• Dated 24^th December, 2025

CUSTOMS CANNOT RELY ON DEFECTIVE SAMPLING: GUJARAT HIGH COURT REAFFIRMS MANDATORY PROCEDURE UNDER SECTION 144

Brief Facts of the Case

The assessee imported distillate fuel oil under a Bill of Entry filed at Hazira Customs. Custom authorities initially drew a sample of the imported goods and sent it to the CRCL, Vadodara, which reported that the goods conformed to the declared specifications. Subsequently, the Directorate of Revenue Intelligence (DRI) drew another sample from the same consignment and sent it to the Visakhapatnam laboratory, which issued an adverse report. Based on the second test report, the DRI seized the goods. Notably, the importer/owner was not present during the drawing of both samples.

Assessee 's Contention

The assessee contended that the entire action of the department stood vitiated due to non-compliance with Section 144 of the Customs Act, 1962, which mandates that samples must be drawn in the presence of the owner of the goods. It was argued that, since the sampling procedure itself was unlawful, neither the initial test report nor the subsequent test report could be validly relied upon for the purpose of seizure of the goods.

The assessee further submitted that the department had acted arbitrarily in discarding the Customs laboratory test report solely because it was favourable to the assessee, while at the same time placing reliance on the DRI test report, which was obtained through an equally flawed and non-compliant sampling process. Such selective reliance, it was contended, was legally impermissible and rendered the entire proceedings unsustainable.

Department's Contention

The department submitted that the sample initially drawn by Customs at Hazira could not be treated as authentic as it was not drawn by the proper officer. It was contended that, based on intelligence inputs, the DRI was justified in drawing a fresh sample in the presence of panch witnesses and relying on the adverse laboratory report for initiating seizure proceedings. The department sought to justify the seizure of goods on the basis of the DRI test report.

Court's Decision

The Gujarat High Court held that Section 144 of the Customs Act, 1962 mandates sampling strictly in the presence of the owner, and the statute does not recognise sampling in the presence of panch witnesses as a valid substitute. The Court observed that both samples were drawn in violation of Section 144, rendering them legally unreliable. It was further held that the department could not approbate and reprobate by rejecting the Customs sample as unauthentic while accepting the DRI sample obtained through an equally defective process. Consequently, the seizure of goods was declared illegal, and the authorities were directed to release the goods forthwith. The petition was allowed in favour of the assessee.

BTA's Comment

This judgment reinforces the principle that procedural safeguards under the Customs Act, 1962 are mandatory and not directory. Even where intelligence inputs exist, statutory requirements such as sampling in the presence of the owner cannot be bypassed. The ruling is significant in cases involving conflicting laboratory reports, as it clarifies that evidence obtained through a process violating Section 144 cannot be relied upon for seizure or adverse action. The decision serves as a strong precedent against arbitrary sampling and selective reliance on test reports by Customs and DRI authorities.

Case Reference: Arihant Agro Distillation and Liquid Terminals Ltd. vs Union of India (2025) Decided by the High Court of Gujarat at Ahmedabad on 09.12.2025

Author: Anirudh Gupta

Edited by: Sneha Nandi