Case Note & Summary
The petitioner, Bhushan Vora, a sole proprietor engaged in import and export of saffron, challenged a show cause notice (SCN) dated 10 March 2015 issued by the Directorate of Revenue Intelligence (DRI) under Section 28 of the Customs Act, 1962, demanding import duty of Rs.3,66,360/- along with interest. The petitioner replied on 2 April 2015 and requested a personal hearing. For about three years, no steps were taken. On 23 February 2018, the petitioner was informed that the Commissioner of Customs had been appointed as the adjudicating authority, and he was asked to reply again. The petitioner re-filed his reply. A personal hearing was fixed on 17 April 2018, but the petitioner sought an adjournment. Thereafter, no action was taken for over four years until a hearing was fixed on 13 December 2022. The petitioner filed a writ petition under Article 226 of the Constitution of India, primarily arguing that the 8-year delay in adjudication was unreasonable and the SCN should be quashed. The respondents sought to justify the delay by stating that the case was transferred to the call book in June 2018 due to conflicting decisions, and relied on Collector of Central Excise v. Bagsons Paints Industry (2003) to argue that there is no statutory bar to adjudicate after a lapse of time. The court noted that the petitioner was not informed about the transfer to the call book, and no proof of communication was provided. The court held that non-communication of the transfer was fatal, and the delay was unjustified. Relying on a series of decisions, including ICICI Home Finance Company Ltd. v. Union of India (2024), the court quashed the SCN and the proceedings.
Headnote
A) Customs Law - Show Cause Notice - Delay in Adjudication - Section 28 Customs Act, 1962 - The court considered whether a show cause notice issued in 2015 could be adjudicated after 8 years without any justification. The court held that the delay was unreasonable and the non-communication of transfer to call book was fatal, quashing the notice (Paras 1-8).
B) Customs Law - Call Book - Non-Communication - Section 28 Customs Act, 1962 - The court held that even in the absence of a statutory provision, it was mandatory for the department to inform the petitioner about the transfer of his case to the call book. Failure to do so vitiated the proceedings (Paras 7-8).
Issue of Consideration
Whether the show cause notice issued in 2015 can be adjudicated after a delay of almost 8 years, and whether non-communication of transfer of the case to call book is fatal to the proceedings.
Final Decision
The court allowed the petition and quashed the show cause notice dated 10 March 2015 and the proceedings for adjudication.
Law Points
- Delay in adjudication of show cause notice
- non-communication of transfer to call book
- reasonable time for adjudication
- Section 28 Customs Act 1962
Case Details
2024 LawText (BOM) (9) 107
Writ Petition No.389 of 2023
K. R. Shriram, Jitendra Jain
Prakash Shah a/w. Jas Sanghavi i/b. M/s. PDS Legal for Petitioner; P. M. Sharma for Respondent Nos.1 to 3; Sangeeta Yadav for Respondent Nos.4 and 5
Union of India, Commissioner of Customs – IV, Deputy Commissioner of Customs- IV (Export), Deputy Director DRI Lucknow, Principal Additional Director General DRI Lucknow
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Nature of Litigation
Writ petition under Article 226 of the Constitution of India challenging a show cause notice issued under the Customs Act, 1962 on the ground of delay in adjudication.
Remedy Sought
Petitioner sought quashing of the show cause notice dated 10 March 2015 and the proceedings for adjudication.
Filing Reason
The show cause notice was issued in 2015 but not adjudicated for almost 8 years, and the petitioner was not informed about the transfer of the case to the call book.
Previous Decisions
The petitioner had replied to the SCN in 2015, and a personal hearing was fixed in 2018 but adjourned. No further steps were taken until 2022.
Issues
Whether the delay of almost 8 years in adjudicating the show cause notice is unreasonable and warrants quashing of the notice.
Whether non-communication of the transfer of the case to the call book is fatal to the proceedings.
Submissions/Arguments
Petitioner argued that the 8-year delay in adjudication is unreasonable and relied on over 30 decisions of this Court where SCNs were quashed on ground of delay.
Respondents argued that there is no statutory bar to adjudicate after lapse of time, relying on Collector of Central Excise v. Bagsons Paints Industry, and that the case was transferred to call book due to conflicting decisions.
Ratio Decidendi
Even in the absence of a statutory time limit, a show cause notice must be adjudicated within a reasonable time. Non-communication of transfer of the case to the call book is fatal to the proceedings, as the noticee is entitled to know the status of the notice. The delay of 8 years without justification renders the SCN liable to be quashed.
Judgment Excerpts
Petitioner is justified in relying upon the series of orders passed by this Court, wherein on very similar fact situation, attempt to adjudicate the SCN after a long delay has been quashed.
Therefore, the justification sought for delay in adjudication of the SCN on the ground of transfer of case to 'call book' cannot be accepted.
Non-communication of transfer of the show cause notices to call book is fatal to the case of respondents.
Procedural History
Show cause notice issued on 10 March 2015. Petitioner replied on 2 April 2015. No action for 3 years. On 23 February 2018, petitioner informed that Commissioner of Customs appointed as adjudicating authority. Personal hearing fixed on 17 April 2018 but adjourned. No further steps until 13 December 2022 when another hearing fixed. Petitioner filed writ petition in 2023. Judgment delivered on 10 September 2024.
Acts & Sections
- Customs Act, 1962: Section 28, Section 28AA, Section 28AB, Section 28(9), Section 28(9A)
- Constitution of India: Article 226
