Bombay High Court
Naryan Power Solutions vs Union Of India on 25 July, 2023
Bench: G. S. Kulkarni, Jitendra Shantilal Jain
2023:BHC-OS:7193-DB
904-wpl 19691-23.odt
Prajakta Vartak
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION (L.) NO. 19691 OF 2023
M/s. Narayan Power Solutions ..Petitioner
Vs.
Union of India & Anr. ..Respondents
__________
Dr. Sujay Kantawala, Mr. Anupam Dighe, Ms. Chandni Tanna and Mr.
Prathamesh Chavan i/b. India Law Alliance for Petitioner.
Mr. Vijay Kantharia with Mr. Ram Ochani for Respondents.
__________
CORAM : G. S. KULKARNI &
JITENDRA JAIN, JJ.
DATE : JULY 25, 2023
Oral Judgment: (Per G. S. Kulkarni, J)
1. We have heard Dr. Kantawala, learned counsel for the petitioner
and Mr. Kantharia, learned counsel for the respondent-Revenue on the
present proceedings.
2. The urgent relief, which is sought by the petitioner, is in terms of
the prayer clause (c)(a) i.e. to unseal the petitioner's office premises located
at Plot No. W-255(A), TTC Industrial Area, Rabale MIDC, Navi Mumbai
- 400 701. Dr. Kantawala would submit that respondent no.2-Assistant
Commissioner of Customs would not have authority and jurisdiction to
seal the office premises of the petitioner in exercising powers under
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Section 105 of the Customs Act, 1962 and that too, without any notice to
the petitioner.
3. It is submitted by Dr. Kantawala that the respondents purport to
undertake investigation in regard to the transactions in respect of goods
which were sold by one S. T. Electricals who is the principal
importer/supplier. It is also his submission that S. T. Electricals in regard
to the actions being taken against it by the Customs Authorities, has
moved the proceedings (D.B. Civil Writ Petition No. 10480/2023) before
the High Court of Judicature for Rajasthan, Bench at Jaipur and the said
proceedings are placed for hearing before the first Bench of the Court
tomorrow i.e. 26 July, 2023.
4. Dr. Kantawala would also submit that the petitioner was always
ready and willing to co-operate in any investigation which the respondents
intend to undertake in regard to any transactions concerning S. T.
Electricals. He submits that in so far as the petitioner is concerned, the
petitioner has not directly purchased goods from S. T. Electricals. Dr.
Kantawala would also submit that the petitioner would not have any
grievance if the concerned officers of the respondents take search of the
office premises and confine their search, to the documents, in regard to the
trail of transactions of the goods, which S.T. Electricals has sold. It is his
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submission that S. T. Electricals has supplied the goods to Pacific who sold
the goods to M/s. Mayur Enterprises from whom the petitioner had
purchased the goods. It is hence his submission that the respondents need
to confine their search in regard to investigation in question, only to such
transactions and not in regard to several transactions which have taken
place between the petitioner and other suppliers/sellers and/or buyers. In
short, Dr. Kantawala would submit that it cannot be a fishing search, it has
to be a specific search.
5. Mr. Kantharia is not in a position to justify that the powers under
Section 105 of the Customs Act, 1962 can be utilized to seal the office
premises. He would, however, submit that the Customs Officers would
have an authority to search the premises and as the petitioner was not co-
operating, the premises came to be sealed.
6. Having heard learned counsel for the parties and having perused
the record, we are of the opinion that the power to search cannot mean a
power to seal. A power to seal the premises is a drastic power. In our
opinion, such powers cannot be exercised unless the same is expressly
conferred by law. Also the respondents have not supported their
contention of such power being vested with the Customs Officers citing
any authority on such proposition.
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7. As to how Section 105 of the Customs Act has been considered and
interpreted by the Supreme Court in upholding its validity can be seen
from the observations of the Supreme Court in R. S. Seth Gopikisan
Agarwal Vs. R. N. Sen, Assistant Collector of Customs and Central Excise,
Raipur & Ors.1. The Supreme Court interpreting Section 105 of the
Customs Act, observed that the object of the section is to make search for
the goods liable to be confiscated or the documents secreted in any place
which are relevant to any proceeding under the Act. It was observed that
the legislative policy reflected in the section is that the search must be in
regard to the two categories mentioned therein, namely, goods liable to be
confiscated and documents relevant to the proceedings under the Act.
