Kerala High Court Quashes 25 kg Gold Confiscation, Holds Denial Of Cross-Examination Vitiates Proceedings

The Kerala High Court on 3 March quashed a customs confiscation order involving 25 kilograms of gold, holding that denying the petitioners an effective opportunity to adduce evidence and cross-examine witnesses caused prejudice and violated principles of natural justice.

Justice Ziyad Rahman A A, sitting as a Single-Judge Bench, allowed writ petitions challenging the Order-in-Original passed by the Customs authority, which had confiscated the gold and imposed penalties. He observed:

“The denial of opportunity caused prejudice to the petitioners” and the proceedings “cannot be treated as the proper compliance of the principles of natural justice.”

Customs authorities seized the gold from passengers at Thiruvananthapuram International Airport, alleging illegal import and evasion of declaration requirements under the Customs Act.

Petitioners argued that authorities intercepted them before they reached the customs checkpoint, depriving them of the statutory chance to declare the gold. They presented CCTV footage and statements from parallel proceedings to support an alternate version of events.

The Court found that the record showed the possibility of “two diametrically opposite versions”—one in the show cause notice and another emerging from CCTV footage and statements. Despite this, the adjudicating authority relied only on departmental statements, refused to let the petitioners examine certain witnesses, barred the use of CCTV footage during examination, and restricted relevant lines of questioning.

The Bench clarified that even when a statute does not expressly allow cross-examination, authorities must apply principles of natural justice in proceedings with civil consequences, particularly when prejudice exists.

Applying the “test of prejudice”, the Court concluded that denying the petitioners the opportunity to present evidence and challenge the prosecution materially affected their defense, especially since Customs law places the burden of proof on them.

The Court further noted that the adjudicating authority ignored the alternate version of events and failed to provide a meaningful hearing after cross-examination, undermining fairness in decision-making.

Accordingly, the High Court directed fresh adjudication and set aside the confiscation order.