Bombay High Court Condemns DRI Officer’s Post-Clearance Retrieval Of Imported Goods Without Legal Authority

“Colour of Office Cannot Replace Colour of Law”:  In a significant ruling on 8 October 2025, the Bombay High Court strongly condemned the actions of a Directorate of Revenue Intelligence (DRI) officer who, without initiating any lawful proceeding, retrieved lawfully cleared imported goods — 56 tons of dry dates — purely on the basis of an alleged intelligence input. The Court held that once a proper officer passes an Out of Charge order under Section 47 of the Customs Act, 1962, that clearance acquires legal finality and cannot be undone arbitrarily or on mere suspicion without following due process under the Act.

Justice M.S. Sonak, writing for the Bench also comprising Justice Advait M. Sethna, made it clear that “even assuming there was no mala fide,” the conduct of the DRI officer violated legal procedure, natural justice and the rule of law.

“The sixth respondent completely ignored the statutory clearance order, and exercised powers that, prima facie, did not authorise him to act in the manner in which he did,” the Court held, while granting limited relief to the petitioner with a warning to the Customs authorities to either follow the law or release the goods.

“DRI Officer Cannot Override Section 47 Clearance With Telephonic ‘Requests’”: Court Calls Action Arbitrary and Highhanded

The case arose from a writ petition filed by Make India Impex, whose dry date consignment had been duly cleared by the Customs authorities on 24 July 2025 after full examination, including NOCs from FSSAI and the Ministry of Agriculture. The Out of Charge (OOC) order was passed under Section 47 of the Customs Act, and the Gate Pass was issued. The goods physically left the Customs-controlled CFS the same evening.

However, the next day, Respondent No. 6, a DRI officer (Mr. Sumit Kataria), allegedly acting on telephonic intelligence that the dates originated from Pakistan and were routed via Dubai to circumvent the DGFT Notification No. 06/2025-26 dated 2 May 2025, contacted the Customs Broker and Transporter and compelled them to bring the already-cleared goods back into the CFS. This was done without issuing any show cause notice, without recording any reasons, and without invoking any legal provision, except vague references to Section 106 of the Customs Act.

Rejecting the justification, the Court held:
“It is hard to believe that the goods were returned to the CFS solely based on a ‘request’. The record reveals that the goods were brought back under force and compulsion… this divesting was not shown to be backed by any law or legal procedures.”

“Section 106 Is Not a Licence for Lawless Action”: DRI's Reliance on Search Powers Rejected

The DRI sought to defend its actions by invoking Section 106, which grants powers to stop and search conveyances in smuggling-related cases. The Court dissected this argument and categorically rejected it:

“The actions of the sixth Respondent do not fall within the scope of Section 106… The goods had already been cleared… The section requires the ‘reason to believe’ that must be recorded in some form—an order, file noting, or contemporaneous record. None was shown here.”

The Bench also rejected the argument that “intelligence” automatically amounts to “reason to believe,” stating that judicial review cannot be defeated by such casual invocation.

The Court pointed out that despite several inquiries, the State could not produce any pre-existing note or order reflecting the alleged intelligence or belief. Instead, the only material presented was an email sent after the retrieval, requesting the CFS to “hold” the goods. This, the Court ruled, “cannot constitute the ‘reason to believe’ required under law.”

“Natural Justice Is Not an Empty Ritual”: Divestment of Lawfully Cleared Goods Held To Be Illegal

The Court stressed that even if the goods were suspected to be of prohibited origin, the law required the DRI to initiate proceedings under Section 124 by issuing a show cause notice, giving the importer an opportunity to respond. Instead, the DRI chose to act through informal channels, effectively undoing a statutory clearance.

“There was no minimum compliance with the principles of natural justice and fair play,” the Court said, warning that administrative authority under the Customs Act must not be used to override statutory safeguards.

Importantly, the Court noted that the Customs Officer who had granted clearance was alive to the origin concerns, as the Examination Order itself explicitly directed verification of whether the goods were of Pakistani origin. The goods were released only after seven days of scrutiny and clearance by multiple authorities, including the Phytosanitary Certificate, FSSAI, and DGFT.

“Court Will Not Enter Factual Disputes on Origin — But Rule of Law Must Prevail”

The DRI claimed that documents from UAE authorities allegedly indicated Pakistani origin. The petitioner countered with a full set of tracking and origin certificates issued by Dubai authorities, all of which were part of the Customs record before clearance. The Court refused to adjudicate the origin issue under Article 226, noting:

“We are not concerned with whether the goods were of Pakistani origin. We are concerned with whether the proper procedure was followed… Such disputed factual issues must be determined by the Customs authorities under law—not by coercive retrieval based on suspicion.”

“Judicial Discretion Cannot Be Displaced By Bureaucratic Conviction”: Conditional Relief Granted With Time-Bound Directions

While the Court held the DRI’s action “unsupported by any statutory provision”, it refrained from directing the immediate release of the goods. Instead, to balance equities and in view of the intelligence claim, the Court granted Customs a final opportunity to issue a show cause notice within four weeks and complete adjudication within six weeks of reply.

If not, the Court ordered that: “The goods shall be released upon the petitioner furnishing a bank guarantee equivalent to the redemption fine.”

It also observed: “Though we do not approve of the actions of the sixth Respondent, still, considering that we are exercising our jurisdiction under Article 226 of the Constitution of India, we grant the Respondents an opportunity to issue the Petitioner a show cause notice…”

In doing so, the Court sent a strong message — procedural safeguards and statutory remedies cannot be bypassed even in the name of intelligence or enforcement. The rule of law must operate before, during, and after clearance, and public officials must remain within the four corners of law, not coerce private parties with the shield of office.

The Bombay High Court’s judgment in Make India Impex stands as a powerful affirmation of statutory finality, natural justice, and constitutional discipline in administrative law. The ruling makes it clear that clearance under Section 47 is not a temporary checkpoint to be reversed at whim, and that DRI or Customs intelligence units are not above procedural accountability.

“There is a legal process to challenge or revise a clearance. Phone calls and pressure tactics are not that process,” the Court effectively declared, warning that actions cloaked in “colour of office” but lacking legal authority will not withstand judicial scrutiny.

This decision will likely become a crucial precedent in Customs enforcement cases, especially involving post-clearance disputes, country-of-origin verification, and the limits of DRI powers.

Date of Decision: 08 October 2025