The Bombay High Court quashed a 2008 show cause notice issued under the Customs Act, 1962, against the Petitioner, citing an inordinate, unexplained delay of 15 years in adjudication. The Court relied on past judgments to conclude that such a delay inherently prejudices the party involved and cannot be justified without reasonable explanation. This judgment reinforces procedural diligence and timeliness in adjudication under Customs laws.

1. Parties and Representation

   • Counsel for both parties were heard, and the Rule was made returnable immediately with mutual consent.

2. Challenge to Show Cause Notice

   • The Petition contested a show cause notice issued on May 16, 2008, pending adjudication for 15 years, for penalties under Section 112(a) of the Customs Act, 1962.

3. Details of Allegations

   • The notice alleged that the Petitioner failed to pay appropriate duty on 663 import assignments, which were cleared clandestinely.

4. Petitioner's Responses

   • Detailed responses to the show cause notice were submitted by the Petitioner on October 1 and December 2, 2008.

5. Initial Hearing Dates

   • Hearings were scheduled in December 2008, but no effective hearings took place, resulting in a lack of progress until 2011.

6. Subsequent Hearing Attempts

   • In December 2011 and February 2017, hearings were rescheduled, but no conclusive adjudication occurred despite the Petitioner’s attendance.

7. Video Conferencing Request

   • In 2021, the Petitioner requested a video hearing due to prolonged delays, but no link was provided.

8. Failure to Justify Delay

   • Citing multiple cases, the Petitioner argued for quashing the notice due to procedural delays. Respondents failed to provide a sufficient explanation for the prolonged inaction.

9. Transfer to Call Book

   • Respondents mentioned transferring the notice to the "call book" in 2021 but lacked documented proof or notification to the Petitioner.

10. Precedent Cases Cited

• The Court referenced cases with similar delays, such as Coventry Estates Pvt Ltd and Eastern Agencies Aromatics (P) Ltd, concluding that such show cause notices should be quashed.

11. Reliance on Supreme Court’s Order

• The Respondent’s counsel referenced a 2023 Supreme Court order to support proceeding with adjudication. However, the Court held that this order was not applicable to justify the delays in this case.

12. Lack of Justifiable Explanation

• The Court emphasized that the Respondents failed to explain the delay from 2008 to 2021, affirming that unexplained delays inherently prejudice the Petitioner.

13. Duty to Inform of Call Book Transfer

• Citing other judgments, the Court highlighted that Respondents had a duty to inform the Petitioner about the transfer of the case to the call book.

14. Prejudice Inherent in Delays

• The Court stated that such prolonged delays naturally prejudice the Petitioner, making it unreasonable to expect them to contest the 2008 notice fairly.

15. Decision

• The Court quashed the show cause notice, preventing further proceedings and confirming that significant, unexplained delays warrant quashing to avoid prejudicial impact on the petitioner.

16. Order Conclusion

• The Rule was made absolute, quashing the notice without any cost orders.

Acts and Sections Discussed:

• Customs Act, 1962
  • Section 112(a): Relating to penalties for improper duty evasion.
  • Section 28(9): Requires adjudication of cases within a stipulated period unless proper notification is given.

Ratio Decidendi:

Unexplained delays in adjudication of show cause notices under the Customs Act, 1962, especially when extending over a decade, are inherently prejudicial to the party involved. The absence of timely notification about procedural actions, such as transfer to the call book, further substantiates the need to quash proceedings to uphold procedural fairness and prevent undue prejudice.

Subjects:

• Customs Law
• Show Cause Notice
• Delay in Adjudication
• Section 112(a), Customs Act
• Legal Prejudice due to Delay