Telangana High Court
Sadaf Khan vs The Union Of India on 31 October, 2025
Author: P.Sam Koshy
Bench: P.Sam Koshy
1
HIGH COURT FOR THE STATE OF TELANGANA
****
W.P.No.26986 of 2025
Between:
Sadaf Khan
.... Petitioner
And
The Union of India & another.
...Respondents
DATE OF JUDGMENT PRONOUNCED: 31.10.2025
SUBMITTED FOR APPROVAL:
THE HON'BLE SRI JUSTICE P.SAM KOSHY
AND
THE HON'BLE SRI JUSTICE SUDDALA CHALAPATHI RAO
1. Whether Reporters of Local newspapers may Yes/No
be allowed to see the Judgments?
2. Whether the copies of judgment may be Yes/No
marked to Law Reporters/Journals
3. Whether Their Ladyship/Lordship wish to see Yes/No
the fair copy of the Judgment?
________________________________
SUDDALA CHALAPATHI RAO, J
2
* THE HON'BLE SRI JUSTICE P.SAM KOSHY
AND
THE HON'BLE SRI JUSTICE SUDDALA CHALAPATHI RAO
+ W.P.No.26986 of 2025
% 31st October, 2025
W.P.No.26986 of 2025
# Sadaf Khan
.... Petitioners
VS.
$ The Union of India and another
.. Respondents
! Counsel for the Petitioner : Sri SriVedula Srinivas,
learned Senior Counsel
representing Sri S.J.A.Nadeem
^ Counsel for the Respondent No.1 : Sri A.Nehru, learned Central
Government Standing Counsel
^ Counsel for the Respondent No.2 : Sri Dominic Fernandes,
learned Standing Counsel for
CBIC
< Gist:
> Head Note:
? CITATIONS:
1 2008(4) SCC 175
2 WP.No.4996 of 2025, dt.19.03.2025
3 2014 DLT 211 117, decided on 28.05.2014 by the Delhi High Court
4 WP(C) 13361/2009, dt.13.01.2011, High Court of Delhi at New Delhi
5 2023 Ker 76297
3
THE HON'BLE SRI JUSTICE P.SAM KOSHY
AND
THE HON'BLE SRI JUSTICE SUDDALA CHALAPATHI RAO
W.P.No.26986 of 2025
O R D E R:(Per the Hon'ble Sri Justice Suddala Chalapathi Rao) The present Writ Petition is filed assailing the order of the 2nd respondent in C.No.GCCO/LGL/COMP/ 06/2023-Legal, dt.04.12.2024 as arbitrary, unreasonable and illegal, and consequently allow the application of the petitioner, dt.25.10.2016, for compounding of the offences in terms of Section 137 of the Customs Act, 1962 (for short 'the Act') read with Rule 4(3) of the Customs (Compounding of Offences) Rules, 2005 (for short 'the Rules').
2. The petitioner was employed with Emirates Airlines, as Cabin Attendant and was frequently visiting India on official duty. While so, on 09.04.2014 upon her arrival from Dubai by Flight No.EK-526 at Rajiv Gandhi International Airport, Shamshabad, Hyderabad, the Customs (Air Intelligence Unit) Officers intercepted her at the Exit Gate of the arrival hall of the Airport. On inspection of her handbag, after she passed through the Customs Green Channel, the authorities found 13 gold bars of 1 kg each 4 and 5 mobile phones and on enquiry, the petitioner denied the knowledge of the said items and stated that one Mr.Shujat Ali Mohammed, who was also travelling in the same flight, kept few packets in her hand bag at Dubai making her to believe that the said packets contained mobile phones and he would collect them after reaching Hyderabad.
3. The petitioner further contended that her statement was recorded on the same day and the authorities registered a case alleging that the petitioner, in connivance with one Mr.Shujat Ali Mohammed, has attempted to smuggle 13 gold bars worth of Rs.3,75,76,175/- along with five HTC Mobile Phones valued at Rs.1,25,000/- by evading custom duties in contravention of Sections 11, 77 & 79 of the Act, the Foreign Trade Policy 2009-14 and Sections 3(3) of the Foreign Trade (Development and Regulation) Act, 1992. Thereafter, the customs authorities arrested her and produced before the competent jurisdictional Magistrate on the same day i.e., on 09.04.2014 and she was remanded to judicial custody. While so, Mr.Shujat Ali Mohammed, escaped undetected from the customs area and left for Dubai on the same day, and subsequently he was brought 5 back to India. The case is pending adjudication before the competent Court of law.
