The judgment of Hon’ble Allahabad High Court in the case of M/S Maa Kamakhya Trader v/s Commissioner Of Customs (Preventive) And 2 Others; WRIT TAX No. – 1287 of 2023 sheds light on the principles of customs law and the powers of authorities in cases of seizure and confiscation of goods. The case involved the seizure of a substantial quantity of Arecanuts from the Petitioner, M/S Maa Kamakhya Trader, by the revenue authorities.
In the instant case, the Hon’ble High Court found that the revenue authorities had failed to demonstrate the existence of objective material or valid reasons to support their belief that the seized goods were of foreign origin. As a result, the Court ruled in favour of the petitioner, quashing the seizure order and directing the release of the goods.
The judgment highlighted that goods cannot be confiscated unless they belong to a prohibited category, indicating either a general prohibition on their import or that they were not validly imported. In this case, which involved Arecanuts, a product commonly grown within the country, the authorities were obligated to provide credible material demonstrating that the goods had been brought from outside the country. This requirement is crucial to establish the basis for forming a “Reason to Believe” that the goods are liable for confiscation.
Furthermore, the judgment also stresses the importance of the relevancy of the material presented by authorities to support their belief. It highlights that the sufficiency of reasons may not be the focus in such proceedings, but the material’s relevance remains a fundamental criterion that must be met by the authorities.
Additionally, the judgment reiterates that the belief forming the basis for confiscation must not be arbitrary, vague, or irrational. It must be grounded in objective and credible material that justifies the action taken by the authorities. The court’s scrutiny in this regard ensures that the power to confiscate goods is exercised judiciously and in accordance with the law.
In conclusion, this judgment emphasizes that the principle of “Reason to Believe” for confiscating goods must be founded on credible material. It also highlights the need for authorities to demonstrate a valid and substantiated basis for such beliefs, ensuring that the rights of individuals and businesses are protected against arbitrary or unfounded actions.

Author of this article:

Adv. Ravish Bhatt,
Partner, R&D Law Chambers,
Dual Qualified Lawyer Solicitor | International Tax Affiliate

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