The Gauhati High Court has upheld the seizure of 33,600 kilograms of areca nuts valued at approximately ₹2.22 crore by Customs authorities, ruling that the officers had sufficient “reason to believe” under Section 110 of the Customs Act, 1962 to suspect that the goods were liable to confiscation. However, directed the release of the seized vehicle to its owner upon fulfillment of suitable conditions.
The bench of Justice Pranjal Das has observed that if confiscation proceedings u/s 111 of the Act are carried out by the Customs authorities with regard to the seized arecanuts – then in terms of section 124 of the Act, the petitioner is to be noticed and given a chance of hearing. Therefore, in any confiscation proceeding, the petitioner company is the purported owner of the arecanuts would be at liberty to produce all the documents in support of its contention, that the arecanuts should not be confiscated.
A writ petition was filed by a private company engaged in the business of sale and supply of areca nuts. The company had challenged the seizure of areca nuts and the truck transporting them, contending that the action of Customs authorities was illegal and without jurisdiction.
According to the petitioner, the areca nuts were lawfully procured from the local market in Hailakandi, Assam, and were being transported to the company’s own godown in Guwahati as a stock transfer supported by a delivery note. The company asserted that the goods were not intended for sale to any third party and that valid documents existed in support of the transportation.
The Customs Preventive Division intercepted the truck on November 6, 2025, and seized both the goods and the vehicle under Section 110 of the Customs Act on the ground that the areca nuts were suspected to be of foreign origin. The inventory prepared by Customs valued the seized goods at ₹43.13 lakh, while subsequent investigation records referred to the consignment as consisting of 480 bags weighing 33,600 kilograms with an estimated market value of around ₹2.22 crore.
The petitioner challenged the seizure on multiple grounds. It argued that Section 110 of the Customs Act permits seizure only when the officer has “reason to believe” that the goods are liable to confiscation, whereas the present seizure was based merely on suspicion. The company further contended that Customs authorities lacked jurisdiction to seize goods for alleged violations relating to GST compliance, such as non-generation of e-way bills, as such powers are vested in GST authorities under the GST regime.
The petitioner also maintained that valid documents existed to establish the lawful origin and transportation of the goods and that no material had been disclosed by Customs to justify the formation of a reasonable belief regarding smuggling or illegal importation.
The Customs authorities defended the seizure, asserting that the interception was carried out based on specific intelligence relating to smuggling of areca nuts through the northeastern region. According to the department, no invoice, e-way bill, delivery challan, or other transport documents were produced by the person in charge of the vehicle at the time of interception.
The department further stated that the driver allegedly assaulted a Customs official during the operation and fled from the spot, thereby strengthening the suspicion that the goods were being transported unlawfully. Customs also pointed to the enormous quantity and value of the areca nuts, inconsistencies in the documents later produced, and the region’s vulnerability to cross-border smuggling activities.
The Court undertook a detailed analysis of Section 110 of the Customs Act and the judicial interpretation of the expression “reason to believe.” Referring to decisions of the Supreme Court, including Indru Ramchand Bharvani and State of Gujarat v. Mohanlal Jitamalji Porwal, the Court observed that the existence of reasonable belief must be assessed from the perspective of an experienced Customs officer based on the circumstances prevailing at the time of seizure.
The Court emphasized that judicial review cannot involve re-evaluating the sufficiency of the material that led to the formation of such belief, so long as relevant and germane material existed. It further held that the validity of the seizure must be judged on the basis of information available to the officer at the time of interception and not on documents produced subsequently.
The bench noted several circumstances that justified the Customs officer’s decision to invoke Section 110. These included the transportation of 33,600 kilograms of areca nuts packed in 480 bags, absence of transport documents at the time of interception, the alleged assault and subsequent disappearance of the driver, and the prevalence of areca nut smuggling in the northeastern region.
The Court also referred to the seizure report and panchanama, which recorded that no supporting legal documents were produced during the interception and that a police complaint had been lodged regarding the alleged assault on Customs personnel.
After examining the facts and legal principles, the High Court concluded that the Customs officer had bona fide reasons to believe that the goods were liable to confiscation and that the statutory requirement under Section 110 had been satisfied. Consequently, the Court upheld the seizure of the areca nuts and rejected the company’s request for their release.
At the same time, the Court clarified that if confiscation proceedings are initiated under Section 111 of the Customs Act, the petitioner must be given notice and an opportunity of hearing under Section 124 of the Act and would be entitled to produce all relevant documents in support of its claim that the goods should not be confiscated.
While sustaining the seizure of the areca nuts, the Court distinguished the position of the truck owner. Observing that the vehicle belonged to a separate individual who had not participated in the proceedings, the Court directed Customs authorities to release the truck upon verification of ownership and subject to suitable conditions, including furnishing of an appropriate bond.
With these observations, the writ petition was dismissed.
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