4. The petitioner further contends that subsequently, the authorities issued a show-cause notice, dt.07.10.2014, to the petitioner proposing confiscation of seized goods under Sections 111(1) and 111(d) of the Act and imposition of penalty under Sections 112 and 114AA of the Act. Further, the Adjudicating Officer vide Order-in-Original, dt.29.07.2016 vide No.78/2016- Adjn.Cus(ADC), ordered confiscation of 13 Gold Bars weighing 1 Kg. each, valued at Rs.3,75,76,175/- and also (05) HTC Mobile Phones valued at Rs.1,25,000/-, imposing redemption fine of Rs.37,50,000/- on the petitioner and penalty of Rs.18,00,000/- each on the petitioner and Mr.Shujat Ali Mohammed, under Sections 114AA and 112(a)(i) of the Act, respectively.
5. It is further contended by the petitioner that she had paid customs duty, penalty along with redemption fine imposed and subsequently, gold was released to the petitioner. Thereafter, prosecution was launched and after investigation, charge sheet was laid in CC.No.25/2019, on the file of Special Judge for Trial of Cases under Economic Offences, Hyderabad, against both the 6 petitioner and Mr.Shujat Ali Mohammed, and the said case is pending adjudication.
6. The petitioner further contended that pending adjudication of the CC., she had filed an application, dt.25.10.2016, for compounding of offences in CC.No.25/2019 before the 1st Respondent i.e., the Chief Commissioner of Customs, Hyderabad, under Section 137 of the Act r/w Rule 4(3) of the Rules, and that the said application was rejected vide order dt.02.02.2017 in C.No.VIII/48/52/2016-Cus-CC(HZ).
7. Petitioner further contends that assailing the rejection order passed by the Compounding Authority, the petitioner had approached this Court by filing a writ petition vide W.P.No.8349 of 2017, which was dismissed by giving liberty to the petitioner to avail the remedy of appeal before the Customs, Central Excise and Service Tax Appellate Tribunal. Pursuant thereto, the petitioner filed Customs Appeal No.30266/2018 before the Appellate Tribunal and the learned Tribunal vide order No.A/30039/2023 remanded the matter to the Chief Commissioner/Principal Chief Commissioner, to decide the application of the petitioner by giving an opportunity of hearing to the petitioner. The said order was 7 questioned by the 1st respondent before this Court in CEA.No.5/2023, which was dismissed on 04.09.2023 and aggrieved thereby, SLP No.11442/2024 was filed by the 1st respondent before the Hon'ble Apex Court, and the said SLP was dismissed on 15.04.2024.
8. Pursuant to the remand by the Appellate Tribunal, the 2nd respondent, after due enquiry and consideration, vide order dt.04.12.2024 once-again rejected the petitioner's compounding application in the light of the judgment of the Apex Court in Union of India v. Anil Chanana 1 and aggrieved thereby, the present Writ Petition has been filed.
9. We have given earnest consideration to the submissions made by Sri Vedula Srinivas, learned Senior Counsel representing Sri S.J.A.Nadeem, for the petitioner, Sri A.Nehru, learned Standing Counsel appearing for respondent No.1, Sri Dominic Fernandaz, learned Standing Counsel appearing for respondent No.2, and perused the material on record.
10. Now the point for consideration before us is, whether the 2nd respondent has properly appreciated the facts by applying the 1 2008(4) SCC 175 8 principles laid down by the Hon'ble Apex Court in Anil Chanana's case(1 supra), and whether the dismissal of the petitioner's application, dt.25.10.2016 for compounding of offences, is just and valid?
