pat 6401. The said judgment is binding in the light
of the Hon’ble Supreme Court decision in the case of Mary
Pushpam Vs. Telvi Curusumary and Others reported in (2024)
3 SCC 224.
10. Learned counsel has submitted that, in fact, this
Court has followed the views expressed by the learned co-ordinate
Bench of this Court in case of Krishna Kali (supra) and Assam
Supari Traders (supra). In this regard, learned counsel relies upon
the judgment of this Court rendered in the case of M/s Ashoke
Das and Another Vs. Union of India and Others (CWJC No.
4918 of 2021) reported in 2025 SCC OnLine Pat 1553. It is
submitted that the reasoning and rationale provided by this Court
in the case of M/s Ashoke Das (supra) would be equally
applicable in the facts of the present case.
11. While hearing these matters yesterday, when we
were informed by learned counsel for the petitioners that these writ
Patna High Court CWJC No.17756 of 2024 dt.25-04-2025
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applications would be covered by the judgment of this Court in the
case of M/s Ashoke Das (supra), we wanted a specific response to
to this by learned Additional Solicitor General. Today, learned
ASG assisted by Mr. Anshuman Singh, learned Senior Standing
Counsel for the Department of Customs has made detailed
submissions.
Submissions on behalf of the Department
12. At the outset, learned ASG does not dispute on facts
that the seizure memos as contained in Annexure ‘P/4’ in CWJC
No. 17756 of 2024 and Annexure ‘P/6’ in CWJC No. 17758 of
2024 have been drawn in identical manner as were drawn in the
case of M/s Ashoke Das (supra). The only difference which is
pointed out is that in one of the seizure memos, the Proper Officer
has shown the seized goods as that of “foreign origin” and in
another case, it has been shown as “third country origin”. So far as
the case of M/s Ashoke Das (supra) is concerned, in the said case,
the Proper Officer had shown the origin of goods as “third party”.
We have already extracted the seizure memo in CWJC No. 17756
of 2024 hereinabove. Perusal of the seizure memo would show
that the Proper Officer has not at all indicated his “reasons to
believe” for recording that the Dried Areca Nuts are of “foreign
origin” or that of “third country origin”. The reasons for seizure
Patna High Court CWJC No.17756 of 2024 dt.25-04-2025
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shown are also identically the same which were present in the
earlier seizure memos in case of M/s Ashoke Das (supra). Thus,
the facts with regard to the manner in which the seizure memo has
been drawn in these two writ applications are not in dispute.
13. At one stage, learned ASG has submitted that
‘panchnama’ should be read into the seizure memo. Learned ASG
has submitted that the circular of the Department which was issued
in the light of the judgment of the Hon’ble Delhi High Court in
case of Worldline Tradex P. Ltd Vs. Commissioner of Customs
and Others reported in (2016) 40 GSTR 141 provides that
whenever goods are being seized, in addition to ‘panchnama’, the
Proper Officer must also pass an appropriate order (seizure
memo/order etc.) clearly mentioning the “reasons to believe” that
the goods are liable for confiscation. The submission is that the
circular letter talks of preparation of ‘panchnama’ by the Proper
Officer and in addition to that, the seizure memo/order is to be
drawn mentioning the “reasons to believe”. It is for this reason that
‘panchnama’ which is prepared by the Proper Officer at the time of
seizure may be read into the seizure memo.
Consideration
14. This Court called upon learned ASG to take a plea as
to whether the ‘panchnama’ is to be prepared first or the seizure
Patna High Court CWJC No.17756 of 2024 dt.25-04-2025
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memo? In other words, whether ‘panchnama’ is the first step
towards seizure of the goods or it is the seizure which is first step
followed by preparation of ‘panchnama’. Learned ASG has, after
all deliberations submitted that there is no doubt that ‘panchnama’
is prepared after the seizure of the goods and, therefore, the seizure
is the first step preceding the preparation of ‘panchnama’.
15. In this regard, the discussion has also taken place
over the scheme of Section 110 of the Act of 1962. Sub-section (1-
B) of Section 110 of the Act of 1962 reads as under:-
“110. Seizure of goods, documents and
things.-
(1-B) Where any goods, being goods specified
under sub-section (1-A), have been seized by a
proper officer under sub-section (1), he shall
prepare an inventory of such goods containing
such details relating to their description,
quality, quantity, mark, numbers, country of
origin and other particulars as the proper
officer may consider relevant to the identity of
the goods in any proceedings under this Act
and shall make an application to a Magistrate
for the purpose of-
(a) certifying the correctness of the inventory
so prepared; or
(b) taking, in the presence of the Magistrate,
photographs of such goods, and certifying such
photographs as true; or
(c) allowing to draw representative samples of
such goods, in the presence of the Magistrate,
Patna High Court CWJC No.17756 of 2024 dt.25-04-2025
12/16and certifying the correctness of any list of
samples so drawn.”
16. Since learned ASG accepts the legal position at the
Bar that the ‘panchnama’ is prepared only after the seizure of the
goods, this Court would have no iota of doubt that proper officer
must form “reason to believe” at the time of seizing the goods and
that should reflect from the seizure memo prepared as per sub-
section (1) of Section 110 of the Act of 1962.
