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2024 (3) TMI 605 - HC - CustomsSmuggling - Gold - provisional attachment of bank accounts of petitioner - proper officer has not passed any order in writing which fulfils the requirements of Section 110(5) of Customs Act, before provisional attachment - It is the Petitioner’s case that, on making oral enquiries with the bank, the Petitioner was informed that the account had been frozen pursuant to customs investigation against the Petitioner - jurisdiction of Court to entertain these Petitions - HELD THAT:- On a bare perusal of the provisions of Section 110(5) of the Act, it can be seen that a bank account can be provisionally attached if the proper officer forms an opinion that, for the purpose of protecting the interest of revenue or preventing smuggling, it is necessary so to do. Further, an order directing provisional attachment of the bank account has to be in writing - The proper officer must form an opinion that it is necessary to provisionally attach the bank account for the aforesaid reasons and not only expedient to do so. Moreover, the necessity has to be for the purpose of protecting the interest of revenue or preventing smuggling and not for any other purpose. While conditioning the exercise of power on the formation of an opinion of the Principal Commissioner / Commissioner that, “for the purpose of protecting the interest of revenue or preventing smuggling it is necessary so to do”, it is evident that the statute has not left formation of the opinion to an unguided subjective discretion of the proper officer or for that matter the Principal Commissioner / Commissioner. The formation of the opinion must bear a proximate and live nexus to the purpose of protecting the interest of government revenue and / or preventing smuggling. Further, considering the drastic nature of this power, such an order in writing directing provisional attachment should be served not only on the bank but also on the bank account holder, as, in the absence of such an order in writing being served on the bank account holder, it will be at a great disadvantage if he deems fit to challenge such a provisional attachment. The law is well settled by the judgment of the Division Bench of this Court in the case of Boxster Impex Pvt. Ltd. vs. Union of India [2020 (10) TMI 50 - BOMBAY HIGH COURT]. This judgment was delivered in respect of the provisions of Section 110(5) of the Act held that Learned counsel for the respondents could not show any other provision in the Customs Act which empowers or authorizes the customs department to freeze the bank account of a person other than sub-section (5) of Section 110. Such attachment of bank account of the petitioner on 1st March, 2019 and its continuation thereafter being in breach of Section 110(5) is therefore, without any authority of law. In the present case, before provisionally attaching the bank accounts of Petitioners, the proper officer has not passed any order in writing which fulfils the requirements of Section 110(5) of the Act. No such order in writing has been placed on record before us by the Respondents. In fact, in paragraph 11 of its Affidavit in Reply, Respondent No. 3, quite surprisingly, contended that, as per the provisions of Section 110(5) of the Act, no written order for provisional attachment of a bank account is required to be passed - such an order in writing ought to have been served on the Petitioner / bank account holder. In the present case, no order in writing records the opinion of the proper officer, namely that, for the purpose of protecting the interests of revenue or preventing smuggling, it had become necessary to provisionally attach the bank accounts of the Petitioners. In our view, there is a total non-compliance of the provisions of Section 110(5) of the Act while provisionally attaching the bank accounts of the Petitioners. For this reason, the provisional attachment on all the bank accounts of the Petitioners will have to be declared as illegal and lifting the impugned provisional attachment and defreezing of the bank accounts of the Petitioners will have to be directed. Jurisdiction of the Court to entertain the petition - HELD THAT:- As a part of the cause of action clearly arises within the territorial jurisdiction of this Court, this Court would have jurisdiction to entertain these Petitions so as to issue a writ under the powers conferred under Article 226 of the Constitution. It is declared that the provisional attachment of the bank accounts of the Petitioners is illegal and contrary to the provisions of Section 110(5) of the Act - The said provisional attachment of the bank accounts of the Petitioners is hereby set aside and the Respondent banks are directed to permit the Petitioners to operate their respective bank accounts without any hindrance - Petition allowed.
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