Customs Seized Rs. 2.22 Crore Areca Nuts Without Documents; Gauhati High Court Upholds Action Based on ‘Reason to Believe’

The Kohima Bench of the Gauhati High Court upheld the seizure of areca nuts worth over Rs.43 lakh by Customs authorities, holding that the officers had valid “reason to believe” under Section 110 of the Customs Act, 1962 that the goods were liable to confiscation. Justice Pranjal Das dismissed the writ petition filed by Sarvadeva Vanijya Pvt. Ltd. seeking release of the seized goods but directed release of the seized vehicle to its owner on furnishing an appropriate bond and subject to verification.

The dispute arose after Customs officials intercepted a truck carrying areca nuts on 6 November 2025 and seized both the goods and the vehicle on suspicion that the goods were of foreign origin. The petitioner-company contended that the areca nuts had been procured from the local market in Hailakandi and were being transported to its own godown in Guwahati as a stock transfer. It argued that valid documents existed to support the movement of goods and that Customs authorities lacked jurisdiction to detain goods merely on alleged GST-related violations such as non-generation of an e-way bill.

Before the High Court, the petitioner submitted that the mandatory requirement of “reason to believe” under Section 110 was absent and that the seizure was based only on suspicion. It was further argued that no country of origin had been identified, no scientific examination of the goods had been conducted, and that Customs authorities could not invoke their powers for alleged breaches of GST provisions.

The Customs Department, however, maintained that no invoice, e-way bill, delivery challan or other supporting documents were produced at the time of interception. It further pointed out that the truck was carrying 33,600 kilograms of areca nuts packed in 480 bags, valued at approximately Rs.2.22 crore, and that the driver allegedly assaulted a customs official and fled from the spot during the interception.

“The satisfaction of the criteria of the ‘reason to believe’ for the purpose of Section 110 of the Act has to be seen in the circumstances prevailing at the time of the seizure and through the experienced eye of the Customs officer.”

The High Court observed that the legality of a seizure under Section 110 must be examined on the basis of materials available to the Customs officer at the time of seizure and not on the basis of documents produced subsequently. The Court noted that the absence of supporting documents during transportation, the large quantity and value of the goods, the conduct of the driver, and intelligence inputs relating to areca nut smuggling in the North-Eastern region constituted sufficient material for formation of a reasonable belief.

Referring to decisions of the Supreme Court on the scope of “reason to believe”, the Court held that once there exists relevant and germane material supporting the officer’s belief, the sufficiency of such material is not open to judicial review.

“The Customs officer had reasons to believe to exercise the powers under Section 110 of the Act in the instant case.”

Thus, the Court upheld the seizure of the areca nuts and declined to order their release. However, it clarified that if confiscation proceedings under Section 111 of the Customs Act are initiated, the petitioner would be entitled to notice and an opportunity of hearing under Section 124 and may produce all supporting documents to contest confiscation. The Court also directed release of the seized truck in favour of its owner, subject to verification and furnishing of a bond on conditions to be imposed by the Customs authorities.

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