Case Note & Summary
The petitioners, M/s. Esjaypee Impex Pvt. Ltd. and its Managing Director, challenged a show cause notice dated 24.09.2003 and a personal hearing notice dated 19.06.2024 issued under the Customs Act, 1962. The Directorate of Revenue Intelligence had alleged undervaluation of imported cloves. After investigation, a show cause notice was issued proposing rejection of declared value, confiscation under Sections 111(d) and 111(m), and demand of differential duty and penalty under Sections 112(a) and 114A. The Commissioner of Customs passed an Order-in-Original on 30.11.2007, which was set aside by the Customs Excise and Service Tax Appellate Tribunal on 10.09.2008 on the ground of violation of natural justice, with a direction to adjudicate within six months. The respondent failed to comply for over 16 years, and only in 2024 issued a personal hearing notice. The petitioners argued that the inordinate delay caused prejudice, as documents were lost and the matter became stale. The respondents contended that the petitioners did not file a reply to the show cause notice and that the delay was not fatal. The court, after considering the submissions, held that the delay of over 16 years in adjudication was unexplained and inordinate, violating the petitioners' right to speedy adjudication under Articles 14 and 21 of the Constitution. The court quashed the show cause notice and the personal hearing notice, allowing the writ petition.
Headnote
A) Customs Law - Show Cause Notice - Delay in Adjudication - The court considered whether a show cause notice issued in 2003 and a personal hearing notice issued in 2024, after a remand order in 2008, should be quashed due to inordinate delay. The court held that the delay of over 16 years in complying with the Tribunal's direction to adjudicate within six months was unexplained and caused prejudice to the petitioners, violating principles of natural justice and the right to speedy adjudication. (Paras 1-31)
B) Constitutional Law - Right to Speedy Adjudication - Article 14 and 21 of the Constitution - The court held that the right to speedy adjudication is a facet of the right to life and equality, and the inordinate delay in adjudicating the show cause notice infringed upon the petitioners' fundamental rights. (Paras 20-25)
C) Customs Act, 1962 - Sections 111(d), 111(m), 112(a), 114A - Confiscation and Penalty - The show cause notice proposed confiscation and penalty for alleged undervaluation of cloves. The court quashed the proceedings due to delay, without examining the merits of the allegations. (Paras 3-4)
Issue of Consideration
Whether the show cause notice dated 24.09.2003 and the personal hearing notice dated 19.06.2024 are liable to be quashed on account of inordinate and unexplained delay in adjudication, causing prejudice to the petitioners.
Final Decision
The court allowed the writ petition, quashing the show cause notice dated 24.09.2003 and the personal hearing notice dated 19.06.2024, and prohibiting further adjudication.
Law Points
- Inordinate delay in adjudication of show cause notice
- violation of principles of natural justice
- fundamental right to speedy adjudication under Article 14 and 21 of the Constitution
- stale proceedings
- prejudice due to loss of documents and fading memory
Case Details
2024 LawText (BOM) (11) 1101
Writ Petition No.3793 of 2024
M. S. Sonak, Ashwin D. Bhobe
Pratyushprava Saha I/by Khaitan & co. for Petitioners, Niyati Mankad along with Akash Singh for the Respondents
M/s. Esjaypee Impex Pvt. Ltd. and Shri Mahendrakumar P. Parmar
Union of India, Additional Director General, Directorate of Revenue Intelligence, Mumbai Zonal Unit, and Commissioner of Customs (Import-I)
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Nature of Litigation
Writ petition challenging show cause notice and personal hearing notice under Customs Act, 1962 on ground of inordinate delay in adjudication.
Remedy Sought
Petitioners sought writ of certiorari or prohibition to quash the show cause notice dated 24.09.2003 and personal hearing notice dated 19.06.2024, and to restrain adjudication.
Filing Reason
The petitioners alleged that the show cause notice issued in 2003 and the personal hearing notice issued in 2024, after a remand order in 2008, were stale and caused prejudice due to inordinate delay.
Previous Decisions
The Commissioner of Customs passed Order-in-Original on 30.11.2007, which was set aside by CESTAT on 10.09.2008 on ground of violation of natural justice, with direction to adjudicate within six months. The respondent failed to comply for over 16 years.
Issues
Whether the show cause notice dated 24.09.2003 and personal hearing notice dated 19.06.2024 are liable to be quashed on account of inordinate and unexplained delay in adjudication.
Whether the delay of over 16 years in complying with the Tribunal's direction violates principles of natural justice and the right to speedy adjudication under Articles 14 and 21 of the Constitution.
Submissions/Arguments
Petitioners argued that the delay of over 16 years in adjudication after the remand order caused irretrievable prejudice, as documents were lost and the matter became stale.
Respondents contended that the petitioners did not file a reply to the show cause notice and that the delay was not fatal, as the proceedings were still valid.
Ratio Decidendi
Inordinate and unexplained delay in adjudication of a show cause notice, especially after a remand order with a specific timeline, violates the principles of natural justice and the fundamental right to speedy adjudication under Articles 14 and 21 of the Constitution, rendering the proceedings stale and liable to be quashed.
Judgment Excerpts
The learned Tribunal, after hearing the parties, was pleased to dispose of the said Appeal vide order dated 10.09.2008, holding that the OIO was passed in violation of principles of natural justice and, on such conclusion, set aside the OIO and remanded the matter to the Respondent No.3 to pass an order within a period of 6 months from the date of receipt after granting an opportunity of personal hearing to the Petitioners; that the Respondent No.3 failed to comply with the directions of the learned Tribunal;
Procedural History
Show cause notice issued on 24.09.2003. Order-in-Original passed on 30.11.2007. Appeal to CESTAT allowed on 10.09.2008, setting aside OIO and remanding with direction to adjudicate within six months. Respondent failed to comply. Personal hearing notice issued on 19.06.2024. Writ petition filed in 2024. Interim stay granted on 21.08.2024. Final judgment on 11.11.2024.
Acts & Sections
- Customs Act, 1962: 111(d), 111(m), 112(a), 114A
- Constitution of India: Article 14, Article 21
