Customs / Redemption of Gold · F2J-C-2874
Prikshith Jhaver v. Commissioner of Customs, Terminal 3 & Ors.
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Holding (ratio)
An importer could not be prejudiced by Customs' failure to quantify the duty required to exercise a time-bound redemption option after a timely request.
Operative order (extract)
10. The aforesaid application was admittedly received by the Respondents. However, the Respondents failed to respond. In the Order-in-Original dated 18.11.2022, though the amount of redemption fine and penalty was quantified, the applicable duty, however, was never quantified by the Respondents. The Petitioner never sought enlargement of the period for redemption, rather, he had approached the Respondents seeking quantification of the amount which was required to be deposited in order to exercise the option of redemption. 11. In these circumstances, the Petitioner has not committed any default in complying with aforesaid Order-in-Original and the failure is on the part of the Respondents. The Respondents never took trouble to communicate to the Petitioner that the applicable duty, on quantification, can be paid later on, but the Petitioner should pay the redemption fine along with penalty. 12.
Scope limits
The holding is confined to the issues actually decided in the retained judgment; no view is attributed to the court on questions expressly left open or remanded.
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Complete searchable judgment text
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 10.09.2026
# CNR No. DLHC010148232025
+ W.P.(C) 3527/2025
PRIKSHITH JHAVER .....Petitioner
Through: Mr. Upender Thakur, Ms.
Shreya Kardam and Ms.
Karishma Singh, Advs.
versus
COMMISSIONER OF CUSTOMS TERMINAL 3 & ORS.
.....Respondents
Through: Ms. Anushree Narain, SCC
along with Mr. Apurv Yadav
and Mr. Naman Choula, Advs.
CORAM:
HON'BLE MR. JUSTICE ANIL KSHETARPAL
HON'BLE MR. JUSTICE VIMAL KUMAR YADAV
J U D G M E N T (ORAL)
ANIL KSHETARPAL, J.:
1. Through the present Petition, the Petitioner prays for issuance
of a Writ in the nature of Certiorari to quash the communication/order
dated 08.08.2024. The Petitioner also seeks issuance of a Writ in the
nature of Mandamus directing the Respondents to quantify the
applicable duty so as to enable the Petitioner to deposit the same.
2. At the relevant time, the Petitioner was travelling from Delhi to
Chennai. He was intercepted at the Indira Gandhi International
Airport, New Delhi, with twelve (12) gold bars weighing 1200 grams,
which were detained by Respondents.
3. Ultimately, on 18.11.2022, an Order-in-Original was passed by
the Joint Commissioner of Customs, Terminal-3, Indira Gandhi
International Airport, New Delhi, ordering confiscation of the
Signature Not Verified
Signed By:JAI
NARAYAN
W.P.(C) 3527/2025
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aforesaid gold bars, while granting liberty to the Petitioner to redeem
the confiscated gold bars upon payment of the applicable duty, and
Rs.50,000/- each towards redemption fine and penalty.
4. Pursuant to the aforesaid Order-in-Original dated 18.11.2022,
the Petitioner submitted an application dated 28.12.2022 seeking
quantification of the applicable duty. However, the Department
preferred an appeal against the said order, which came to be dismissed
on 03.08.2023. The order dated 03.08.2023 thereafter attained finality.
5. Subsequently, the Petitioner, on the assumption that the
confiscated gold bars had been disposed of by the Respondents,
submitted an application seeking refund, which was rejected on
30.04.2024 on the ground that the same was premature.
6. It is in these circumstances that the present Writ Petition came
to be filed.
7. Learned counsel representing the Respondents does not dispute
that the twelve (12) gold bars seized from the Petitioner are still
available with the Respondents. She, however, relies upon the
Paragraph Nos.20, 21, 24 and 30 of the judgment dated 23.04.2019
passed by a Three-Judge Bench of this Court in W.P.(C) 1735/2016,
captioned Gillette India Ltd. v. Commissioner of Customs & Ors.,
which read as under:
“20. Under Section 125 of the Act, an option indeed is given to the
importer to redeem the goods by payment of fine. A time limit is also
set for that purpose. If, as in the present case, the importer fails to
avail of that opportunity it leads inevitably to confirming the
„confiscation‟ of the goods and their sale by public auction. Section
126 (1) of the Act spells out the legal effect of such „confiscation‟.
Section 126 (2) of the Act lends a further finality to such vesting. It
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requires the „officer adjudging confiscation‟ to mandatorily “take and
hold possession of the confiscated goods.” Any connection that the
owner/possessor.
21. The distinction sought to be drawn between confiscation of
„prohibited goods‟ and of „other goods‟ is relevant only to the extent
of the discretion in the adjudging officer to permit their redemption by
payment of fine. Once there is a failure to pay the fine within the time
stipulated, the consequence is the same whether the goods are
„prohibited goods‟ or „other goods‟. The transient nature of the
confiscation ends and it becomes „absolute‟. This is what is made
clear by Section 126 of the Act. Sections 125 and 126 of the Act form
one continuous scheme and are not to be read disjunctively. Once the
vesting of the goods in the government is absolute, it would be
inconsistent with the character of that vesting to contend that the
Central Government can only recover through the sale of such goods
the duty, penalty and interest and should return the excess to the
owner/possessor of the goods.
xxxxx xxxxx xxxxx xxxxx xxxxx
24. It is trite that the rule of strict interpretation would apply to
taxation statutes and there is no equity in tax. In Bharat Sanchar
Nigam Limited v. ACIT Manu/ID/0462/2016, the Supreme Court
explained the cardinal rules of interpretation as under:
“13.12. The cardinal Rule of Interpretation is that the
statute must be construed according to its plain language.
