Madras High Court
Syed Mnueer Ahmed vs Directorate Of Revenue Intelligence, ... on 17 April, 2004
Equivalent citations: 2004(3)CTC209, 2004(95)ECC420
Author: S. Ashok Kumar
Bench: S. Ashok Kumar
ORDER S. Ashok Kumar, J.
1. This petition has been filed to quash the summons issued by the respondent in DRI F.No. VIII/48/58/2003-DRI dated 13.1.2004.
2. The brief facts of the case are as follows:
The petitioner was arrested on 11.10.2003 by the respondent while he was about to travel to Kualaumpur along with his wife and he was intercepted and foreign exchange equivalent to Rs. 29.39 lakhs was seized from them and a case was registered.
2A. During the course of seizure proceedings, the petitioner was enquired under Section 108 of the Customs Act, 1962, and after enquiry, he was arrested and remanded to judicial custody. During the enquiry, M/s Otel International, Chennai by undervaluing the same and the petitioner has stated that he has been importing furniture in the name of that two such consignments were lying at the Chennai Harbour pending clearance. He further stated that he used to carry foreign exchange to pay to the foreign suppliers towards the under-invoicing of imports of furniture. Two Bills of Entry dated 6.10.2003 were examined and were seized on 30.10.2003 and 31.10.2003.
3. During the course of search of the residential premises of the petitioner, documents relating to the import of furniture were recovered and seized. On 3.11.2003, the office premises of M/s. Otel International was searched and documents relating to import of furniture were recovered and seized. In relation to the seizure of the above consignments of furniture, a separate case was registered under File No. VIII/48/58/2003-DRI and independent investigation under the Customs Act was initiated.
4. The petitioner was remanded to custody for the offences under Sections 132 and 135(1)(a) of the Customs Act. On 22.1.2003, the Secretary to Government Public (SC) Department issued G.O.No. SR-1/1331/2/20 03 and detained the petitioner herein under the COFEPOSA Act on 27.10.2003. The representations sent on behalf of the petitioner to revoke the detention order were rejected by both the Central and State Governments. But the Advisory Board, by Order dated 27.12.2003, revoked the order of detention and the petitioner was released on bail on 29.12.2003 by the Economic Offences Court, Egmore, Chennai.
5. The petitioner was issued a summons under Section 108 of the Customs Act on 7.1.2004, directing him to appear on 12.1.2004. As the petitioner was undergoing treatment, he sent a letter expressing his inability to appear on 12.1.2004. The respondent again issued a summons on 13.1.2004 directing the petitioner to appear on 27.1.2004. According to the petitioner, the summons issued by the respondent is illegal and without jurisdiction. On the same set of facts, the petitioner was remanded on 11.10.2003 and he was released on bail on 29.12.2003 and therefore, the present summons is without jurisdiction as if it would amount to double jeopardy.
6. On 11.10.2003, the petitioner was enquired by the respondent on the same set of facts and again issued summons to appear before him which shows the vindictive attitude of the respondent. According to the petitioner, the issue of summons is mala fide and vindictive. The petitioner is suffering from heart ailment and if he is examined again by the respondent, his health will be further deteriorated. Therefore, the petitioner prays to quash the summons issued by the respondent.
7. The respondent has filed a counter affidavit and has alleged that on 11.10.2003, when the petitioner attempted to smuggle foreign exchange equivalent to Rs. 29.39 lakhs, the same was seized and he was enquired under Section 108 of the Customs Act. The petitioner has imported two consignments of furniture by under-valuing the same and the money carried by him was only to pay to the party towards under invoicing imports of furniture.
8. On the basis of the search conducted in the residence of the petitioner and his office M/s. Otel International, a separate case was registered under File No. VIII/48/5 8/2003-DRI. The investigation was with regard to the import of furniture in the name of M/s. Otel International, in which the petitioner is the Managing Partner. It is necessary for the investigating agency to inquire the petitioner with regard to the said imports of furniture and also with a view to provide an equitable opportunity of natural justice to the petitioner to put forth his side of the case. It is for this purpose that the summons was issued to the petitioner calling him to produce documents in his possession or under his control, namely, all relevant documents such as bills of entry, bills of lading, sales contract, payments made in the bank, sales (local), balance sheet, etc., in connection with import of furniture by under-declaration of value in the name of M/s. Otel International and also based on imports.
9. The enquiry on 11.10.2003 was with regard to the seizure of foreign exchange from him and the summons dated 13.1.2004 was issued to the petitioner in connection with the investigation in relation to the under-invoiced imports of furniture and thus both the investigations are separate and independent under the statute. Therefore, the contention of the petitioner that he was enquired by the respondent for the same set of facts and was again issued summons to appear before him shows the vindictive attitude of the respondent, is totally untenable. Therefore, it is not open to the petitioner to contend that he was already been enquired since the fresh notice is on a different issue relating to under-invoiced imports of furniture in the name of Otel International leading to customs duty evasion, while the earlier investigation was with regard to smuggling of foreign exchange out of India by the petitioner.
10. The preliminary investigation relating to the imports of furniture in the name of M/s. Otel International shows customs duty evasion of more than a crore of rupees thereby an in-depth investigation is necessitated to find out the entire ramification of the revenue loss. Therefore, such an investigation under the statute is not only an investigative necessity in law but also extending an equitable opportunity to the petitioner to put forth his side of the matter in accordance with the principles of natural justice. But the petitioner, without utilizing this opportunity and cooperating with the investigation, has prematurely sought the interference of this Court by submitting incorrect fact position, which, is unwarranted at this stage of the matter. The petitioner has not made out a valid ground for the interference of this Court and the petition is not maintainable at this stage.
