Calcutta High Court
Principal Commissioner Of Customs … vs Shri Litan Karmakar on 9 April, 2026
Author: Rajarshi Bharadwaj
Bench: Rajarshi Bharadwaj
IN THE HIGH COURT AT CALCUTTA
SPECIAL JURISDICTION [CUSTOMS]
ORIGINAL SIDE
CUSTA 12 OF 2026
IA NO: GA 1 OF 2026
PRINCIPAL COMMISSIONER OF CUSTOMS PREVENTIVE
VS
SHRI LITAN KARMAKAR
PROPRIETOR OF MS LITAN KARMAKAMAR
BEFORE:
THE HON'BLE JUSTICE RAJARSHI BHARADWAJ
AND
THE HON'BLE JUSTICE UDAY KUMAR
For the Appellant : Mr. Kaushik Dey, Ld. Adv.
Mr. K.K. Maiti, Ld. Adv.
For the Respondent : Mr. Nilotpal Chowdhury, Ld. Adv.
Mr. Prabir Bera, Ld. Adv.
Hearing concluded on : 02.04.2026
Judgment on : 09.04.2026
Uday Kumar, J:-
ADMISSION AND SCOPE OF APPEAL
1. This appeal appears before us for admission. It has been
preferred by the Appellant-Revenue, against the Miscellaneous
Order dated July 4, 2025, passed by the Learned Customs, Central
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Excise & Service Tax Appellate Tribunal (CESTAT), East Zonal
Bench, Kolkata.
2. The Learned Counsel for the Appellant submitted that the
Tribunal, while dealing with a Stay Application involving the seizure
of 2755.200 grams of foreign-origin gold, rejected the same without
assigning any independent reasons. It is contended that the
Tribunal failed to consider the statutory presumption under Section
123 of the Customs Act, 1962, and ignored the Department's
findings regarding fabricated documents.
3. Upon hearing the Learned Counsel for the Appellant at length
and perusing the Memorandum of Appeal, we found that the matter
raised a substantial question of law concerning the adjudicatory
obligations (necessity of a "speaking order") of a quasi-judicial
body.
4. Accordingly, the appeal was admitted on the following
question:
"Whether the Learned Tribunal was legally justified in
dismissing a stay application involving significant
revenue and serious allegations of smuggling through a
summary, non-speaking order, without providing
independent reasoning or addressing the statutory
mandate of Section 123 of the Customs Act, 1962?"
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5. With the consent of the appearing parties, the appeal is taken
up for final disposal.
THE FACTUAL MATRIX AND CONTROVERSY
6. The dispute originates from a search conducted on March 28,
2019, by the Customs (Preventive) unit at the Respondent's
business premises, resulting in the recovery of three gold bars
weighing 2755.200 grams. These bars, valued at approximately Rs.
89,87,462/-, were prominently embossed with foreign markings
(SUISSE, PAMP).
7. Acting on a reasonable belief that the bullion had been
smuggled into India via unauthorized routes, the officers effected a
seizure under Section 110 of the Act. The subsequent investigative
trajectory revealed a series of shifting defenses adopted by the
Respondent. Initially, it was asserted that the gold had been
acquired from M/s Swansukha Jewellers Pvt. Ltd.--a claim
categorically refuted by the purported seller. Thereafter, the
Respondent introduced an alternative theory of a "gold exchange"
with his brother, Shri Shyamlal Karmakar; however, this transaction
had found no reflection in the statutory Ledger Accounts for the
financial year 2018-19.
8. While the Adjudicating Authority originally ordered absolute
confiscation due to the Respondent's failure to discharge the burden
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of proof, the Commissioner (Appeals) reversed this finding on
November 8, 2024. The Revenue's subsequent motion for a stay
before the Tribunal resulted in the summary rejection now under
challenge.
SUBMISSIONS OF THE PARTIES
9. Mr. Kaushik Dey, Learned Counsel for the Appellant-Revenue
primarily relied on the mandatory presumption enshrined in Section
123 of the Act. He submitted that for "notified goods," such as
foreign-marked gold, the burden of proving licit importation lies
squarely upon the possessor. He argued that any breach of import
conditions constitutes a "prohibition" under the ratio of Sheikh
Mohd. Omer Vs. Collector of Customs [1983 (13) ELT 1439 (SC)],
rendering the goods liable for confiscation. The Revenue further
characterized the Tribunal's summary rejection as a patent
jurisdictional error.
10. Mr. Nilotpal Chowdhury, Learned Counsel for the Respondent,
while denying the smuggling charges and asserting that the gold
had been acquired through domestic channels, emphasized the
financial hardship caused by the prolonged seizure. However, in
light of the procedural infirmities highlighted during the hearing, the
Learned Counsel consented to a remand for a fresh hearing on the
merits.
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ANALYSIS AND FINDINGS
11. We have scrutinized the impugned order dated July 4, 2025,
specifically Paragraph 2, which reads:
"Prima facie, we find that the impugned order... is not
ex facie, illegal or without jurisdiction. Consequently,
the stay petitions filed by the Revenue are rejected,
being devoid of merit."
12. We find force in the Appellant's contention that this is a "non-
speaking order." It is a fundamental tenet of administrative law that
reasons are the "live links" between the mind of the adjudicator and
the controversy at hand; an order devoid of such reasoning is a
"shell without a kernel." The Tribunal's conclusion that the lower
order is "not ex facie illegal" lacks the necessary premise to sustain
it. It fails to engage with the Revenue's evidence regarding the
refuted procurement documents or the statutory reversal of the
burden of proof under Section 123. In matters involving foreign-
origin bullion, this presumption is a pivotal legal factor, and the
Tribunal's failure to address it indicates a non-application of mind.
Such a cryptic approach is not a judgment but a mere fiat,
depriving this Court of the opportunity to understand the rationale
behind the refusal of a stay in a high-stakes revenue matter.
ORDER
13. In view of the foregoing observations, the following order is
passed:
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a) The impugned order dated July 4, 2025, passed by the
Learned CESTAT, Kolkata, is hereby set aside.
b) The matter is remanded to the Learned Tribunal for a
fresh, de novo consideration of the Stay Application and
the main appeal on their respective merits.
c) The Tribunal is directed to pass a reasoned and
speaking order after affording both parties a fair
opportunity of being heard, within six weeks from the
date of communication of this judgment.
d) Interim Protection: Pending the fresh decision by the
Tribunal, the operation of the Order-in-Appeal No.
KOL/CUS(CCP)/KS/628-630/2024 dated November 8,
2024, shall remain stayed, and the seized gold shall
remain in the custody of the Department.
14. CUSTA 12 of 2026 is accordingly disposed of.
15. GA 1 of 2026 is also disposed of accordingly.
16. Urgent photostat certified copy of this order, if applied for, be
supplied to the parties upon compliance with all requisite
formalities.
I AGREE
(RAJARSHI BHARADWAJ, J.) (UDAY KUMAR, J.)
