902-wp 449-26.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 449 OF 2026 M/s. Sky Touch Aviation Pvt. Ltd. 306, Rangoli Building, Near Air Cargo Complex, Sahar, Mumbai – 400 009. …Petitioner Versus 1. 2. Union of India Through its Joint Secretary, Ministry of Finance, Department of Revenue, North Block, New Delhi – 110 001. Commissioner of Customs-IV (Export), Air Cargo Complex, Sahar, Andheri (E), Mumbai – 400 099. .. . Respondents WITH WRIT PETITION NO. 539 OF 2026 Adesh V. Saple Age-38 years, Occ.-Business, Director, M/s. Sky Touch Aviation Pvt. Ltd. 306, Rangoli Building, Near Air Cargo Complex, Sahar, Mumbai – 400 009. …Petitioner Versus 1. 2. Union of India Through its Joint Secretary, Ministry of Finance, Department of Revenue, North Block, New Delhi – 110 001. Commissioner of Customs-IV (Export), Air Cargo Complex, Sahar, Andheri (E), Mumbai – 400 099. .. . Respondents Amk 1/8 ARJUN MACHHINDRA KADAM Digitally signed by ARJUN MACHHINDRA KADAM Date: 2026.08.29 17:37:11 +0530 902-wp 449-26.doc __________________________ Mr. Ashok Singh for the Petitioners. Mr. Karan Adik a/w. Ms. Mamta Omle for the Respondents in WP 539/26. Mr. Ram Ochani a/w. Ms. Sangeeta Yadav for the Respondents in WP 449/26. __________________________ CORAM : M. S. KARNIK AND SANDESH D. PATIL, JJ. DATED : 28 th AUGUST, 2026. ORDER (PER M. S. KARNIK, J.) 1. The petitions are disposed of by a common order as common issues are involved. The petitioner in Writ Petition No. 449 of 2026 is a company of which the petitioner in Writ Petition No. 539 of 2026 is the director. In respect of the same transaction, the bank accounts of the petitioners are debit freezed. The personal account of the petitioner-Adesh V. Saple in Writ Petition No. 539 of 2026 was debit freezed sometime in 2020 whereas the account of the petitioner- company in Writ Petition No. 449 of 2026 was debit freezed on 26th May, 2020. 2. We refer to the facts in Writ Petition No. 449 of 2026 for convenience. By this petition filed under Article 226 of the Constitution of India, the petitioner seeks a direction to respondent Amk 2/8 902-wp 449-26.doc Nos.1 and 2 to defreeze the petitioner’s bank account maintained with Kotak Mahindra Bank, Mumbai. 3. Facts briefly stated are as follows:- Respondent No.2-Commissioner of Customs had initiated an investigation into alleged over-valuation/mis-declaration by a third party- M/s. Prince Enterprises, in respect of export of Men’s Trousers of Cotton MMF and Handwork Embroidered Dress Patterns of MMFs, undertaken with a view to avail ineligible drawback, Integrated Goods and Services Tax (‘IGST’ for short) and Rebate of State and Central Taxes and Levies (‘ROSCTL’ for short). In the course of said investigation, the petitioner’s bank account came to be placed under debit freeze on 26th May, 2020. 4. Pursuant to the investigation, respondent No.2 issued a show cause notice dated 25th March, 2021 proposing rejection and redetermination of export value and demand of various benefits availed, together with proposed penalty against M/s. Prince Enterprises as well as the petitioner. The petitioner filed reply to the show cause notice on 30th November, 2021. The show cause notice came to be adjudicated in the Order-in-Original dated 29th December, 2021 confirming penalty against the petitioner and various demands Amk 3/8 902-wp 449-26.doc against M/s. Prince Enterprises. 5. The petitioner thereafter preferred the appeal against the said Order-in-Original before the Customs, Excise and Service Tax Appellate Tribunal (‘CESTAT’ for short) upon making the statutory pre-deposit of 7.5% in terms fo Section 129E of the Customs Act, 1962. The petitioner says that the said appeal is pending. The petitioner also says that it had approached the CESTAT by way of an application for defreezing of the account, which came to be rejected on the ground that the Tribunal did not have jurisdiction to entertain the same. 6. It is the petitioner’s case that despite conclusion of the investigation, issuance and adjudication of the show cause notice, now that even an appeal has been filed along with payment of the statutory pre-deposit, respondent No.2 has failed and neglected to defreeze the said bank account. The petitioner addressed representations dated 2nd March, 2021 and 27th July, 2021 and a further representation dated 31st October, 2023 to respondent