2026-VIL-1046-PAT-CU
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CUSTOMS High Court Cases

Customs – Provisional attachment of bank account under Section 110(5) of Customs Act basis allegations of fraudulent export activities and wrongful availment of Input Tax Credit – Validity of provisional attachment orders issued without approval of Commissioner and without prior written order to bank account holder – Whether provisional attachment can be ordered without compliance with procedural and substantive requirements of Section 110(5) including prior Commissioner approval and issuance of written order to account holder containing reasons – HELD - The power of provisional attachment is draconian in nature and must strictly conform to both substantive and procedural requirements of statute. The Proper officer must form opinion that attachment is necessary for protecting interest of revenue or preventing smuggling based on tangible material. Such opinion must bear proximate and live nexus to purpose of protecting revenue and not merely be expedient - Each ingredient of Section 110(5) is integral and must be strictly complied with. Legislature was conscious of severity of such power and serious consequences flowing from attachment of bank account hence conditioned exercise of power by requiring approval of superior authority; power is not intended to authorize preemptive strikes on property merely because it is available for being attached – The Provisional attachment orders issued without Commissioner approval are not in accordance with statute; post facto issuance of provisional attachment orders to validate earlier debit freezes without prior authorization cannot retrospectively cure the illegality of earlier unauthorized freezes – Further, extension orders issued without prior notice and opportunity of hearing to account holder and without recording reasons are bad in law as Section 110(5) contemplates pre-decisional hearing for extension – The provisional attachment orders issued without Commissioner approval are quashed; extension orders are set aside for non-compliance with statutory requirements of providing reasons and pre-decisional hearing to account holder - Respondent may proceed afresh with provisional attachment orders in accordance with law if so advised by following all substantive and procedural requirements of Section 110(5) – The writ petition is allowed
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