Court holds prolonged detention without proper seizure memo illegal under Customs Act, 1962; directs release of vehicle and imposes costs on Directorate of Revenue Intelligence
In a significant judgment delivered on August 25, 2026, the Gujarat High Court (Division Bench comprising Justices A.S. Supehia and Vaibhavi D. Nanavati) quashed the prolonged detention of a Toyota Land Cruiser imported by Pranavbhai Ambalal Patel, holding that the Directorate of Revenue Intelligence (DRI) had violated statutory provisions under the Customs Act, 1962 by failing to comply with mandatory procedural safeguards related to seizure and detention of imported goods.
The petitioner had imported the vehicle from Japan, duly filing the Bill of Entry and paying applicable customs duty and stamp duty by the end of December 2024. However, on February 7, 2025, the DRI conducted a search at the petitioner’s residence, detained the vehicle through a Panchnama, and prohibited the petitioner from dealing with the car. Despite repeated summons and the petitioner’s cooperation in providing documents, the DRI failed to issue a proper seizure memo under Section 110(1) of the Customs Act until April 17, 2026—more than one year after the initial detention. The show-cause notice under Section 124 was issued subsequently on May 8, 2026.
The Court observed that detention of goods merely through a Panchnama, without a formal seizure order explicitly recording reasons to believe the goods were liable for confiscation, does not satisfy the legal requirements of Section 110(1) of the Customs Act. The absence of a timely seizure memo meant that the six-month statutory timeline for issuing a show-cause notice under Section 124 had effectively lapsed, thereby rendering the detention illegal. The Court further noted that the respondents’ reliance on conditions from Circular No. 35/2017 for provisional release was unsustainable, as paragraph 2 of the circular had been struck down by the Delhi High Court in a prior judgment.
Rejecting the DRI’s contention that the pendency of the writ petition impeded initiation of seizure proceedings, the Court emphasized that the High Court had repeatedly directed prompt investigation and had not restrained the authorities from taking appropriate action. The Court criticized the delay and inaction on the part of the DRI and underscored that indefinite detention under the guise of “detention” without a proper seizure order cannot be permitted.
Relying on Supreme Court precedents including Union of India v. Jatin Ahuja (2025), the Gujarat High Court held that the legal framework mandates issuance of a seizure memo with recorded reasons and adherence to prescribed timelines. The improper detention and delayed seizure memo issuance violated these principles.
Consequently, the Court directed the respondents to release the Toyota Land Cruiser within two weeks and imposed costs of Rs.10,000 on the respondents for procedural lapses and non-compliance. The judgment reaffirms the importance of strict compliance with statutory procedures in customs enforcement actions, protecting importers against arbitrary or prolonged detention of goods.
Bottom Line:
Customs Act - Detention and seizure of imported goods - Seizure memo must be issued within statutory timelines as per Section 110 of the Customs Act, 1962 - Provisional release order based on invalidated circular conditions is unsustainable.
Statutory provision(s):
Customs Act, 1962 Sections 110(1), 110(2), 124(a); Circular No. 35/2017-Customs; Instruction No. 1/2017-Cus.