17. In the case of M/s Ashoke Das (supra), this Court
has discussed in detail the various case laws and the
circular/instruction which was issued by the Department after the
judgment of the Hon’ble Delhi High Court in the case of
Worldline Tradex P. Ltd (supra). This Court would reproduce
paragraph ’26’ of the judgment in M/s Ashoke Das (supra)
hereunder for a ready reference:-
“26. The learned co-ordinate Bench concluded
that panchnama cannot be read into seizure
memo. In the said case, it was also held that
both the seizure memo and panchnama would
show that it was firstly the seizure memo which
has been prepared and secondly panchnama has
been drawn, therefore, at the time of writing
seizure memo, panchnama was not written or
existed. The learned co-ordinate Bench clearly
opined that the Seizing Officer cannot keep
reasons in his mind and he has to disclose
minimal reasons in the seizure memo.”
Patna High Court CWJC No.17756 of 2024 dt.25-04-2025
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18. This Court has further noticed the learned co-
ordinate Bench’s judgments of this Court in Om Sai Trading
Company & Another Vs. Union of India & Others reported in
2019 SCC OnLine Pat 2262 which travelled up to the Hon’ble
Supreme Court in SLP(s) No. 11124 of 2021. In the case of Om
Sai Trading Company (supra) and other analogous cases which
were before the Hon’ble Supreme Court, this Court had been
pleased to quash the seizure memos. While disposing of the
SLP(s) vide September 15, 2022 order, the Hon’ble Supreme
Court observed as under:-
” 1. Leave Granted.
2. Having heard learned counsel for the parties, in
view of the facts of the present case, and as the goods
have already been released, we are not inclined to
interfere with the decision of the High Court quashing
the seizure memo. However, we clarify that the
quashing of the seizure memo does not mean the
appellants cannot investigate, and proceed in
accordance with law under the provisions of the
Customs Act, 1962. ..”
19. Having taken note of the order of the Hon’ble
Supreme Court in Om Sai Trading Company (supra) and other
analogous cases, this Court has taken a view in the case of M/s
Ashoke Das (supra) in paragraph ’41’ which is as under:-
Patna High Court CWJC No.17756 of 2024 dt.25-04-2025
14/16“41. It is apparent from a bare reading of the
order of the Hon’ble Supreme Court that it was
passed after granting leave against the Division
Bench judgments of this Court and the effect of
the order of the Hon’ble Supreme Court may be
clearly seen. The principle of ‘merger’ will apply.
Despite quashing of the seizure memo, it cannot
be said that the appellants cannot investigate and
proceed in accordance with law under the
provisions of the Act of 1962.”
20. The crux of the entire discussions on the case laws
and the instruction of the Department may be found in paragraphs
’42’ and ’43’ of the judgment of this Court in M/s Ashoke Das
(supra) which read thus:-
“42. In the light of the aforementioned
discussions, when we examine the seizure
memo (Annexure P1), it is found that the
Seizing Officer has not complied with the
mandate of sub-section (1) of Section 110 of
the Act of 1962. The Hon’ble Delhi High
Court has, in Worldline Tradex Private
Limited (supra) categorically held that the
power of seizure under Section 110 of the Act
has to obviously be exercised for valid
reasons. The proper officer has to record his
reasons to believe that the goods that he
proposes to seize are liable to confiscation.
The said reasons for exercise of the power
have to be recorded prior to the seizure. The
subsequent instruction issued by the
Department clearly says that in addition to
panchnama reason to believe should be
indicated in the seizure memo/order.
43. We find from the records that in the
present case, apart from the seizure list, there
is no other order of the Seizing Officer
showing his reason to believe. The learned
Patna High Court CWJC No.17756 of 2024 dt.25-04-2025
15/16co-ordinate Bench of this Court in the case of
Assam Supari Traders (supra) and Krishna
Kali Traders (supra) has held that mere
mentioning of the sections of the Act of 1962
in the seizure memo would not be sufficient
in absence of material information relating to
‘reason to believe.’ We are in agreement with
the said view of the learned co-ordinate
Bench. We have been told at the Bar that
Assam Supari Traders (supra) and Krishna
Kali Traders (supra) have attained finality as
no challenge to these judgments have been
taken to the Hon’ble Supreme Court.”
21. Since on facts, there is no dispute that the seizure
memos in these two writ applications have been drawn in identical
manner in which the earlier seizure memos were drawn by the
Department which stood quashed, this Court is of the considered
opinion that the legal position as enunciated in the judgment of
this Court in M/s Ashoke Das (supra) would govern the present
case as well.
22. In result, the seizure memos (Annexure ‘P/4’ in
CWJC No. 17756 of 2024 and Annexure ‘P/6’ in CWJC No.
17758 of 2024) are quashed.
23. This Court has been informed that notice to show
cause has been served upon the petitioner. In view of the
observations of the Hon’ble Supreme Court which we have
noticed hereinabove, we refrain from taking any view on the issue
of issuance of the show cause notice. The Hon’ble Supreme Court
Patna High Court CWJC No.17756 of 2024 dt.25-04-2025
16/16
has observed in its order that quashing of the seizure memo does
not mean the appellants cannot investigate and proceed in
accordance with law under the provisions of the Act of 1962.
24. In the aforesaid view of the matter, the petitioners, if
so advised, may submit their replies to the show cause notice
whereafter the Adjudicating Officer shall proceed to pass
appropriate order under the provisions of the Act of 1962. All
questions with regard to issuance of the show cause notice and
impact of quashing of seizure memos shall remain open.
25. These writ applications stand allowed to the extent
indicated hereinabove.
(Rajeev Ranjan Prasad, J)
(Ashok Kumar Pandey, J)
lekhi/-
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