Proper Officer Must Provide 'Reason To Doubt' Value Of Goods Declared By Importer Before Initiating Reassessment U/S 17 Customs Act: Delhi HC

The Delhi High Court has held that the proper officer under the Customs Act, 1962 must provide “reasons to doubt” the declared value of imported goods, before proceeding with reassessment under Section 17. The High Court said that it is manifest from Section 17 that before the proper officer commences the process of reassessment, it must come to form an opinion on the basis of verification and examination of goods that the self-assessed declarations submitted by the importer are incorrect. It provides that an exercise of reassessment would be predicated upon the proper officer having “reasonable doubt” as to truthfulness of the value declared in relation to the imported goods. What we seek to emphasise is that it is the formation of this opinion that forms the bedrock for the proper officer treading down the path constructed by Section 17 of the Act.” Court said both Section 17 as well as Rule 12 have to be interpreted as “mandatorily” requiring the proper officer to provide “reason to doubt” and if construed in any other manner, it would lead to “arbitrary consequences” since it could result in the proper officer not even documenting the grounds on which it came to doubt the declared value in the first instance.