The Bombay High Court quashed a 21-year-old adjudication process initiated by a show cause notice (SCN) issued in 2003 against M/s Esjaypee Impex Pvt. Ltd., citing inordinate and unexplained delays by the Revenue authorities. The Court ruled that such delays violated principles of natural justice and caused irretrievable prejudice to the petitioners.

1. Background of the Case:

• Petitioners challenged a show cause notice (SCN) dated 24.09.2003 and subsequent Personal Hearing (PH) Notice dated 19.06.2024.
• The SCN alleged undervaluation of imported cloves, demanding differential duty under Sections 111(d), 111(m), 112(a), and 114A of the Customs Act, 1962.
• A 2008 Tribunal order remanded the case for adjudication within six months, which remained unresolved for over 16 years.

2. Petitioners' Claims:

• Petitioners argued the adjudication was delayed by 24 years from import and 16 years post-remand, rendering the proceedings stale.
• Lack of documents and memory due to the time lapse caused irreparable harm.
• Petitioners were never informed about the SCN being kept in the "Call Book."

3. Respondents' Defense:

• Revenue attributed delays to procedural and jurisdictional changes, as well as the COVID-19 pandemic.
• They argued that the Petitioners failed to respond to the Tribunal's directive in 2008 to inspect documents and file a reply.

4. Court's Findings on Delay:

• The Court noted that delays of this magnitude breach Article 14 of the Constitution, which ensures fairness and non-arbitrariness.
• The Revenue failed to justify the delays or notify the Petitioners about the status of the SCN.

5. Violation of Natural Justice:

• The Court highlighted how the Petitioners suffered procedural unfairness due to prolonged inaction.
• The lack of timely adjudication rendered the SCN unenforceable and prejudicial.

6. Precedents and Principles Applied:

• Referred to Coventry Estates Pvt. Ltd. v. Joint Commissioner of CGST and other cases emphasizing the need for timely adjudication to uphold fairness and natural justice.
• The Court rejected the argument that the COVID-19 timeline excused the delays, as the SCN had already been stagnant for over a decade.

7. Final Decision:

• The SCN and PH Notice were quashed as time-barred, and the Respondents were restrained from proceeding further.

Acts and Sections Discussed:

1. Customs Act, 1962:

   • Section 111(d) & 111(m): Confiscation of improperly declared goods.
   • Section 112(a): Penalty for improper importation.
   • Section 114A: Penalty for evasion of duty.

2. Article 14 of the Constitution of India:

   • Ensures fairness and non-arbitrariness in administrative actions.

Ratio of the Judgment:

An inordinate and unexplained delay in adjudication renders the proceedings arbitrary and violative of natural justice. The right to a fair trial includes a right to timely adjudication. Administrative lethargy cannot be allowed to prejudice the rights of individuals.

Subjects:

Customs Law, Natural Justice, Administrative Delays.

#CustomsLaw #NaturalJustice #JudicialDelay #Article14