Neither should anything be added nor anything be
subtracted therefrom unless there are adequate grounds to
justify the inference that the Legislature clearly so
intended. It is also well settled that in a taxing statute one
has to look merely at what is clearly stated. The meaning
and extent of the statute must be collected from the plain
and unambiguous expression used therein rather than
from any notions which may be considered to be just or
expedient. To put in the words Rowlatt J. as held in Cape
Brandy Syndicate v. Commissioners of Inland Revenue [(1
921) 1 KB 64, 71]. In a taxing Act one has to look merely
at what is clearly said. There is no room for any
intendment. There is no equity about a tax. There is no
presumption as to a tax. Nothing is to be read in, nothing
is to be implied. One can only look fairly at the language
used."
13.14. It is well understood that the Court only interprets
the law and cannot legislate. Even if a provision of law is
presumed to be misused and subjected to the abuse of the
process of law, it is for the legislature to amend, modify or
repeal it, if deemed necessary as held in Padma Sundara
Rao v. State of Tamil Nadu (2002) 255 ITR 147 at pages
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154 to 155 (SC); Prakash Nath Khanna v. CIT (2004) 266
ITR 1 at page 9 [SC]; Union of India v. Rajeev Kumar
AIR (2003) SC 2917 at 2923. Courts cannot reframe the
words used by the legislature as they have no powers to
legislate. A matter which, for the sake of an argument,
should have been provided for in a statute cannot be
supplied by the Courts as to do so will be an act of
legislation and not of interpretation. Reliance may be
placed on Smt. Kanta Devi v. Union of India (2003) 4 SCC
753 & 757. 13.17. The settled principles of interpretation
are that the Court must proceed on the assumption that the
legislature did not make a mistake and that it did what it
intended to do. The Court must, as far as possible, adopt a
construction which will carry out the obvious intention of
the Legislature. Undoubtedly, if there is a defect or an
omission in the words used by the Legislature, the Court
would not go to its aid to correct or make up the
deficiency. The Court could not add words to statutes or
read words into it which are not there, especially when the
literal reading produces intelligible results. Reference
may be made to Dadi Jaganath Dham v. Jammullu
Ramulu AIR [2001] (SC) 2699 at 2703. Any presumption
to the contrary in the absence of any ambiguity would be
contrary to the settled legal position as the legislature as
far as possible is presumed to know what it intends to
stay.”
xxxxx xxxxx xxxxx xxxxx xxxxx
30. To summarise the conclusions:
(a) Once there is a failure to pay the redemption fine in lieu of
confiscation as determined under Section 125 of the Act, within the
time stipulated, the consequence of the „confiscation‟ becoming
absolute and the confiscated goods vesting absolutely in the central
government inevitably has to follow in terms of Section 126 of the Act.
The consequence is the same whether the goods are „prohibited
goods‟ or other goods‟.
(b) Sections 125 and 126 of the Act form one continuous scheme and
are not to be read disjunctively. Once the vesting of the goods in the
government is absolute, it would be inconsistent with the character of
that vesting to contend that the Central Government can only recover
through the sale of such goods the duty, penalty and interest and
should return the excess to the owner/possessor of the goods.
(c) Therefore, this Court is unable to concur with the DB which
decided MMTC v. Surjit Singh Kanda (supra) that on a collective
reading of Sections 125 and 126 of the Act, the Customs Department
is precluded from retaining the excess sale proceeds after adjustment
of duty, penalty and interest.”
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8. The substance of the aforesaid judgment is that once an option
of redemption is granted under Section 125 of the Customs Act, 1962,
the same is required to be exercised within the period stipulated by the
adjudicating authority, failing which the confiscation becomes
absolute in terms of Section 126 of the Act.
9. The Petitioner had 120 days from the date of the Order-in-
Original, i.e., 18.11.2022, to seek redemption of the aforesaid gold
bars. He submitted an application dated 28.12.2022 seeking
quantification of the applicable duty so as to enable him to avail of the
option of redemption, which is extracted as under:
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10. The aforesaid application was admittedly received by the
Respondents. However, the Respondents failed to respond. In the
Order-in-Original dated 18.11.2022, though the amount of redemption
fine and penalty was quantified, the applicable duty, however, was
never quantified by the Respondents. The Petitioner never sought
enlargement of the period for redemption, rather, he had approached
the Respondents seeking quantification of the amount which was
required to be deposited in order to exercise the option of redemption.
11. In these circumstances, the Petitioner has not committed any
default in complying with aforesaid Order-in-Original and the failure
is on the part of the Respondents. The Respondents never took trouble
to communicate to the Petitioner that the applicable duty, on
quantification, can be paid later on, but the Petitioner should pay the
redemption fine along with penalty.
12. Having regard to the fact that the Petitioner had approached the
Respondents within the prescribed period and that the applicable duty
was not quantified despite his request, the failure to exercise the
option of redemption within the stipulated period cannot, in the facts
of the present case, be attributed solely to the Petitioner. The decision
in Gillette India Ltd. (supra), therefore, does not preclude the relief
sought in the present Petition.
13. In view of the aforesaid circumstances, the present Writ Petition
is disposed of with a direction to the Respondents to communicate to
the Petitioner the applicable duty payable in respect of the confiscated
gold bars within a period of fifteen (15) days from today. The moment
the applicable duty is communicated to the Petitioner, he shall deposit
the applicable duty, along with the redemption fine and penalty,
together with interest at the rate of 8% in terms of the Order-in-
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Original dated 18.11.2022. Upon receipt of the aforesaid amount, the
Respondents shall release the twelve (12) gold bars to the Petitioner.
ANIL KSHETARPAL, J.
VIMAL KUMAR YADAV, J.
SEPTEMBER 10, 2026
s.godara/shah
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NARAYAN
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