Case Note & Summary
The petitioner, a private limited company, approached the High Court of Judicature at Bombay in its civil appellate jurisdiction under Article 226 of the Constitution of India, challenging an Order-in-Original dated 5 December 2023 passed in a customs matter. The central dispute arose from a show cause notice issued by officers of the Directorate of Revenue Intelligence (DRI) under Section 28 of the Customs Act, 1962. The petitioner challenged the order on the ground that DRI officers were not proper officers to issue show cause notices and also invoked failure of natural justice. The writ petition was filed as Writ Petition No. 10018 of 2024 and was kept pending because of the pendency of Review Petition No. 400 of 2021 before the Supreme Court in Canon India Private Limited (Civil Appeal No. 1827 of 2018). In Canon India, the Supreme Court had earlier held that DRI officers could not be considered proper officers for issuing show cause notices. However, by order dated 7 November 2024, the Supreme Court allowed the review petition and held that DRI officers are proper officers for the purposes of Section 28 of the Customs Act, 1962, and upheld Section 97 of the Finance Act, 2022, which retrospectively validated show cause notices issued by such officers. The Supreme Court also issued directions in paragraph 168 for pending matters, including clause (vi)(c) for cases where orders-in-original were challenged before High Courts on the ground of maintainability due to lack of jurisdiction of the proper officer. In such cases, the High Court was to grant eight weeks' time to the assessee to prefer an appropriate appeal before the Customs Excise and Service Tax Appellate Tribunal (CESTAT). After the review decision, the present petition was taken up for disposal. The High Court noted that clause (vi)(c) of paragraph 168 was relevant. The Court did not go into the merits of the challenge, since the jurisdictional issue had been conclusively settled by the Supreme Court. It disposed of the petition by granting the petitioner eight weeks' time from the date of uploading of the order to file an appeal challenging the Order-in-Original dated 5 December 2023 before CESTAT. The Court directed that if such an appeal was filed within eight weeks, the appellate authority should dispose of the appeal on its own merits and in accordance with law, without adverting to the issue of limitation. The Court further kept all contentions of the parties on merits, including the petitioner's contention regarding failure of natural justice, open, but clarified that contentions which stood concluded by the Supreme Court's decision in Review Petition No. 400 of 2021 could not be raised again. No order as to costs was passed, and all concerned were directed to act on an authenticated copy of the order.
Headnote
A) Customs Law - Jurisdiction of Proper Officer - DRI Officers as Proper Officer - Customs Act, 1962, Sections 2(34), 5, 6, 17, 28; Finance Act, 2022, Section 97 - The Supreme Court in review petition held that DRI officers are proper officers for issuing show cause notices under Section 28, overruling the earlier Canon India view, and upheld Section 97 of Finance Act, 2022 which retrospectively validated such notices; the High Court applied this binding decision and did not quash the Order-in-Original on the ground of lack of jurisdiction (Paras 2-4). B) Customs Law - Appellate Remedy - Procedure for Orders-in-Original Challenged on Jurisdiction - Customs Act, 1962, Section 28 - Where an Order-in-Original was challenged before the High Court on the ground of maintainability due to lack of jurisdiction of the proper officer, the High Court, following clause (vi)(c) of the Supreme Court's order, granted eight weeks' time to the assessee to prefer an appeal before CESTAT; if such appeal was filed within eight weeks, the appellate authority was to decide it on merits without adverting to limitation (Paras 5-7). C) Natural Justice - Preservation of Contentions - No Specific Statutory Provision - The Court kept all contentions on merits, including the petitioner's contention regarding failure of natural justice, open; however, contentions concluded by the Supreme Court's decision in Review Petition No. 400 of 2021 could not be re-agitated (Para 8).
Issue of Consideration
Whether the petitioner was entitled to challenge the Order-in-Original on the ground that DRI officers lacked jurisdiction to issue show cause notice, and the appropriate course of action following Supreme Court's review decision restoring DRI officers' jurisdiction under Section 28 of the Customs Act, 1962.
Final Decision
Petition disposed of. Petitioners granted eight weeks from the date of uploading of the present order to file appeal challenging the Order-in-Original dated 5 December 2023. If such appeal is filed within eight weeks, the appellate authority shall dispose of the appeal on its own merits and in accordance with law without adverting to the issue of limitation. All contentions of the parties on merits, including the petitioner's contention regarding failure of natural justice, are kept open, except contentions which stand concluded by the Supreme Court's decision in Review Petition No. 400 of 2021 cannot be raised now. No order as to costs.
Law Points
- DRI officers are proper officers under Section 28 of the Customs Act
- 1962
- Section 97 of the Finance Act
- 2022 retrospectively validates show cause notices
- High Court shall grant eight weeks to file appeal before CESTAT where orders-in-original are challenged on jurisdiction ground
- appeal to be decided on merits without limitation
