North India Statesman
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Mumbai: The Bombay High Court said that due process should be followed before seizing a person's bank account and arbitrary decisions should not be allowed as it could lead to imposition of arbitrary powers on the person and his legitimate business activities.
The High Court canceled the Customs' decision to freeze the bank accounts of three gold traders. The court found that the concerned authority did not follow the procedure under the Customs Act.
According to the law, a senior official can temporarily block a bank account from operation to prevent revenue loss or smuggling. However, a detailed process is mentioned before taking a bank account.
The hearing was on a petition filed by three jewellers, Choksi Arvind Jewellers, Pallav Gold and Maxis Bullion. All three had sought cancellation of the Customs Department's order freezing their bank accounts in January.
This action was taken after their offices were searched in the investigation of gold smuggling in India. He claimed that Teemu was not informed about the temporary attachment of his bank account by the Customs Department. The account was written directly to the concerned bank.
Counsel for Customs argued that no written order was required and the letter given to the bank was tantamount to an order. Disagreeing with this argument, the court held that the officer concerned must have formed an opinion that there was a need to freeze the bank account and this opinion must have been for the purpose of preventing government revenue or smuggling.
The court set aside the order and directed the bank to allow the petitioners to operate their accounts without any hindrance. The court, however, made it clear that Customs can take temporary custody of the accounts at any time after due process.
