Case Note & Summary
The petitioner, Eastern Agencies Aromatics (P) Ltd., a company registered under the Companies Act, 1956, filed a writ petition challenging a Show Cause cum Demand Notice dated 26 September 2013 issued by the Additional Director General, Directorate of Revenue Intelligence, Lucknow. The notice demanded import duty of Rs. 1,66,03,427/- along with interest under Sections 28 and 28AA/28AB of the Customs Act, 1962, on the ground that the petitioner had availed duty-free imports under DFIA licenses issued to certain exporters who had allegedly made irregular exports. The petitioner responded to the notice on 21 January 2014, but no further action was taken for nearly 9 years. In August 2022, the Superintendent of Customs, Adjudication (Export), called the petitioner for a personal hearing scheduled in September 2022. The petitioner then approached the High Court seeking quashing of the show cause notice and restraint on further proceedings. The court considered whether the inordinate delay in adjudication, without any explanation, was oppressive and violative of principles of natural justice. The court noted that the show cause notice was issued in 2013 and remained pending for 9 years without any progress, and the first hearing was scheduled only in 2022. The court held that such delay, without any justification, causes prejudice to the noticee and amounts to an abuse of process. The court quashed the show cause notice and all consequential proceedings, ruling in favor of the petitioner.
Headnote
A) Customs Law - Show Cause Notice - Delay in Adjudication - Section 28 of Customs Act, 1962 - The petitioner challenged a show cause notice issued in 2013 demanding import duty of Rs. 1,66,03,427/-. The adjudication remained pending for 9 years without any progress. The court held that such inordinate delay without explanation is oppressive and violative of principles of natural justice, and quashed the notice. (Paras 2-6) B) Customs Law - Principles of Natural Justice - Delay - Section 28 of Customs Act, 1962 - The court held that keeping a show cause notice pending for 9 years without any hearing or explanation causes prejudice to the noticee and amounts to abuse of process. The notice was quashed. (Paras 5-6)
Issue of Consideration
Whether the inordinate delay of 9 years in adjudicating a show cause notice under Section 28 of the Customs Act, 1962, without any explanation, renders the notice liable to be quashed as oppressive and violative of principles of natural justice.
Final Decision
The court quashed the Show Cause cum Demand Notice dated 26 September 2013 and all consequential proceedings. Rule made absolute.
Law Points
- Inordinate delay in adjudication of show cause notice
- violation of principles of natural justice
- oppressive exercise of power
- Section 28 of Customs Act
- 1962
