Kuldeep Kaur vs Uoi & Ors.
2011 Latest Caselaw 2280 Del

$~8.
*    IN THE HIGH COURT OF DELHI AT NEW DELHI

+      WRIT PETITION(CIVIL) NO. 11035/2009

                                 Judgment delivered on : 28th April, 2011

       KULDEEP KAUR                              ..... Petitioner
                     Through Ms. Kanchan Kaur Dhodi,
                     Advocate.
                Versus
       UOI & ORS.                            ..... Respondent
                     Through Mr. Mukesh Anand, Mr. R.C.S.
                     Bhadoria, Mr. Shailesh Tiwari & Mr.
                     Jayendra, Advocates for respondent
                     Nos. 2 to 4.
                     Mr. Vipin Singhania & Mr. P.K. Jha,
                     Advocates for respondent No. 6.
       CORAM:
       HON'BLE THE CHIEF JUSTICE
       HON'BLE MR. JUSTICE SANJIV KHANNA

1. Whether Reporters of local papers may be allowed to see the judgment?
2. To be referred to the Reporter or not ?
3. Whether the judgment should be reported in the Digest ?

SANJIV KHANNA, J.:

       The petitioner, Ms. Kuldeep Kaur, a resident of Delhi, had

imported a Toyota car vide bill of entry No. 770385 on 24th

February, 2009 under Open General Licence Scheme. The car

was allowed to be imported on payment of customs duty

amounting to Rs.34,83,890/-.

2.     The car was registered in Maharashtra. It is the claim of

the petitioner that they were in possession of the car and using

the same. This aspect, however, is controverted and denied by
WRIT PETITION (CIVIL) NO. 11035/2009                                 Page 1 of 6
 the respondent Nos. 2 to 4. It is not necessary to adjudicate and

decide the said controversy in the present writ petition as the

said aspect has to be dealt with and decided by the respondent

nos. 2 to 4. It is the case of the petitioner that in April, 2009 she

sold the car to respondent No. 5, Mohd. Farooq, for

consideration of Rs.73 lacs but complete consideration has not

been paid. Therefore, registration of the car was stalled.

3.     On 15th July, 2009, the officers of the Directorate of

Revenue Intelligence, Mumbai zonal unit seized the car from

possession of the respondent No. 5 vide panchnama dated 15th

July, 2009.       It is alleged that the car was under-valued and

accordingly appropriate customs duty was not paid.

4.     The petitioner states that after the car was seized, the

respondent No. 5 informed the petitioner and asked her to get

the car released. As the petitioner had imported the car, she got

in touch with the respondent Nos. 2 to 4 and furnished

documents with regard to the purchase value of the car. The

petitioner claims that several documents have been produced

and were sent to the said respondent Nos. 2 to 4 to justify the

purchase value of the car and that the car was not under-valued

and accordingly correct customs duty has been paid.

WRIT PETITION (CIVIL) NO. 11035/2009                         Page 2 of 6
 5.     The respondent Nos. 2 to 4 have controverted the said

statement and stated that the car was seized under Section 110

of the Customs Act, 1962 (Act, for short). According to them,

the car was under-valued and the CIF value of the car was

Rs.54,12,000/- as per the rate of exchange prevailing on 24th

February, 2009, i.e., the date of bill of entry. It is also mentioned

in the seizure memo that the value of the car was

Rs.1,10,00,000/- at the time of import. Other allegations made

in the counter affidavit have been referred to below.

6.     The car was subsequently released under Section 110A of

the Act on payment of Rs.28,50,000/- and bank guarantee of

Rs.13,80,000/- . The said amount was paid by the respondent

No. 5 and the respondent No. 5 had also furnished bank

guarantee.

7.     During the course of hearing, learned counsel for the

respondent Nos. 2 to 4 has stated that the bank guarantee has

expired and has not been renewed.

8.     Learned counsel for the petitioner has submitted that

ultimately it is the petitioner who will have to bear the additional

duty, interest or penalty if chargeable on the car in view of the

contention of the respondent Nos. 2 to 4 that the car was under-

WRIT PETITION (CIVIL) NO. 11035/2009                        Page 3 of 6
 valued. It is also stated by her that the car was imported in Delhi

and the duty was also paid in Delhi. In view of the aforesaid

facts, we reject the contention of the respondent Nos. 2 to 4 that

this Court does not have territorial jurisdiction to entertain the

present writ petition as substantial part of cause of action had

arisen in Delhi.

9.     In view of the release of the car pursuant to the order

under Section 110A of the Act, part relief has already been

granted to the petitioner.             However, an order under Section

110A of the Act is only an interim order. Respondent Nos. 2 to 4

are required to bring the proceedings to a logical end by

deciding and determining whether or not there was any under-

valuation at the time of import and pass an order under the Act

after following the due procedure.             Learned counsel for the

respondent Nos. 2 to 4 has submitted that for this show cause

has to be issued to the petitioner and after considering the reply,

an adjudication order is to be passed. We fail to understand

why the said course has not been resorted to. Learned counsel

for the respondent Nos. 2 to 4 is also unable to answer why

adjudication order has not been passed.

10.    The respondent Nos. 2 to 4 in their counter affidavit have

WRIT PETITION (CIVIL) NO. 11035/2009                           Page 4 of 6
 made number of allegations that there have been clandestine

imports of high end cars in the name of third parties by resorting

to diverse fraudulent means and in breach of provisions imposed

for import of such cars under the foreign trade policy and the

provisions of the Act. It is alleged that there have been mis-

declarations. It is alleged that some of the cars which were

imported were second hand but were mis-declared as new as

new cars attracted duty at 113%, whereas in the case of old cars

duty was payable at 165%.              Name of the alleged operator

behind the petitioner has been mentioned. It is alleged that the

operators behind the petitioner were arrested.        These are all

aspects which have to be decided and considered by the

respondent Nos. 2 to 4 while passing the adjudication order.

However, the proceedings must be brought to a logical end and

cannot be left in abeyance.

11.    In view of the aforesaid discussion, it is directed that the

respondent Nos. 2 to 4 should issue show cause notice within a

period of four weeks from the date copy of this order is received

by them.          Along with the show cause notice, the said

respondents will also enclose relevant documents.                The

respondent Nos. 2 to 4 can also rely upon the affidavit filed by

WRIT PETITION (CIVIL) NO. 11035/2009                        Page 5 of 6
 the respondent No. 6, M/s Toyota Kirloskar Motor Company

Private Limited or other documents and material available with

them.     Reply will be furnished within three weeks thereafter.

The respondents after considering the reply and after giving

hearing to the petitioner or their authorized representative, will

pass an adjudication order as required and contemplated by the

Act.    In case there is any third party involvement, show cause

notice can be issued to the said party also. In case there is any

violation of any law, it will be open to the respondent Nos. 2 to 4

to take appropriate action in accordance with law as may be

considered just and proper. We also clarify that we have not

passed any stay order or direction prohibiting the respondent

Nos. 2 to 4 from acting in accordance with law and taking action

as may be required, including filing of criminal prosecution.

        The writ petition is accordingly disposed of. No costs.




                                           SANJIV KHANNA, J.

CHIEF JUSTICE

APRIL 28, 2011 VKR