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TMI Blog2021 (1) TMI 871X X X X Extracts X X X X X X X X Extracts X X X X ..... ce, Kolkata Zonal Unit (respondent No.2) to the General Manager, Kotak Mahindra Bank Limited, Malad (East), Mumbai (respondent No.3) requesting debit-freeze of one account of the petitioners. 3. A perusal of the letter dated 08.05.2019 would go to show that there was an ongoing investigation undertaken by the Directorate of Revenue Intelligence in respect of import of precious and semi-precious stones from Kolkata. In the course of the investigation, it was found that petitioners had opened an account in the bank of respondent No.3 bearing Account No.2812920972. Respondent No.3 was requested to keep the said account under debit-freeze mentioning that the letter was issued in terms of section 110 of the Customs Act, 1962. 3.1. Following th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Revenue Intelligence and did not co-operate with the investigation. In so far provisional attachment of the bank account is concerned, while admitting that under section 110(5) of the Customs Act, 1962, provisional attachment can be for a period of only 12 months it is however stated that petitioners have neither approached the Directorate of Revenue Intelligence to prove the bona fides of their imports nor have they joined the Directorate of Revenue Intelligence in the investigation. Due to non-cooperation of the petitioners, investigation has not reached its finality. 5. Petitioners have filed rejoinder affidavit denying the allegations made by the respondents in their reply affidavit and reiterating what has been contended in the wri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... money which have accrued out of such unlawful activities which is required to be frozen except generally stating that "whatever amount (balance) is lying in the concerned bank accounts, the same have been seized by this office, in terms of section 110 of Customs Act, 1962 read with section 121 of Customs Act, 1962, as there are reasons on record to indicate that the companies have engaged in the act of smuggling.". 10. But the moot question raised in the writ petition is whether a provisional attachment of bank account can be continued beyond the period of one year? 11. Section 110 of the Customs Act deals with seizure of goods, documents and things. Sub-section (5) was inserted in the said provision by Finance (No.2) Act, 2019 with effec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is also laid down for giving effect to the said provision. Being a coercive provision, there has to be strict compliance to the procedure laid down. In such circumstances and having regard to its very nature, such a provision can only have prospective operation and not retrospective operation. Infact, the concerned Finance Act makes it explicit by making the provision effective from a prospective date i.e. from 1st August, 2019. 30. Letter from the office of the Principal Commissioner of Customs to the Branch Manager of IDFC Bank was 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir 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 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 attachm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We may mention that in the reply affidavit of the respondents, it has neither been pleaded nor any document has been annexed thereto to show that any order was passed by the Principal Commissioner of Customs or Commissioner of Customs firstly for provisional attachment of bank accounts of the petitioners and secondly for extending the initial period of six months to a further period not extending six months. The initial period of six months had expired in November, 2019. Even assuming and giving benefit of further six months to the respondents, the outer limit of one year expired in May, 2020. That apart, Finance (No.2) Act, 2019 was given prospective application with effect from 01.08.2019. The provisional attachment was made on 08.05.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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