Sanjay Agarwal vs Union Of India Through Commissioner (Legal), CBIC & Ors.

Headnote AI-drafted · Reviewed and approved

The Petitioner, a private individual, filed a Writ Petition before the Bombay High Court seeking directions in the nature of mandamus against the Union of India and its revenue intelligence authorities to investigate alleged massive undervaluation and mis-declaration of material particulars by luxury car importers — Mercedes-Benz India Pvt. Ltd., Skoda Auto Volkswagen India Pvt. Ltd., and BMW India Pvt. Ltd. — in their imports from related foreign parent/group companies, thereby allegedly evading customs duty in violation of the Customs Act, 1962. The Petitioner had earlier approached the Supreme Court by way of a writ petition (WP (CRL) No.20 of 2016), whereupon the Apex Court directed him to file relevant documents before the Additional Director, DRI, Mumbai, with a direction that if the authority found the information credible, it should take appropriate action in law. Despite compliance by the Petitioner in September 2016, he alleged continued inaction by the authorities, leading to the filing of the present Writ Petition.

The Petitioner further sought a declaration that the Special Valuation Branch (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, having been secured by material suppression, fraud, and misrepresentation, are nullities, void ab initio, and non-est in the eyes of law, relying on the ratio in A.V. Papayya Sastry v. Government of A.P., (2007) 4 SCC 221. The Petitioner also sought inquiry into the alleged inaction of concerned officers causing huge revenue loss to the exchequer.

The Supreme Court, by its order dated 29th March 2023, held that the Petitioner had locus standi to maintain the petition and directed the Bombay High Court to proceed to decide the Writ Petition on its merits without re-examining the question of locus. In compliance with that direction, the Division Bench of the Bombay High Court proceeded to hear the Petition on merits. The judgment as extracted covers the background, reliefs claimed, and the procedural history up to the stage of hearing.

Catchwords: Customs duty · undervaluation · mis-declaration · luxury car imports · related party transactions · Special Valuation Branch · SVB orders · Directorate of Revenue Intelligence · mandamus · writ jurisdiction · locus standi · fraud · void ab initio · Customs Act 1962 · revenue loss · investigative inaction