2018 (7) TMI 352 - HC - Customs

Legality of Supplementary notice dated May 18, 2017 and an addendum issued thereto dated September 22, 2017 - Held that - A considerable period of time has elapsed since the issuance of the supplementary notice with the addendum thereto. The show cause notice proceedings are being considered at the appropriate level. The petitioner has participated in such proceedings. At this stage, therefore, it would be inappropriate to stay the proceedings before the authorities. It would also be inappropriate to direct, that, no effect be given to the final order that, may be passed in such proceedings. The issues raised in the writ petition are such that, an opportunity should be afforded to the respondents to file affidavits.

Summary

Issues:
Challenge to supplementary notice and addendum under Customs Act, 1962; Retroactive effect of amendments to Section 124; Jurisdiction of proper officer; Balance of convenience in granting relief; Opportunity to file affidavits.

Analysis:
The petitioner challenged a supplementary notice and addendum dated May 18, 2017, and September 22, 2017, respectively, under the Customs Act, 1962, arguing that they could not have been issued due to subsequent amendments to Section 124 introduced on March 29, 2018. The petitioner contended that the amendments were substantive and not retrospective, allowing a proper officer to issue a supplementary notice under prescribed circumstances. The introduction of the second proviso postulated that the proper officer lacked such power before March 29, 2018. Additionally, the petitioner argued that the person issuing the notice was not the proper officer, citing precedent (AIR 1980 Calcutta 188 - M/s. Euresian Equipments & Chemicals Ltd. & Ors.-Versus- The Collector of Customs & Ors.).

The respondent argued that another noticee had challenged a similar show cause notice before the Writ Court, with an appeal pending, making the issue sub judice. The respondent contended that the introduction of the second proviso did not negate the authorities' power to issue a notice under the existing provisions. The respondent sought direction for filing affidavits to support their position.

After hearing both parties, the Court noted that a significant amount of time had passed since the issuance of the notice, with proceedings ongoing and the petitioner's participation. The Court found it inappropriate to stay or nullify the proceedings at this stage, as it would not be in favor of the petitioner. The Court decided that the issues raised required the respondents to file affidavits, allowing an opportunity for further submissions.

In light of the arguments presented and the ongoing proceedings, the Court directed the respondent to file an affidavit-in-opposition within four weeks and allowed the petitioner to file an affidavit-in-reply within two weeks thereafter. The Court listed the writ petition for a hearing six weeks from the date of the order, providing an opportunity for both parties to present their case comprehensively.