No.2, requesting defreezing of the account on the ground that the continued freeze was hampering the day-to-day operation of its business. The representations are not responded by the respondents. Amk 4/8 902-wp 449-26.doc 7. Learned counsel for the petitioner submitted that the credit balance presently lying in the said account is Rs.9,07,214/-, of which all but Rs.25,573/- was received after the account came to be frozen on 26th May, 2020 and represents, inter alia, an Income Tax refund of Rs.6,06,150/- credited on 27th May, 2020 and freight booking receipts from the petitioner’s clients aggregating Rs.2,75,491/-, received between May, 2020 and May, 2021 in the ordinary course of the petitioner’s business. 8. It is the submissions of learned counsel for the petitioner that once the investigation has concluded and even the show cause notice has been adjudicated, there is no justification for the respondents to continue the debit freeze over the petitioner’s account. It is submitted that the continued freeze, without any order of extension or justification, and without response to the petitioner’s repeated representations, is arbitrary, contrary to the scheme of the Customs Act, 1962, and violative of the petitioner’s rights under Article 19(1) (g) of the Constitution of India. 9. We have heard learned counsel for the petitioner. Learned counsel for the respondents argued in support of the debit freeze. It is submitted that the facts of the present case do not justify Amk 5/8 902-wp 449-26.doc defreezing of the account. 10. In the present case, there is no dispute that the account of the petitioner was placed under debit freeze on 26th May, 2020. This was in view of the investigation that was pending. During any proceedings under the Act, the power to debit freeze is provided in Section 110 (5) of the Customs Act, 1962, which reads thus:- 110(5). Where the proper officer, during any proceedings under the Act, is of the opinion that for the purposes of protecting the interest of revenue or preventing smuggling, it is necessary so to do, he may, with the approval of the Principal Commissioner of Customs or Commissioner of Customs, by order in writing provisionally attach any bank account for a period not exceeding six months. PROVIDED that the Principal Commissioner of Customs or Commissioner of Customs may, for reasons to be recorded in writing, extend such period to a further period not exceeding six months and inform such extension of time to the person whose bank account is provisionally attached, before the expiry of the period so specified. 11. In the present case, it is pertinent to note that the debit freeze was on account of an on going investigation. The investigation is Amk 6/8 902-wp 449-26.doc over, culminating into issuance of show cause notice dated 23rd March, 2021. The show cause notice has been adjudicated. An appeal has been filed against the Order-in-Original dated 29th December, 2021 by the petitioner. The mandatory pre-deposit of 7.5% has been made. Section 110(5) of the Customs Act provides the provisional attachment of the bank account for a period not exceeding of six months by the proper officer with the approval of Principal Commissioner of Customs or Commissioner of Customs. The proviso to Section 110(5) says that this period can be extended to a further period not exceeding six months for the reasons to be recorded in writing. 12. Looked at from any angle, it is clear that so far as the petitioner is concerned, the period of one year from the debit freeze of the bank account of the petitioner is already over. In such view of the matter, the continuation of the debit freeze is impermissible. There is nothing on record nor any provision of law is placed for our consideration justifying the continuance after the period of one year since the debit freeze is over or upon the conclusion of the investigation. On this ground itself, the petition deserves to be allowed. Amk 7/8 902-wp 449-26.doc 13. In any case, the petitioner having filed an appeal against the Order-in-Original where the amount of 7.5% pre-deposit has been paid, continuance of the debit freeze in such circumstances would be coercive in nature not having the sanction of law. The Writ Petitions are therefore allowed in terms of prayer clause (a). 14. The petition is disposed of. No costs. (SANDESH D. PATIL, J.) (M. S. KARNIK, J.) Amk 8/8