2020 (1) TMI 283 - HC - Customs

Adjudication of show cause notice - SCN was issued in 2002 and was pending - Validity of notice of hearing issued 2017 - basis of the challenge to the notice of hearing, is the long delay in taking up adjudication proceedings - HELD THAT - The long delay in taking up the adjudication of a show cause notice (without sufficient cause), would be indicative of the Revenue having abandoned the show cause notice - this delay in adjudication would cause prejudice to the noticee as the men in the knowledge of the facts may not be available or even if available, memories fail. Besides, papers and records which may be an answer to the challenges in the notice may not be traceable. Thus, making it impossible to respond to the notice appropriately. Petition allowed.

Summary

Issues:
Challenge to notice of hearing based on delay in adjudication proceedings.

Analysis:
The petitioner challenged a notice of hearing dated 21st December, 2018 issued by the office of the Commissioner of Customs (Import) seeking to adjudicate a show cause notice issued on 28th March, 2002 under Section 28 of the Customs Act, 1962. The petitioner, along with another party, was a co-noticee to the show cause notice. The delay in taking up adjudication proceedings was the basis of the challenge. The High Court referred to a previous decision where a similar challenge due to long delay was allowed, as it caused serious prejudice to the parties involved. The Court noted that the delay in adjudication without sufficient cause could indicate abandonment of the show cause notice by the Revenue, leading to prejudice as crucial information and records might not be available anymore, making it impossible to respond appropriately.

The respondents did not appear despite being served, and the petitioners were directed to inform them about the upcoming hearing. The issue was whether the delay in adjudication proceedings, without sufficient cause, warranted quashing the show cause notice. The Court emphasized that the delay could prejudice the noticee's ability to defend themselves adequately. The decision was based on the principle that long delays in adjudication without valid reasons could lead to abandonment of the notice by the Revenue, causing significant prejudice to the parties involved.

The respondents conceded that the issue in the present case was covered by a previous decision of the Court. The Court, in line with its previous ruling, allowed the petition and quashed the show cause notice issued in 2002 to the petitioner. The decision was based on the understanding that the delay in adjudication proceedings, without a valid explanation, could hinder the noticee's ability to respond effectively to the notice. The Court's decision was consistent with the principle that unreasonable delays in adjudication could result in serious prejudice to the parties involved, as crucial information and records might no longer be accessible.