11. The findings of the 2nd respondent in rejecting the petitioner's compounding application is extracted hereunder for ready reference and convenience:
"13. In view of the above discussions, I have no hesitation in concluding that the Applicant herein has not made a true and full disclosure of the facts in her compounding application. Her version has been changing from time-to-time and from proceeding-to-proceeding. Even in the written submission dated 28.11.2024 wherein she has come forward to accept her guilt, there is no disclosure of the actual sequence of events and only a reference to the Panchanama dated 09.04.2014 is made. It bears no reiteration that no reasonable person of ordinary prudence would mistake a package containing 13 Kgs of Gold for a package containing cell phones, which are much lighter in weight, that too, when such a package is in the hand baggage. Thus, it is apparent that the Applicant has, at no stage, made a true disclosure and even in these proceedings appears to have come forward to accept her guilt in order to somehow obtain a favourable decision and secure immunity from prosecution."9
12. Sri Vedula Srinivas, learned Senior Counsel appearing for the petitioner contended that the only test put forth for compounding of offences by the Hon'ble Apex Court in the case of Anil Chanana's case(1 supra) is that i) the applicant should be one time evader, ii) she/he has to make a clean breast of affairs, and iii) she/he has to give exhaustive account of the circumstances, in which she/he came to India, and that the 2nd respondent, despite the petitioner fulfilling the said criteria, dismissed the application of the petitioner under misconception of facts and law.
13. Learned Senior Counsel further contends that the petitioner is being the first time evader and also as the Principal Commissioner of Customs, Hyderabad vide report in C.No.I/10/65/2016-Pros., dt.30.12.2016, confirmed the correctness of the application and inter alia informed that the applicant had paid customs duty of Rs.1,19,71,947/-, redemption fine of Rs.37,50,000/- and total penalty of Rs.36,00,000/- as per the Order-in-Original, dt.29.07.2016 vide TR-6 Challan, dt.12.08.2016 and pursuant thereto, seized gold was released and that the petitioner has disclosed all the information without there being any concealment. Thus, the principles laid down by the 10 Hon'ble Apex Court in Anil Chanana's case(1 supra) would squarely apply to the present case, and the impugned order does not stand judicial scrutiny.
14. Per contra, learned Standing Counsel for the 2nd respondent would submit that payment of penalties and releases of goods do not automatically entitle an applicant for compounding of offences. The application filed by the petitioner for compounding is to be dealt independently.
15. Further, the learned Senior Standing Counsel submits that if only the petitioner had made full and truthful disclosure of the facts sequentially, the petitioner is entitled to the relief as claimed. Further contended that the 2nd respondent after considering the contradictions, particularly those noted in paragraph 12.4 of the impugned order, opined that the petitioner has been changing her version from time to time by giving inconsistent statements to suit her convenience and failed to furnish a complete and truthful account of the circumstances, and the 2nd respondent is justified in dismissing the application as the petitioner has not made a full and truthful disclosure of facts and the impugned order warrants no interference by this Court.
11
16. Having considered the rival submissions and the record, it is evident that the Principal Commissioner's report has revealed that the petitioner as a first-time offender and genuineness of the application.
17. The Principal Commissioner has reported that the petitioner is first time evader. Now the only issue for determination is, whether the petitioner has made a full and truthful disclosure of facts, so as to qualify for compounding of the offences in light of the principles laid down by the Hon'ble Apex Court in Anil Chanana's Case(supra).
18. In the light of the above, so as to arrive at a just conclusion, the statements and versions made by the applicant at various levels as extracted in the impugned order at Para 12.4 are hereby reproduced:
"i) In the Panchanama dt.09.04.2014, the Applicant had claimed that the Gold was handed over by an unknown person, whereas in her Statement recorded on the same day, after seizure, she identified Shri Shujat Ali as the person who had handed over the Gold.
ii) It has been claimed by the Applicant that she was tricked into believing that the packages handed over to her by Shri Shujat Ali contained cell phones.
iii) As per Panchanama dt.09.04.2014, the Gold was recovered from the hand baggage of the Applicant. In her reply, dt.04.12.2014 filed before the adjudicating 12 authority, the Applicant has submitted that Shri Sujath Ali had kept the package, from which the Gold was recovered, in her stroller bag in her own presence.
