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2019 (10) TMI 1401 - HC - CustomsJurisdiction - power of DRI to issue Show Cause Notice - delayed/no adjudication of impugned Show Cause Notice - HELD THAT - As per Section 28(9) of Customs Act 1962 an officer senior in rank to Proper Officer having regard to the circumstances under which the proper officer was prevented from determining the amount of duty or interest under sub-section (8) extend the period specified in clause (a) to a further period of six months and the period specified in clause (b) to a further period of one year - As per Section 28(9A) of 1962 Act as re-produced hereabove in Para-11 for the reasons stated in clause (a) to (d) the Proper Officer shall inform concerned person the reason for non-determination of duty or interest under sub-section (8) - As per sub-section (9) of Section 28 of 1962 Act an officer senior in rank to Proper Officer may extend period and he is required to record the circumstances which prevented Proper Officer from determining the amount of duty. As per sub-section (9A) of Section 28 of 1962 Act the Proper Officer for the reasons specified under clause (a) to (d) may extend period and he is bound to inform the concerned person. We are not impressed with the argument of respondents that neither is there requirement to afford opportunity of personal hearing nor communication of extension order to the party concerned. As per respondent extension order is an administrative order and does not affect rights of the party. On the face of it the contention of the respondent is unreasonable fallicious and contrary to settled law. As per the amended Section 28(9) if show cause notice is not adjudicated within one (01) year it stands vacated thus right of party is certainly affected and he has every right to know reason of extension of period of adjudication of show cause notice. The vacation/lapsing of time period for adjudication of show cause notice results into immunity to party from duty liability proposed in the show cause notice. We are not oblivious of the fact that if extension order is not communicated possibility of passing ante dated order cannot be ruled out. In the case in hand the respondent is vehemently pleading that petitioner is governed by un-amended Section 28(9) of the 1962 Act as well argued that Chief Officer i.e. officer Senior in rank to Proper Officer- Commissioner of Customs has passed an order under amended section 28(9) of the Act. Concededly neither opportunity of hearing was granted prior to the purported extension order dated 26.03.2019 passed under Section 28(9) of 1962 Act nor said order was communicated. As per respondent itself order dated 26.03.2019 has been passed under Section 28(9) of the 1962 Act even though basis of said order is Clause (c) of Section 28(9A) of the 1962 Act. Clause (c) of Section 28 (9A) can be invoked in case an interim order of stay is passed by Appellate Tribunal or High Court or Supreme Court. In the present case matter is pending before this Court and any stay was never granted rather petition itself has been filed seeking quashing of Show Cause Notice on the ground of non-adjudication - Under Section 28 (9) as well Section 28 (9A) of 1962 Act competent officer is bound to pass some order assigning reasons/circumstances for non-adjudication and communicate to concerned person. The officer passing order is further bound to afford opportunity of hearing prior to passing extension order and in the absence of passing reasoned order coupled with its communication to concerned person the Respondent-Department cannot absolve itself from its statutory duty mandated under Section 28(9) of 1962 Act. Petition allowed.
Issues Involved:
1. Jurisdiction of DRI to issue Show Cause Notice. 2. Delay in adjudication of Show Cause Notice. 3. Maintainability of writ petition in presence of alternative remedy. 4. Retroactive application of amended Section 28(9) and (9A) of the Customs Act, 1962. 5. Extension of adjudication period under Section 28(9) and (9A) of the Customs Act, 1962. Issue-wise Detailed Analysis: 1. Jurisdiction of DRI to Issue Show Cause Notice: The petitioner challenged the Show Cause Notice dated 17.05.2007 issued by the Directorate of Revenue Intelligence (DRI) on the grounds of jurisdiction. The DRI had initiated an investigation against the petitioner, alleging misdeclaration of the value of goods. The petitioner initially approached the Settlement Commissioner, who rejected the application and relegated the petitioner to the Adjudicating Authority. 2. Delay in Adjudication of Show Cause Notice: The petitioner argued that more than twelve years had passed since the issuance of the Show Cause Notice, yet no adjudication order had been passed. The petitioner cited judgments from this Court, including GPI Textile Ltd. Vs. Union of India, Anil Kumar Soni Vs. Union of India, and Harkaran Dass Vedpal Vs. Union of India, to support the contention that the delay in adjudication warranted the quashing of the Show Cause Notice. 3. Maintainability of Writ Petition in Presence of Alternative Remedy: The respondents contended that the petitioner had an alternative remedy to file a reply and raise all pleas before the authorities, making the writ petition not maintainable. However, the Court found this preliminary objection devoid of merits, citing the Supreme Court's judgment in State of Punjab Vs. Bhatinda District Co-Op. Milk P. Union Ltd., which held that questions of reasonable period of limitation could not be decided by authorities appointed under the relevant statute. Thus, the Court deemed it appropriate to entertain the writ petition under Article 226 of the Constitution of India. 4. Retroactive Application of Amended Section 28(9) and (9A) of the Customs Act, 1962: The Court examined the amended provisions of Section 28(9) and (9A) of the Customs Act, 1962, which mandate that authorities must pass an order within one year from the date of the Show Cause Notice, extendable by another year under specific circumstances. The Court found that the amended provisions were retroactive, meaning they applied to pending Show Cause Notices as if issued on 29.03.2018. Since the respondent had not adjudicated the Show Cause Notice within the stipulated period, the notice was deemed to have lapsed. 5. Extension of Adjudication Period under Section 28(9) and (9A) of the Customs Act, 1962: The respondents claimed that the period for adjudication had been extended by an officer senior in rank to the proper officer. However, the Court found no evidence of such an extension order being passed or communicated to the petitioner. The Court emphasized that any extension of the adjudication period must be reasoned, involve an opportunity of hearing, and be communicated to the concerned party. The absence of these procedural safeguards rendered the respondents' contention invalid. Conclusion: The Court concluded that the Show Cause Notice dated 17.05.2007 was quashed due to the inordinate delay in adjudication and the failure to comply with the procedural requirements for extending the adjudication period. The judgment was based on the principles established in previous rulings, including GPI Textile Ltd. Vs. Union of India and Harkaran Dass Vedpal Vs. Union of India.
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