On May 21, 2026, a landmark judicial ruling in New Delhi redefined the evidentiary standards for customs disputes in India, establishing that investigative statements cannot be admitted as evidence without first examining the statement-maker as a witness. The decision, delivered in the case of Purshottam Jajodia vs Principal Commissioner, Customs, curtails the ability of adjudicating authorities to rely solely on pre-trial confessions and statements recorded during search and seizure operations.
The Legal Context of Section 9D
To understand the significance of this ruling, one must look at the statutory framework governing customs investigations. Section 9D of the Customs Act, 1962, regulates the relevancy of statements made under certain circumstances during the course of an inquiry.
The statute divides these circumstances into two distinct categories. Clause (a) of Section 9D(1) applies when the person who made the statement is dead, untraceable, or incapable of giving evidence. In such rare instances, the statement can be admitted directly into the record to prevent a miscarriage of justice.
However, when none of those extreme circumstances exist, clause (b) of Section 9D(1) comes into operation. This clause prescribes a mandatory, two-step procedure that the adjudicating authority must follow before any prior statement can be admitted as valid evidence in a prosecution or adjudication proceeding.
The Two-Step Mandate Established by the Court
In the Purshottam Jajodia case, the adjudicating authority had bypassed these statutory requirements, relying heavily on written statements obtained during the initial investigation phase. The court clarified that such shortcuts violate the explicit procedural safeguards written into the law.
Under the mandated procedure, the adjudicating authority must first summon and examine the person who made the statement as a witness in the case. This examination must take place directly before the adjudicating officer, allowing the defense an opportunity to cross-examine the individual.
Only after this oral examination has occurred can the authority proceed to the second step. The adjudicating officer must then form a reasoned opinion that, having regard to the circumstances, the statement should be admitted in the interest of justice.
Expert Perspectives on Due Process
Legal experts argue that this decision restores the constitutional right to a fair trial and checks the power of revenue authorities. Historically, tax and customs departments have heavily relied on statements recorded under duress or during late-night interrogation sessions, which are often retracted later by the assessees.
“For years, adjudicating officers have treated investigative statements as gospel truth without subjecting them to the crucible of cross-examination,” said Priya Sharma, a senior tax litigator based in Mumbai. “This ruling forces the department to build robust, independent cases rather than relying on coerced confessions.”
Data from recent customs appeals indicates that over 65% of disputed customs valuations and smuggling cases rely primarily on statements recorded under Section 108 of the Customs Act. By enforcing the strict application of Section 9D(1)(b), the judiciary is raising the bar for what qualifies as admissible proof in tax tribunals.
Implications for Importers and Corporate Taxpayers
For corporate taxpayers and importers, this ruling provides a powerful shield against arbitrary tax demands. It ensures that any statement used against a company must be verified in an open forum where the veracity of the claims can be actively tested.
The decision is expected to lead to a temporary slowdown in the disposal of pending customs cases. Adjudicating officers will now have to schedule formal witness examinations, which will demand more administrative time and resources from the customs department.
Furthermore, this ruling will likely influence how other indirect tax tribunals, such as those governing the Goods and Services Tax (GST), interpret similar evidentiary provisions in their respective statutes.
What to Watch Next
Moving forward, legal analysts will be watching how the Central Board of Indirect Taxes and Customs (CBIC) responds to this judicial setback. The department may issue internal circulars to standardize the witness examination process or attempt to appeal the decision to a higher constitutional court.
In the coming months, defense counsels across India are expected to systematically challenge any pending adjudication orders that relied on unexamined statements. Businesses involved in active customs disputes should immediately review their case files to determine if the revenue department failed to comply with the newly reinforced two-step procedure of Section 9D.
