TMI Blog2020 (10) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... issued on 1st March, 2019 for freezing of the bank account of the petitioner. This was prior to insertion of sub-section (5) in Section 110 with effect from 1st August, 2019. Therefore, it is quite clear that this provision could not have been invoked for freezing the bank account of the petitioner - 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. Refund of GST/IGST - HELD THAT:- The alert has been placed on the IEC of the petitioner on the basis of materials which are presently under investigation of the customs department. For the said reason, refund of IGST/GST dues has also been held up. However, we feel that the investigation needs to be expedited and taken to its logical conclusion one way or the other because extreme measures such as placing of alert on IEC and withholding of IGST/GST dues can not be continued for an ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for identical reliefs; its account number being 172011100002306 with Andhra Bank, Lokhandwala Branch and 811230139267 with DBS Bank, Andheri Branch. 5. In Writ Petition (St.) No.5666 of 2020 petitioner is Elantra Exports Private Limited, a private limited company having its registered office at New Link Road, Andheri (W), Mumbai. In this petition under Article 226 of the Constitution of India the reliefs sought for are identical save and except, the bank account numbers which are as under :- Account No.03800200001461 of Bank of Baroda, S.V.Branch and 916020048013860 of Axis Bank, Airoli Branch. 6. In the course of hearing, learned counsel for the parties advanced their arguments treating Writ Petition No.5670 of 2020 as the lead case as pleadings have been exchanged in this case. Therefore, all references to facts and pleadings will be in respect of Writ Petition (St.) No.5670 of 2020. 7. According to the petitioner he is engaged in the business of imports and exports and is duly registered with the Directorate General of Foreign Trade having Importer and Exporter Code (IEC) No.AAGCD7568P. 8. Petitioner has stated that it buys handicraft items from various sellers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for claiming ineligible IGST refund and other government benefits. On examination of export consignments of M/s Ronera Overseas Private Limited it was found that the goods contained therein were ordinary glass bangles, many of which were already in broken state and not fit for market sale. During the same period on examination of import consignments drawn at M/s Ashte Ligistics Private Limited belonging to M/s Alan Impex and M/s Serco Import and Export Private Limited, it was observed that the goods appeared to be plain glass bangles out of which many were in broken state. Some were wrapped in Hindi newspapers of Firozabad. On that basis an inference was drawn that there was circular trading of glass bangles to avail ineligible government benefits in the form of IGST etc. 15. Following the above, a search was conducted in the premises of Mr.Uzair Basar, a resident of Tardeo, Mumbai, on 25th February, 2019 wherein 129 stamps of various companies were found including M/s Dunox Trading and Export Private Limited i.e., petitioner in Writ Petition (St.) No.5670 of 2020, M/s Ronera Overseas Private Limited, M/s Boxster Impex Private Limited i.e., petitioner in Writ Petition (St.) No.5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to loot government revenue. 22. Petitioner has filed rejoinder affidavit. In the rejoinder affidavit all the above allegations have been denied and averments made in the writ petition have been reiterated. It is stated that petitioner is carrying on the business activity of exports of handcrafts being manufactured in various parts of India which has a huge demand in the foreign market. After identifying overseas purchases of handicraft items, petitioner procured the goods from various manufacturers / traders under proper GST paid invoices. Payments were made through banking channels which have been duly accounted for in the books of account maintained by the petitioner. All the previous exports of the petitioner were allowed clearance by following the due process. Merely on obtaining one rubber stamp from the premises of Mr.Uzair Basar cannot lead to any adverse inference that the petitioner is engaged in circular trading. Allegations against the petitioner are based on presumptions and assumptions. Petitioner has cooperated in the investigation. Regarding freezing of bank account, reference has been made to sub-section (5) of Section 110 of the Customs Act and it is submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Trading and Export Private Limited. Reference was made to the current account of the petitioner in the said bank. While the Branch Manager was called upon to provide certain details of the bank account he was also requested not to allow any withdrawal from the said account and operation of locker without prior permission. This is the only document on record on the basis of which the bank account of the petitioner has been effectively frozen. In the affidavit in reply filed on behalf of respondent No.1 the only statement made in respect of freezing of the bank account is in paragraph 26 wherein it is stated that unfreezing the frozen bank account would cause huge loss to the department. 28. Section 110 deals with seizure of goods, documents and things. Sub-section (5) was inserted in Section 110 by the Finance (No.2) Act, 2019 with effect from 1st August, 2019. Sub-section (5) of Section 110 reads as under :- Where the proper officer, during any proceedings under the Act, is of the opinion that for the purposes of protecting the interest of revenue or preventing smuggling, it is necessary so to do, he may, with the approval of the Principal Commissioner of Customs or Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proviso the Principal Commissioner of Customs or Commissioner of Customs can extend such provisional attachment for a further period not exceeding six months; but he must record reasons for such extension and such extension of period has to be informed to the person whose bank account is provisionally attached before expiry of the period so specified. 33. Thus from a careful reading of sub-section (5) of Section 110 it is noticeable that several pre-conditions and procedures are mandated. It may not be necessary for an elaborate deliberation of the same in view of the fact that respondents in their affidavit have not placed on record any order passed by the Principal Commissioner of Customs or Commissioner of Customs under sub-section (5) of Section 110. Suffice it to say that an order in writing for provisional attachment of a bank account is a must before such an account can be attached. In the absence of such an order in writing respondents could not have provisionally attached the bank account of the petitioner and continued with such attachment even beyond the permissible extended period. 34. Learned counsel for the respondents could not show any other provision in the C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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