Stating that the act of disposing of 200 grams (gm) of 999 purity 24-karat gold bars by the Customs Department, seized from a passenger in 2021, was “suspicious and dubious”, the Gujarat High Court (HC) on Friday warned of “initiation of criminal or disciplinary proceedings” against the erring officers.
A Division Bench of Justice A S Supehia and Justice Pranav Trivedi, were hearing the petition of a man, challenging the November 2022 disposal of 200 grams of two gold bars of 24-karat gold 999 purity – then valued at around Rs 9.75 lakh, seized by the Customs Department from his person in October 2021, on his arrival in Ahmedabad from Abu Dhabi. The petitioner has contended that he should be compensated with either the current market value of the seized gold or equivalent gold of the same purity. Currently, the market price of 10 gm of 24kt gold is approximately Rs 1.5 lakh.
On Friday, the Customs Department submitted that the amount of Rs 9.22 lakh had been deposited before the Registry by the Assistant Commissioner, Customs, Paldi Division, Ahmedabad, and also submitted an additional affidavit in the matter, as per the directions of the court in an oral order dated January 30. The court directed the amount to be “disbursed to the petitioner” and clarified that the “actual value of gold, looking at the overall circumstances… will be decided later on…”
The HC noted three serious “illegalities” in the way the gold was disposed of and also rebuked the Customs department for filing “contrary statement” in the latest affidavit, regarding the contention of informing the petitioner about the disposal of the gold. The oral order of the court on Friday states, “…a categorical statement was made (by the Customs department on September 3, 2025) that under the said provisions, no notice is required to be sent in case of ‘confiscated goods’…After making such assertive statement in the affidavit, in another affidavit (dated February 5, 2026)averment is made that in fact, the petitioner was informed on January 18, 2022 for disposal of the seized gold under provisions of the Act… however, we do not find that such intimation has been received by the petitioner.”
The court also noted “three illegalities” including that the Customs issued a notice “ordering confiscation of the gold on November 30, 2022”, a day after the department “disposed of the gold by sending the same to the Mint on November 29, 2022”. The HC order also noted that the Customs “did not inform the appellate authority about disposal of the gold on November 29, 2022”, as the appellate authority set aside the confiscation order of November 30 of the Customs department on January 10, 2024, “as if the gold was still lying in the locker of the Customs authority.”
The HC, in its order also noted that the Customs department had “committed” illegality by following the erroneous clause of the Disposal Manual, 2019 as the gold seized from the petitioner was ‘Primary Gold’ and “indubitably” two bullion of 100 grams each, therefore, as per the manual the gold was “ripe for disposal” and ought to have been routed through Public Sector Banks for sale.
The HC also expressed dissatisfaction over the query about whether the Customs Department “tracked the gold, which is sent for disposal to the Mint” and stated that the action of disposing of the gold was found to be “suspicious and dubious”. Warning of initiation of criminal proceedings, the court order states, “It is difficult to comprehend that gold is sent for disposal one day prior to passing of the Order-in-Original for confiscation and it is not prescribed either in the statute nor in the Manual. Hence, this is fit case where the Court, while exercising its inherent power… can pass necessary direction of initiation of either criminal proceedings or disciplinary proceedings against the officers however, we would like to give one more chance to the officers, who are involved in disposal of the gold, to satisfy the court for not passing such directions.”
The HC will now hear the matter on February 11.
