2024 (11) TMI 1478 - HC - Customs

Maintainability of petition - Correctness in provisionally attaching the two fixed deposits of the petitioner which already been confiscated by the Respondent No.4 under Section 121 of the Customs Act 1962 - violation of the fundamental right guaranteed under Article 20(2) - HELD THAT - In the case at hand Ext.P6 is the previous proceeding a careful reading of which reveals that after ordering confiscation of the sale proceeds of the gold purchased by the petitioner an option to redeem the sale-proceeds on payment of redemption fine of Rs.10 lakhs was granted under Section 125 of the Customs Act. It is pertinent to note that Section 121 is included in Chapter XIV of the Customs Act dealing with confiscation of goods and conveyances and imposition of penalties whereas offences and prosecutions under the Act falls under Chapter XVI. It is thus evident that the proceedings under the Customs Act does not amount to prosecution and Ext.P6 does not constitute punishment. In that view of the matter proceedings under the PML Act does not amount to double jeopardy. Being so no case warranting this Court s interference under Article 226 in spite of efficacious remedies available under the PML Act is made out. The challenge against issuance of show cause notice by the Technical Member and contention regarding non-compliance of the requirements in Section 5 of the PML Act are to be agitated before the authorities under the PML Act. Consequently the writ petition is dismissed as not maintainable.

Summary

ISSUES:

Whether the provisional attachment of fixed deposits under Section 5(1) of the Prevention of Money Laundering Act, 2002 (PML Act) is without jurisdiction and illegal when the same amount has already been confiscated under Section 121 of the Customs Act, 1962.Whether the Customs Act being a special enactment prevails over the PML Act, a general enactment, in respect of confiscation and attachment of proceeds of crime.Whether the issuance of the show cause notice by the Technical Member instead of the Judicial Member of the Adjudicating Authority under the PML Act affects the validity of the proceedings.Whether the attachment and adjudication proceedings under the PML Act amount to double jeopardy under Article 20(2) of the Constitution.Whether the writ petition is maintainable at the stage before adjudication and appellate remedies under the PML Act are exhausted.

RULINGS / HOLDINGS:

The provisional attachment order under Section 5(1) of the PML Act is not without jurisdiction or illegal merely because the same amount was confiscated under Section 121 of the Customs Act; the two proceedings deal with different aspects and are independent.The Customs Act being a special enactment does not prevail over the PML Act where the latter contains a non obstante clause, and the PML Act being later in time, its provisions prevail over conflicting provisions of the Customs Act.The issuance of the show cause notice by the Technical Member is valid and does not vitiate the proceedings, supported by precedents from the High Courts of Delhi and Madras.The proceedings under the PML Act do not amount to double jeopardy as the confiscation under the Customs Act is not a prosecution or punishment by a court or judicial tribunal; therefore, Article 20(2) is not attracted.The writ petition is premature and not maintainable since efficacious remedies are available under the PML Act before the Adjudicating Authority and appellate forums; challenges to procedural and jurisdictional issues must be raised therein.

RATIONALE:

The Court applied the legal framework of the Prevention of Money Laundering Act, 2002, and the Customs Act, 1962, interpreting the relationship between a special enactment and a general enactment with reference to the maxim "generalibus specialia derogant" and the effect of a non obstante clause in the PML Act.The Court relied on the Supreme Court's exposition of double jeopardy under Article 20(2), emphasizing the necessity of a prior valid prosecution and punishment by a court or judicial tribunal for the same offence and facts, which was absent in the confiscation proceedings under the Customs Act.The Court noted the distinction between confiscation orders under Chapter XIV of the Customs Act and prosecution under Chapter XVI, holding that confiscation does not amount to punishment or prosecution for double jeopardy purposes.Precedents from the High Courts of Delhi and Madras were relied upon to uphold the validity of procedural steps taken by the Technical Member of the Adjudicating Authority under the PML Act.The Court emphasized that challenges to the attachment and adjudication under the PML Act must be pursued through the statutory remedies provided under that Act, rather than through premature writ petitions.