S.28 Customs Act | Keeping Matter In Call Book, Taking It Up After Several Years Is Not Permissible: Delhi HC Quashes SCN
The Delhi High Court has cautioned the Customs Authorities against keeping show-cause notices pending in call-book only to take them up after several years, leaving the assessee in lurch. A division bench of Justices Prathiba M. Singh and Amit Sharma observed that in the absence of any “glaring impossibility”, such an approach of the authorities would not be permissible. In the...
The Delhi High Court has cautioned the Customs Authorities against keeping show-cause notices pending in call-book only to take them up after several years, leaving the assessee in lurch.
A division bench of Justices Prathiba M. Singh and Amit Sharma observed that in the absence of any “glaring impossibility”, such an approach of the authorities would not be permissible.
In the case at hand, Petitioner challenged the delay of almost eight years in adjudication of the show-cause notice issued to it in 2015.
It submitted that under Section 28(9) of the Customs Act, 1962 (hereinafter, '1962 Act') there is a specific time-period fixed of six months and a maximum period of one year, for the purpose of adjudication of show-cause notices and determination of amount of duty or interest.
It was contended that the phrase “where it is possible to do so” as contained in Section 28(9) of the Act was omitted pursuant to an amendment and post the omission, the window which existed for delay in adjudication after the issuance of show cause notice does not exist.
The Department on the other hand submitted that the delay in adjudication was initially due to the decision in Mangli Impex Ltd. v. Union of India & Ors. (2016) where the Delhi High Court had questioned the power of DRI officers to exercise functions under the Customs Act or to issue show-cause notices and recover duties.
It further submitted that the matter was put in the call book due to some issues between the DRI and the Customs Department as to who would be the proper officer to adjudicate the show-cause notice.
At the outset, the High Court noted that the matter was retrieved from the call book on 2nd February, 2017 but, no reason was forthcoming for not adjudicating the SCN between 2017 till 2023. It said,
“In the opinion of this Court, there existed no reason for the non-adjudication of the show-cause notice and therefore this Court is of the opinion that the facts do not reveal any glaring impossibility for the Customs Department to deal with the show-cause notice.”
The Court cited Swatch Group India Pvt. Ltd. v. Union of India & Ors. (2023) where the Supreme Court had frowned upon the “indifference" of the concerned officers in completing adjudication within the time period as mandated.
It also referred to Vos Technologies India Pvt. Ltd. v. The Principal Additional Director General & Anr. (2024) where the Delhi High Court had held that a statute enabling an authority to conclude proceedings within a stipulated period of time “where it is possible to do so” cannot be countenanced as a license to keep matters unresolved for years.
Accordingly, it quashed the SCN and allowed the petition.
Appearance: Mr. Shubhankar Jha, Advocate for Petitioner; Mr. Harpreet Singh, Sr. Standing Counsel along with Ms. Sonakshi Monga, Mr. Tanishq Mehta, Ms. Gusheen Kaur, Ms. Chayya Khosla and Mr. Sanjam Chaba, Advocates. Ms. Nidhi Banga, Senior Panel Counsel with Mr. Nishant Kumar, Advocate for Respondent No.4.
Case title: Shri Balaji Enterprises v. Additional Director General New Delhi & Ors.
Case no.: W.P.(C) 11207/2023