The observations of the Supreme Court in such context are required to be
noted which read thus:-
"10. Then it is contended that S. 105 of the Act confers an
unguided and arbitrary power on the Assistant Collector of
Customs to make a search, the only condition being that he has
reason to believe in the existence of the facts mentioned therein. It
is said that the said belief is practically a subjective satisfaction and
the section neither lays down any policy nor imposes any effective
control on his absolute discretion. So stated the argument is
attractive, but a deeper scrutiny of the provisions indicates not
only a policy but also effective checks on the exercise of the power
to search by the Assistant Collector of Customs. The object of the
section is this make a search for the goods liable to be confiscated
or the documents secreted in any place. which are relevant to any
proceeding under the Act. The legislative policy reflected in the
section is that the search must be in regard to the two categories
mentioned therein, namely, goods liable to be confiscated and
1 AIR 1967 Supreme Court 1298
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documents relevant to a proceeding under the Act. No doubt the
power can be abused. But that is controlled by other means.
Though under the section the Assistant Collector of Customs need
not give the reasons, if the existence of belief is questioned in any
collateral proceedings, he has to produce relevant evidence to
sustain his belief. That apart, under S. 165(5) of the Code of
Criminal Procedure, read with S. 105(2) of the Act, he has to send
forthwith to the Collector of Customs a copy of any record made
by him. The Collector would certainly give necessary directions if
the Assistant Collector went wrong, or if his act was guided by
mala fides. But the more effective control on him is found in S.
136(2) of the Act. It reads :
If any officer of customs....
(a) requires any person to be searched for goods liable to
confiscation or any document relating thereto, without having
reason to believe that he has such goods or documents secreted
about this person; or
(b) arrests any person without having reason to believe that he has
been guilty of an offence punishable under Section 135; or
(c) searches or authorises any other officer of customs to search any
place without having reason to believe that any goods, documents
or things of the nature referred to in Section 105 are secreted in
that place, he shall be punishable with imprisonment for a term
which may extend to six months, or with fine which may extend to
one thousand rupees, or with both.
No doubt he can be prosecuted only with the previous sanction of
the Central Government, but his liability to original prosecution
for dereliction of duty under S. 105 of the Act is certainly an
effective control on his arbitrary acts. It is, therefore, clear that not
only a policy is laid down in S. 105, but also that the acts of the
Assistant Collector are effectively controlled in the manner stated
above. We cannot, therefore, say that s. 105 offends Art. 14 of the
Constitution."
8. We are thus of the opinion that the customs authorities would not
have an explicit power under Section 105 of the Customs Act to seal the
premises. This also for the reason that sealing of premises, is a drastic
action. It results in tinkering with substantive rights of a person to hold,
use and occupy any immovable property. The property may be used for
the business purposes or otherwise, hence, any action to seal the premises
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would have a direct bearing and effect on legal rights of the person to use
and occupy the premises as guaranteed by Article 300A of the
Constitution. The action of sealing would amount to suspension or taking
away of such legal right, which cannot be resorted unless the procedure in
law is adopted namely in a given case an opportunity of a hearing being
granted unless the law otherwise would so prescribe. Once the sealing of
the premises is of business premises, it would adversely affect the right to
carry on business which is a fundamental right as guaranteed under
Section 19(1)(g) of the Constitution. In our opinion, it is for such reasons
in providing for powers under Section 105 of the Customs Act of search,
the legislature has kept out and/or has not included within its purview a
power to seal, and has confined the power only to search the premises.
9. In so far as the facts of the case are concerned, it does not appear
that the premises of the petitioner were not available for the purpose of
search and it appears that the customs authorities had straightaway
resorted to take a drastic action against the petitioner to seal the premises
for the purpose of searching the premises. This is certainly not permissible
under the provisions of Section 105 of the Customs Act.
10. Be that as it may, in the present case, the petitioner has shown
willingness to co-operate in the search action to be undertaken by the
customs authorities. We are thus of the opinion that the customs
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authorities need to unseal the office premises of the petitioner in the
presence of the representatives of the petitioner, so that the customs
authorities can undertake search of the office premises in regard to the
relevant material only and as noted by us above.
11. We accordingly direct that the customs officers as also the
representatives of the petitioner to remain present at the premises of the
petitioner tomorrow i.e. 26 July, 2023 at 10.30 a.m. and in the presence of
the parties, the premises be unsealed and search operation be undertaken,
to which the petitioner shall co-operate in all respects.
12. In the above circumstances, keeping open all contentions of the
parties on the search proceedings or on any further action which the law
may permit the respondents to adopt, we dispose of the present
proceedings in terms of our above observations. No costs.
[JITENDRA JAIN, J.] [G. S. KULKARNI, J.]
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