Sanjay Agarwal vs The Union Of India And Ors

Headnote AI-drafted · Reviewed and approved

The petitioner, a private individual, filed a writ petition before the Bombay High Court seeking mandamus directing customs authorities to investigate alleged massive undervaluation and mis-declaration of material particulars in the import of luxury cars by private respondents (Mercedes-Benz, Skoda Auto Volkswagen, and BMW India), purportedly resulting in large-scale evasion of customs duty. The petitioner had earlier approached the Supreme Court in WP (Crl.) No. 20 of 2016, pursuant to which the apex court in July 2016 directed the petitioner to submit relevant documents before the Additional Director, Directorate of Revenue Intelligence, Mumbai, with a further direction that appropriate action be taken if the information was found credible. Despite compliance, the petitioner alleged continued inaction by the authorities.

The Supreme Court, vide order dated 29th March 2023, held that the petitioner had locus standi and directed the Bombay High Court to consider and decide the writ petition on its merits without entering into the question of locus. The petitioner sought declarations that SVB orders and orders of assessment and clearance of goods for home consumption obtained by the private respondents under Sections 17, 18(2) and 47 of the Customs Act, 1962 were obtained by material suppression, fraud and misrepresentation, and were therefore void ab initio, relying on A.V. Papayya Sastry v. Government of A.P., (2007) 4 SCC 22.

The High Court, comprising Nitin Jamdar and Abhay Ahuja JJ., proceeded to hear the writ petition on merits in accordance with the Supreme Court's direction, examining questions relating to the role of Special Valuation Branch, customs duty valuation of related-party imports, and the alleged inaction of revenue authorities in pursuing what the petitioner characterised as credible information of large-scale customs duty evasion in the luxury car import segment.

Catchwords: Customs duty evasion · luxury car imports · undervaluation · mis-declaration · related party transactions · Special Valuation Branch · mandamus · Directorate of Revenue Intelligence · locus standi · void ab initio · SVB orders · Customs Act 1962 · home consumption clearance · writ jurisdiction