2014 (6) TMI 758 - HC - Customs

Denial of draw back claim - Bar of limitation - Non application of mind - Writ petition - Alternate remedy - Held that - For filing an application under Article 226 of the Constitution there is no fixed period of limitation and as such neither the Limitation Act nor the time limits fixed in the schedule to the Act can be made rigorously applicable to a writ proceeding. The court over the years have only insisted that the conduct of the petitioner must not be blameworthy and there has not been any unnecessary or inordinate delay in approaching the court. A writ proceeding being outside the rigours of various periods of limitation is to be tested by the conduct of the party at whose instance it has been filed. While a court does not encourage a stale claim is to be adjudged after an inordinate delay it does not also lean in favour of curtailing a man s fundamental or statutory right by importing the concept of limitation with reference to the statutory period fixed for filing an appeal. Since the order passed by the respondent no. 4 was pursuant to the direction of a learned single judge of this court it cannot be said to be an order passed under the relevant Act. As a matter of fact the petitioner was given an opportunity of being heard only because the court had directed the concerned respondent so to do as such exercise of power by the respondent no. 4 must be deemed to be pursuant to the direction given by the Supreme Court and not in ordinary course passed under the Act. There appears to be sufficient justification in the uncontroverted allegation made by the petitioner that the respondents were under an obligation to consider the whole case independently and to come to a finding. The order complained of does not really reflect any independent application of mind. appropriate authority directed to consider and dispose of the petitioner s claim for Duty drawback within a period of three weeks from the date of the communication of the order. - Decided in favour of assessee.

Issues Involved:
1. Delay in release of Duty Drawback amount.
2. Compliance with court orders.
3. Allegations of non-cooperation and investigation by Customs authorities.
4. Limitation period for filing a writ petition under Article 226.
5. Merits of the petitioner's claim and the respondents' technical defenses.

Detailed Analysis:

Delay in Release of Duty Drawback Amount:
The petitioner, an exporter of readymade garments, claimed approximately Rs. 42 lacs under the Duty Drawback Scheme for shipments made in 2000. Despite submitting all relevant documents, the petitioner faced inordinate delays and unnecessary demands from the Customs authorities, leading to significant delays in the release of the drawback amount. The petitioner criticized this inaction as harassing and contrary to the policy of the Central Board of Excise and Customs, which mandates that drawback claims are to be paid within 24 hours.

Compliance with Court Orders:
In a writ petition filed in 2003, a learned single judge directed respondent no. 5 to consider and dispose of the petitioner's representation within four weeks, providing an opportunity for the petitioner to be heard and to pass a reasoned order. Respondent no. 4's communication dated September 17, 2004, claimed the petitioner's firm was not cooperating and warranted an investigation into the change of proprietorship. This led to the current writ petition challenging the compliance with the court's order.

Allegations of Non-Cooperation and Investigation by Customs Authorities:
Respondent no. 4 alleged non-cooperation from the petitioner's firm and expressed doubts about its existence, necessitating an investigation. The petitioner, however, contended that such issues were never raised during his visits to the authorities and suspected foul play. The petitioner also argued that the necessity of filing a bank realization certificate was ruled out by the outer limit period for releasing the drawback amount.

Limitation Period for Filing a Writ Petition under Article 226:
The respondents argued that the petitioner should have filed an appeal under Section 128 of the Customs Act within the statutory period of 90 days, which expired on December 19, 2004. The petitioner filed the writ petition about a month later, rendering it barred by limitation. However, the court held that for filing an application under Article 226, there is no fixed period of limitation. The conduct of the petitioner must not be blameworthy, and there must not be any unnecessary or inordinate delay in approaching the court. The court cited Supreme Court judgments, emphasizing that no specific period of limitation applies to writ petitions and that each case must be decided based on its facts and circumstances.

Merits of the Petitioner's Claim and the Respondents' Technical Defenses:
The court found no justification in the respondents' stand and emphasized that the respondents should have considered the whole case independently and come to a finding. The respondents' failure to file an affidavit-in-opposition and their reliance on technical pleas without addressing the merits of the case were criticized. The court underscored that public authorities should not rely on technical pleas to defeat legitimate claims of citizens.

The court set aside the order dated September 17, 2004, passed by respondent no. 4, and directed the appropriate authority to consider and dispose of the petitioner's claim for Duty Drawback within three weeks. The petitioner was directed to cooperate with the respondents. If there were no disentitling factors, the appropriate authority was to release the drawback amount along with interest at 10% from the due date to the actual payment date. The timeframe was deemed peremptory due to the unusual longevity of the case.

The writ petition was disposed of without any order as to costs.

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