This position is also stated in her first Statement, dt.09.04.2014. However, in her first bail application dt.11.04.2014, the Applicant has submitted before the Economic Offences Court that Shri Shujat Ali, after landing at Hyderabad, had given her one bag to hold from which 13 Gold Bars were recovered. In the second bail application dt.02.05.2014, it is stated that the bag was handed over to her at Dubai by Shri Shujat Ali. The same position has been reiterated in the bail application dated 14.05.2014.
iv) The Applicant has also changed her stance regarding the point of seizure of Gold from her. While in the Panchanama dated 09.04.2014, it is recorded that she was intercepted and Gold was seized from her after she had crossed the Green Channel. However, in the proceedings before the adjudicating authority, it has been stated that she never crossed the Green Channel and that interception and seizure was made before that."
19. A bare reading of the above contradictions reveals material inconsistencies. The claim of the petitioner in her compounding application that she was unaware of the gold bars contradicts her earlier statements in the customs proceedings initiated vide show cause notice dt.07.10.2014, culminated into the Order-in- Original, dt.29.07.2016. The changing versions of the petitioner so as to suit her convenience, be it at the stage of seizure, issuance of show-cause notice, or during the adjudication proceedings, creates serious doubt as to the credibility of her version and 13 negate her claim of making full and complete disclosure of factual events.
20. More so, even in the compounding application, dt.25.10.2016, the petitioner has casually stated the facts, as if she is deemed to be entitled for compounding of offences, and this creates a serious doubt in the mind of this Court, as to the truthful disclosure of facts and circumstances of the case. Further, the changing versions of the petitioner at all stages of the case and the casual narration of facts indicate that the petitioner has filed the application for compounding, as if she is deemed to be entitled for compounding of offences.
21. At the cost of repetition, the Hon'ble Supreme Court in Anil Chanana's case(1 supra), set out the conditions for allowing application for compounding offence under Sec 137 of Customs Act r/w Rule 4(3) of Customs (Compounding) Rules 2005 i.e.,
i) the applicant should be one time evader, ii) he/she has to make a clean breast of his affairs, and iii) he/she has to give exhaustive account of the circumstances, in which he/she came to India.
22. Further, a Division Bench of this Court(to which one of us (PSK,J) is a Member) in Shri. Mohammed Ismail Syed vs 14 Principal Chief Commissioner Of GST And others 2 following the ratio laid down in Anil Chanana's case (1 supra), Deepesh Mamodiya v. Chief Commissioner of Customs(Dz) 3, Hemant Aggarwal v. Union of India 4, and Assistant Commissioner of Customs, Prosecution Cell, Customs House, Cochin v. Edwin Andrew Minihan 5, held that that substantial contradictions between statements under Section 108 and the compounding application justify rejection. In the present case, the petitioner has failed to substantiate her case.
23. In view of the above contradictions and following the law down by the Apex Court in Anil Chanana's case (1 supra) and the judgment of the Division Bench of this Court in Shri. Mohammed Ismail Syed's case(2 supra) and also the law laid down in Hemant Aggarwal's case(4 supra), we are of the considered opinion that the petitioner has failed to make a full and exhaustive disclosure of facts and filed the application only to evade criminal prosecution, and as such, she is not entitled to the relief of compounding. Thus, the findings arrived at by the 2nd respondent in the impugned order are proper and justified, warranting no 2 WP.No.4996 of 2025, dt.19.03.2025 3 2014 DLT 211 117, decided on 28.05.2014 by the Delhi High Court 4 WP(C) 13361/2009, dt.13.01.2011, High Court of Delhi at New Delhi 5 2023 Ker 76297 15 interference by this Court. Hence, the point is answered against the writ petitioner and in favour of the respondents.
24. Accordingly, the Writ Petition is dismissed. No order as to costs.
As sequel thereto, miscellaneous petitions, if any, pending shall stand closed.
__________________ P.SAM KOSHY, J ________________________________ SUDDALA CHALAPATHI RAO, J ______October, 2025 gra 16 THE HON'BLE SRI JUSTICE P.SAM KOSHY AND THE HON'BLE SRI JUSTICE SUDDALA CHALAPATHI RAO W.P.No.26986 of 2025 Dt. .10.2025 gra