HC Quashes Confiscation of Personal Gold Jewellery; Holds Customs Acted In Blatant Violation of Due Process

HC Quashes Confiscation of Personal Gold Jewellery; Holds Customs Acted In Blatant Violation of Due Process

The petitioner, a Mauritian national and businessman, arrived at Mumbai Airport on 16 May 2014 wearing personal gold jewellery comprising a kada, chains and a small coin. The jewellery, weighing approximately 374 grams, was worn on his person and, according to the petitioner, had significant personal and sentimental value. Upon arrival, Customs officers intercepted him and asked him to remove the jewellery, assuring that it would be returned at the time of his departure two days later. Instead, the jewellery was detained under a detention memo, and no seizure memo or under Section 124 of the Customs Act was issued.

Thereafter, an Order-in-Original and show-cause notice was passed confiscating the jewellery and imposing redemption fine and penalties, which were partly reduced in appeal. During the pendency of revision proceedings before the Central Government, the Customs Department, without any notice to the petitioner, sent the jewellery to the Government Mint in 2019 where it was melted and later auctioned. The revisional authority permitted re-export of the jewellery, but by then the gold no longer existed in its original form.

The petitioner approached the High Court challenging the confiscation, penalties and the illegal disposal of his property.

Issue Raised: Whether the confiscation and subsequent disposal of the petitioner’s personal gold jewellery without issuance of a show-cause notice under Section 124, and during the pendency of appellate and revisional proceedings, was lawful and sustainable under the Customs Act and the Constitution.

HC’s Ruling: The Hon’ble High Court held that the actions of the Customs authorities were wholly illegal, arbitrary and in flagrant breach of statutory safeguards. The Court found that neither the provisions governing seizure under Section 110 nor those relating to confiscation under Section 111 had been complied with, and that no mandatory show-cause notice under Section 124 was ever issued. It was further held that once six months elapsed from the date of detention without issuance of notice, the authorities were statutorily bound to return the jewellery to the petitioner.

The Court held that the State was under a legal obligation to preserve the seized property as a bailee until the proceedings attained finality.  Relying on constitutional protections under Articles 14 and 300A, the Court concluded that the disposal of the petitioner’s gold was per se illegal and void. The respondents were directed to restore the petitioner to the position he would have occupied but for the illegal acts, by refunding the value of the gold.

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