Karnataka High Court upholds COFEPOSA detention for misdeclaring value of goods for fraudulent tax refund

The Karnataka High Court has dismissed a plea seeking quashing of a detention order of a person resulting from misdeclaring the description and value of goods for export to fraudulently claim duty drawback and IGST refund benefits [Asses Punjee Kaur Kochhar vs Union of India].

The plea heard by Justices Alok Aradhe and Anant Ramanath Hegde was filed by the sister of the detenue, seeking the quashment of a detention order passed under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act (COFEPOSA).

The detenue was an exporter of 'Indian Hand Knotted Silk Carpets’ whose detention order was passed on February 23, 2021 and served to him on July 3.

The detenue earlier made a representation before an advisory board, where it was found that the order of the detaining authority was sound. The Central government confirmed this order.

The order of the Centre was challenged in the instant appeal where each issues raised by the petitioner were dealt with in detail.

The petitioner argued that the detaining authority had used the disjunctive “or” instead of “and”, thus making it clear that the authority itself was unsure of the category under which the detention had taken place. Therefore, the order suffered from a non-application of mind.

The Bench did not find merit in this argument, stating that the order as well as the grounds of detention were issued by the authority after recording subjective satisfaction as elaborated in the grounds. Thus, the order did not suffer from any non-application of mind.

It was brought to the Court’s attention that the detenue was not allowed any representation before the advisory board, and thus the detention was vitiated in law.

In response to this submission, the respondents stated that they were not represented through an advocate either therefore, the detenue could not seek representation. Additionally, in view of the bar under Section 8(e) of the Act, the detenue was not entitled to representation through an advocate.

The Division Bench was in agreement with this argument, stating that the validity of an analogous provision namely Section 9 of the National Security Act, which provides that a detenue had no right of representation by a legal practitioner, was upheld by the Supreme Court in A.K. Roy vs. Union of India.

“The Board rejected the request to be represented through a legal advisor on the ground that detaining authority is also not represented by a legal practitioner. However, the detenue was permitted to take assistance of any person who is not a legal practitioner,” the Court noted.

Therefore, it was concluded that the order of detention was not vitiated on the ground that the detenue was denied legal representation.

Another contention of the petitioner was that certain documents that were in Kannada and Marathi and relied upon by the detaining authority, were not supplied to him.

The respondents clarified that the English translation of the documents was available and no prejudice was caused to the detenue.

In light of the specific facts of the case, the Court observed that the gist of the documents had already been provided to the detenue, therefore, a non-supply of documents did not impact the order’s legality.

It was submitted that there was a delay in serving the detention order, thus the provisions of the Act had not been complied with. To this, the respondents argued that the order was not served on the detenue as he was absconding.

“After passing the order of detention, steps were taken to apprehend the detenue from March 2021 onwards and steps were taken to publish the Notification under Section 7 of the Act,” it was submitted.

The Court examined the timeline of events before concluding that there was no delay in serving the order as the same had been explained by the authority.

After answering each specific point of law and fact raised by the petitioner, the Division Bench concluded that there was no ground to interfere in the order of detention, especially considering that the detenue has the propensity and potentiality to engage in offences.

Advocates Kiran S Javali, Abdul Nabi and Aisha Z Ansar appeared for the petitioner. The respondent was represented by Senior Central Government Standing Counsel Madhukal Deshpande.

[Read Order]