2019 (11) TMI 455 - HC - Customs

Jurisdiction - power of Additional Director General, the Zonal unit to issue SCN - whether the Additional Director General, the Zonal unit, Kolkata of the Directorate of Revenue Intelligence had the authority and the power to issue the show-cause notice dated 2nd December, 2017? HELD THAT - Section 4 of the said Act provides for appointment of any person to discharge the functions of, inter alia, the Commissioner of Customs. The breadth of this section is very wide. Considering the exigency, the government has the power to appoint, inter alia, any person as the Commissioner of Customs. This section provides a parallel and separate mode of recruitment distinct to the procedure mentioned in the said rules under Article 309, to the post of Commissioner. The said section laid down that any person could be appointed as Commissioner of Customs, not confining itself to appointments of officers of Customs as Commissioner or Principal Commissioner. Had that been so there could possibly been a source of conflict between the said sections of the Act and the Article 309 rules. For both the above reasons, the recruitment rules for recruitment, promotion and selection in the said 2016 rules do not apply, to the selection under Sections 4 and 6 of the said Act. In any event, there is in my opinion no conflict between the said Act and the rules. There is a well established presumption that a government or an officer exercising statutory authority is acting regularly. The onus is on the person challenging his authority to establish it. The respondent writ petitioners have miserably failed to even make out a semblance of a case. The impugned judgment and order dated 11th July, 2018 is set aside - Appeal allowed.

Issues Involved:
1. Authority of the officer issuing the show-cause notice.
2. Jurisdiction of the Additional Director General of the Directorate of Revenue Intelligence.
3. Validity of the show-cause notice under Section 124 of the Customs Act, 1962.
4. Alleged pre-disposition of the appellants in the show-cause notice.
5. Compliance with Article 309 of the Constitution of India and the Customs Act, 1962.

Detailed Analysis:

1. Authority of the officer issuing the show-cause notice:
The core issue was whether the Additional Director General of the Directorate of Revenue Intelligence (DRI) had the authority to issue the show-cause notice. The respondents contended that the officer who issued the show-cause notice was not a "proper officer" under Section 2(34) of the Customs Act, 1962. The court examined various notifications and rules, including the notification dated 7th July 1997, which appointed all officers of the DRI as officers of Customs. It was argued that the show-cause notice had to be issued by a proper officer, but Section 124 of the Customs Act specifies that an officer of Customs not below the rank of an Assistant Commissioner of Customs can issue such a notice. The court found that the argument about the necessity of the show-cause notice being issued by a proper officer was incorrect and rejected it outright.

2. Jurisdiction of the Additional Director General of the Directorate of Revenue Intelligence:
The respondents argued that the Additional Director General did not have the jurisdiction to issue the show-cause notice as he was not properly appointed under the Customs Act. The court noted that Section 4 of the Customs Act provides the Board with the power to appoint any person as an officer of Customs. The court further examined the rules made under Article 309 of the Constitution, which regulate the recruitment and conditions of service for various posts. The court concluded that the rules under Article 309 do not apply to appointments under Sections 4 and 6 of the Customs Act, as the latter provides a separate mode of recruitment.

3. Validity of the show-cause notice under Section 124 of the Customs Act, 1962:
The court examined whether the show-cause notice issued by the Additional Director General was valid. The court found that the Additional Director General had been promoted to the grade of Commissioner of Customs and Central Excise and was appointed as Director General of Revenue Intelligence, Kolkata Zonal Unit. The court held that the appointment was valid and the show-cause notice was issued under proper authority. The court rejected the argument that the show-cause notice was a nullity due to the alleged invalidity of the appointment.

4. Alleged pre-disposition of the appellants in the show-cause notice:
The respondents contended that the show-cause notice showed a pre-disposition of mind, suggesting that the appellants had already made up their minds about the guilt of the persons charged. The court examined the language of the show-cause notice and found that although certain paragraphs were described as "discussion and findings," the notice as a whole invited the respondents to show cause, inspect documents, and submit written replies. The court concluded that the show-cause notice did not show any pre-disposition of mind and was not prejudicial.

5. Compliance with Article 309 of the Constitution of India and the Customs Act, 1962:
The respondents argued that the appointment of the Additional Director General was not in compliance with the rules made under Article 309 of the Constitution. The court examined the relevant rules and notifications and found that the appointment was made in accordance with the provisions of the Customs Act and the rules under Article 309. The court held that there was no conflict between the Customs Act and the Article 309 rules, and the appointment was valid.

Conclusion:
The court allowed the appeals, set aside the impugned judgment and order dated 10th July 2018, and dismissed all the writ applications. The court held that the Additional Director General was validly appointed and had the jurisdiction and power to issue the show-cause notice. The court also found that the show-cause notice did not show any pre-disposition of mind and was issued under proper authority. The arguments of the respondents were rejected, and the court emphasized the importance of the presumption that a government officer exercising statutory authority is acting regularly.

← Previous Next →