2024 (7) TMI 1009 - HC - Customs

Challenge to seizure memorandum, SCN and look out notice issued in respect of the managing partner of the partnership firm - mis-declaration of imported goods - HELD THAT - On examining the show cause notice, such show cause notice was issued under sub-section 4 of Section 28 r/w Section 124 and Section 110AA of the Customs Act. It also appears that such show cause notice sets out reasons for invoking sub-section 4, including suppression of facts and wilful misstatement. Sub-section 34 of Section 2 of the Customs Act defines Proper Officer widely as meaning an officer of customs who is assigned specific functions under the Customs Act. The petitioner is unable to establish that the Commissioner of Customs does not qualify as a proper officer for purposes of initiating proceedings under sub-section 4 of Section 28 of the Customs Act. The show cause notice was issued on 30.10.2023, which prima facie appears to be within the 5 year period of limitation under sub-section 4 of Section 28. As regards the lookout notice, such look out notice should be challenged in accordance with law by a person to whom such look out notice was issued. This writ petition has been filed by the partnership firm and not by the individual to whom the lookout notice was issued. The seizure memorandum was issued on 03.11.2021 and the challenge thereto is liable to be rejected on the ground of laches. For all these reasons, the Writ Petition is not sustainable. Petition dismissed.

Summary

Issues: Seizure memorandum validity, Jurisdiction of show cause notice, Period of limitation, Look out notice challenge, Proper officer authority, Laches in challenging seizure memorandum.

Seizure Memorandum Validity: The petitioner, a partnership firm involved in importing sports goods, challenged a seizure memorandum dated 03.11.2021, alleging misdeclaration of imported goods. The show cause notice dated 30.10.2023 invoked Section 28 of the Customs Act, 1962. The petitioner argued that the show cause notice was issued without jurisdiction as only the proper officer can initiate proceedings under Section 28.

Jurisdiction of Show Cause Notice: The petitioner contended that the show cause notice was beyond the limitation period prescribed by law and that the Commissioner of Customs, who issued the notice, was not the proper officer. However, the court found that the show cause notice was issued within the 5-year limitation period under Section 28 and that the Commissioner of Customs qualified as a proper officer under the Customs Act.

Look Out Notice Challenge: The petitioner also challenged a lookout notice issued to the managing partner, claiming it hindered the firm's ability to conduct business. The court noted that the challenge to a lookout notice should be made by the individual to whom it was issued, not by the partnership firm. Additionally, the court rejected the challenge to the seizure memorandum due to laches.

Proper Officer Authority: The court clarified that the Commissioner of Customs is considered a proper officer for initiating proceedings under Section 28 of the Customs Act. The show cause notice was issued citing reasons for invoking the extended limitation period, including suppression of facts and wilful misstatement.

Laches in Challenging Seizure Memorandum: The court dismissed the writ petition, stating that it was not sustainable. The petitioner failed to establish sufficient grounds to interfere with the show cause notice or the lookout notice. The court emphasized that challenges to such notices should be made within the legal framework and by the appropriate parties.

Conclusion: The High Court dismissed the writ petition, W.P. No. 17464 of 2024, without costs, along with closing the connected miscellaneous petitions. The judgment highlighted the importance of adhering to legal procedures and challenging notices within the prescribed framework.