Delhi HC Declines Release of Seized Gold, Allows Saudi Arabia Returnee to File Appeal

The Delhi High Court has refused to order the release of a 100-gram gold bar seized by Customs officials at Indira Gandhi International Airport from Mohammad Afsar Khan, who was returning from Saudi Arabia to Delhi in June 2024.

While declining to interfere with the confiscation, the Court gave the petitioner limited relief by allowing him a final opportunity to challenge the order before the appellate authority.

A Division Bench of Justice Prathiba M. Singh and Justice Anish Dayal observed that since the Customs Department had already passed an Order-in-Original (OIO) confiscating the gold, the proper course for the petitioner was to pursue the appellate remedy under the Customs Act. “

The Petitioner is, however, free to challenge the Order-in-Original by way of an appeal,” the Bench said, adding that if such an appeal is filed by September 20, 2025, it shall not be dismissed as time-barred and must be adjudicated on merits. The Court also directed that any such appeal should be decided by November 30, 2025.

The case dates back to June 24, 2024, when Khan arrived in Delhi on flight XY-329 from Saudi Arabia carrying a 100-gram gold bar. According to him, he was approaching the red channel at IGI Airport to declare the gold and pay duty. Customs officials, however, detained the bar and issued a receipt. Khan maintained that he was willing to pay the customs duty, but the gold was seized.

Earlier this year, Khan had moved the High Court, contending that no Show Cause Notice (SCN) had been issued to him within the statutory six-month period prescribed under Section 110 of the Customs Act. 

On that hearing, held on May 29, 2025, the Court directed that the adjudicating authority should grant Khan a personal hearing and then pass an order in accordance with law, taking into account his willingness to pay customs duty. Pursuant to this direction, Khan was heard by the Customs authority, and it was thereafter that the Order-in-Original came to be passed.

In its Order-in-Original dated July 28, 2025, the Customs authority denied Khan the benefit of “free allowance,” declared him an “ineligible passenger,” ordered absolute confiscation of the gold bar valued at Rs 6.48 lakh, and imposed a penalty of Rs 20,000 under the Customs Act.

Khan’s counsel argued before the Court that the OIO did not take into consideration the spirit of its earlier directions. The Bench, however, held that the earlier order was limited to ensuring a hearing and that such a hearing had in fact been given

"In the earlier order dated 29th May, 2025, this Court has not gone into the merits of the matter and merely directed that, as the six months period to issue the show cause notice had lapsed, a personal hearing had to be given to the Petitioner. Accordingly, a personal hearing was afforded to the Petitioner and the Order-in-Orignal has now come to be passed," the Court said.

It further added, “Considering the nature of the gold item and the fact that the Order-in-Original is an appealable order, this Court is not inclined to entertain the present writ petition,” the Bench observed. 

With these directions, the Court disposed of the petition, leaving the question of confiscation to be examined by the appellate authority on the merits.

Case Title: Mohammad Afsar Khan v. Commissioner of Customs

Judgment Date: 2nd September, 2025

Bench: Justice Prathiba M. Singh and Justice Anish Dayal