Bombay HC cancels customs order, seeks fresh hearing in gold refund dispute
MUMBAI: The Bombay High Court set aside a customs order that partially denied a gold refund claim and remanded the matter for fresh adjudication, citing failure to consider key legal principles and procedural fairness.
A Division Bench comprising Justices B. P. Colabawalla and Firdosh Pooniwala was hearing a writ petition filed by an Shabbir Ahmed Qureshi whose seized gold was sold by customs authorities. The Petitioner had claimed a refund of Rs. 41.47 lakh, but was sanctioned only Rs. 19.69 lakh by the adjudicating authority on March 20, 2024.
The crux of the Petitioner's grievance was that the customs authority relied on Instruction No.
22/2022-Customs, issued after the sale of the seized gold on March 5, 2020, to justify calculating the refund based on the net realised value, rather than the prevailing market value at the time of refund — a principle upheld in earlier court rulings including Leyla Mehmoodi vs. Additional Commissioner of Customs (2023).
The Bombay Court had earlier ruled in favour of Leyla Mahmoodi and Mojtaba Gholami, two Iranian nationals, asserting that the Customs Department's unilateral disposal of gold jewellery seized from them without proper notice was a violation of their rights.The judgment criticized the Customs officials for not following due process, emphasizing the need for transparency and adherence to statutory provisions before disposing of seized items.
by Taboola
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The Petitioner through his lawyer Prakash Shingrani and Anil Ballani alleged that they were not given a chance to respond to the said Instruction before it was used against their claim. Further, the Petitioner denied receiving any notice regarding the sale of gold despite customs asserting such notices were issued in February 2019 and 2020. No acknowledgments or official references to those notices were found in the impugned order, raising doubts about the legitimacy of the communication.
The Court found merit in the Petitioner's contentions and held that Respondent No. 3 (the customs authority) failed to address crucial arguments and did not follow procedural fairness. 'Many of the contentions raised by the Petitioner have not been considered,' the bench noted.
In its directive, the Court ordered the impugned order is quashed to the extent it denied the refund claim, Customs must reconsider the Petitioner's claim of Rs. 21.77 lakh afresh, uninfluenced by the earlier affidavit and in accordance with binding judicial precedent. The Petitioner must be given a fair hearing, including advance copies of any materials or instructions the authority intends to rely on and lastly a personal hearing must be granted, and a fresh speaking order must be issued by July 31, 2025.
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