11. Summons has been issued by the competent officer under Section 108 of the Customs Act, 1962 and the same cannot be assailed under Section 482, Cr.P.C.
12. The Hon'ble Supreme Court, in a recent judgment Special Director of Enforcement v. Mohamed Gulam Ghouse and Anr., 2004 (1) Supreme 431 has held that Courts should not entertain even writ petitions questioning the legality of the show cause notice by stalling enquiries and retarding investigation process to find out the actual facts with the participation and in the presence of the parties. In the light of this ruling, the present petition is legally untenable.
13. The learned Senior Counsel Thiru M. Ravindran, appearing on behalf of the petitioner, would contend that earlier, the petitioner was arrested for an alleged attempt to smuggle foreign exchange equivalent to Rs. 29.39 lakhs and the respondent initiated steps to detain the petitioner under the COFEPOSA Act; but, the Advisory Board revoked the order issued by the State Government and therefore, as a vindictive attitude, the respondent wants to fix this petitioner in a subsequent proceedings. According to the learned senior counsel, when the petitioner was already enquired on 11.10.2003 and when he has been already interrogated about the import of furniture by him and the purpose for which the money was taken by him, the further interrogation of the petitioner on the same set of facts is mala fide and vindictive.
14. On the other hand, the learned Special Public Prosecutor appearing for the respondent would contend that the case of seizure of foreign exchange on 11.10.2003 was registered as a case in File No. VIII/48/58/2003-DRI on 13.1.2004, whereas, the case with regard to the import of furniture by the company in which the petitioner is the Managing Partner by under-invoicing, is a separate case and hence, both these cases are totally different. According to the learned Special Public Prosecutor, preliminary investigation relating to the imports of furniture in the name of M/s. Otel International has revealed that more than a crore of rupees of customs duty evasion has been committed by the petitioner and an in-depth investigation is necessary to find out the entire ramification of the revenue loss to the Government. According to him, it is not only necessary for investigation purpose but also examining the petitioner himself to put forth his side of the matter in accordance with the principles of natural justice. The learned Special Public Prosecutor further contends that under Section 482, Cr.P.C. the summons issued under Section 108 of the Customs Act cannot be quashed.
15. The materials available on record would show that the petitioner was importing furniture in the name of his company called M/s. Otel International, Chennai, and two such consignments have already been received under the Bills of Entry 538369 and 538663 both dated 6.10.2003. It is the allegation of the respondent that these consignments which were pending clearance at Chennai, were supplied by under invoicing the imported furniture. The earlier case with regard to the improper exporting of foreign currency is an offence punishable under Section 114 of the Customs Act, 1962, and the goods can be confiscated under Section 113 of the Customs Act. Under Section 2(22) of the Customs Act, goods includes currency and negotiable instruments and this offence has been committed on 11.10.2003 on which date, the petitioner attempted to export foreign exchange equivalent to Rs. 29.39 lakhs, which is an offence punishable under Section 114 of the Customs Act; but the import of furniture by under-invoicing from a place outside India is liable for confiscation under Section 111 of the Customs Act, and punishable under Section 112 of the Act. Therefore, the two cases registered against the petitioner, though may have connection with one another or separate, the offences are punishable under separate Sections of the Customs Act.
16. In The Special Director and Anr. v. Mohamed Gulam Ghouse and Anr., 2004 (1) Supreme 431, the Supreme Court has held as follows:
"This Court in a large number of cases has deprecated the practice of the High Courts entertaining writ petitions questioning legality of the show case notices stalling enquiries as proposed and retarding investigative process to find actual facts with the participation and in the presence of the parties. Unless the High Court is satisfied that the show cause notice was totally non est in the eye of law for absolute want of jurisdiction of the authority to even investigate into facts, writ petitions should not be entertained for the mere asking and as a matter of routine, and the writ petitioner should invariably be directed to respond to the show cause notice and take all stands highlighted in the writ petition. Whether the show cause notice was founded on any legal premises is a jurisdictional issue which can ever be urged by the recipient of the notice and such issues also can be adjudicated by the authority issuing the very notice initially, before the aggrieved could approach the Court. Further, when the Court passes an interim order it should be careful to see that the statutory functionaries specially and specifically constituted for the purpose are not denuded of powers and authority to initially decide the matter and ensure that ultimate relief which may or may not be finally granted in the writ petition is accorded to the writ petitioner even at the threshold by the interim protection, granted. In the instant case, the High Court has not indicated any reason while giving interim protection. Though, while passing interim orders, it is not necessary to elaborately deal with the merits, it is certainly desirable and proper for the High Court to indicate the reasons which has weighed with it in granting such an extraordinary relief in the form of an interim protection. This admittedly has not been done in the case at hand."
17. As per the decision of the Hon'ble Apex Court, as stated above, unless the show-cause notice issued by the respondent is totally non est in the eye of law for absolute want of jurisdiction of the authority to even investigate the petitioner, this Court cannot entertain the writ petition. By maintaining such writ petitions or Criminal O.Ps. under Section 482, Cr.P.C. enquiries, as proposed, are stalled or investigative process is retarded from finding out the actual facts with the participation and in the presence of the parties.
18. As rightly contended by the learned Special Public Prosecutor, by summoning the petitioner to appear for enquiry, not only the Department/ Respondent has got an opportunity to investigate for finding out the entire ramification of the alleged revenue loss to the Government, but also an equitable opportunity is given to the petitioner to put forward his stand and vindicate his grievance. Hence, I do not find any illegality in the issuance of summons by the respondent to the petitioner to appear before him.
Therefore, this Criminal O.P. is dismissed and the stay earlier granted is vacated. Consequently, the connected Crl.M.P. is closed.