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2024 (11) TMI 622 - HC - CustomsDelay in disposal/adjudication of the proceedings of SCN - HELD THAT - Petitioners cannot be made to suffer for all this lethargy and callousness on the part of the revenue. If the sword of Damocles, in the form of the impugned SCN is kept hanging over the Petitioners for over 21 years, it would make it impossible for the Petitioners to plan their business or make provisions for any contingent liabilities. Such inordinate delay breaches fair procedures that should always inform the adjudication in fiscal matters. Prejudice, in the gross facts of this case, is evident. For the reasons recorded hereinabove, we are satisfied that the inordinate delay/delayed adjudication was in contravention of procedural fairness and, thus, violative of principles of natural justice. Adjudicating Authority should have adjudicated the impugned SCN within a reasonable time; failure to do so is bound to cause prejudice to the Petitioners. This Court has repeatedly quashed such inordinately delayed adjudications backed by no compelling explanations in the precedents referred to above.
Issues Involved:
1. Inordinate delay in adjudication of the Show Cause Notice (SCN). 2. Violation of principles of natural justice. 3. Prejudice caused to the Petitioners due to delayed proceedings. 4. Whether the delay in adjudication can be justified by Respondents. 5. Impact of the delay on the Petitioners' ability to defend themselves. Detailed Analysis: 1. Inordinate Delay in Adjudication of the Show Cause Notice (SCN): The primary issue addressed in the judgment is the inordinate delay in the adjudication of the SCN issued on 24.09.2003. The Petitioners argued that the delay of over 21 years from the date of import and 16 years from the Tribunal's order dated 10.09.2008 has rendered the issue stale. The Court observed that the Respondent No. 3 was directed by the Tribunal to dispose of the SCN within six months from the date of the order, which was not adhered to. The Court found no convincing explanation for this breach, emphasizing that the adjudication should have been completed by May-June 2009. The delay was deemed inordinate and unexplained, leading to the conclusion that such a delay is unjustifiable. 2. Violation of Principles of Natural Justice: The Court highlighted that the delay in adjudication violated the principles of natural justice. It was noted that the Petitioners were not informed about the SCN being kept in the Call Book, which deprived them of the opportunity to safeguard evidence or challenge the reasons for the delay. The Court cited previous judgments underscoring that unreasonable and unjustified delays contravene procedural fairness and are violative of natural justice principles. The delay was attributed solely to the Respondents, and the Court emphasized that such arbitrary administrative behavior is contrary to lawful, fair, and effective quasi-judicial adjudication. 3. Prejudice Caused to the Petitioners Due to Delayed Proceedings: The Petitioners contended that the excessive lapse of time caused irretrievable prejudice as they lost all records related to the matter. The Court agreed, stating that the inordinate delay inherently prejudices the Petitioners, making it impossible to recall events accurately after such a long period. The Court referenced several precedents where similar delays were found to cause irreparable harm to the noticee's rights, thus affirming the Petitioners' claim of prejudice. 4. Whether the Delay in Adjudication Can Be Justified by Respondents: The Respondents attempted to justify the delay by citing various notifications and instructions, including the impact of the COVID-19 pandemic. However, the Court found these justifications unsatisfactory. It was noted that the delay was inordinate even before the pandemic, and the Respondents failed to provide a legally tenable explanation for not adhering to the Tribunal's directions. The Court dismissed the Respondents' reliance on the pandemic as a reason for the delay, emphasizing that the period for disposal had commenced well before the pandemic. 5. Impact of the Delay on the Petitioners' Ability to Defend Themselves: The Court acknowledged that the prolonged delay severely impacted the Petitioners' ability to defend themselves, as vital evidence may have been lost or become untraceable. The judgment emphasized that such delays deny fairness and judiciousness, which are essential to the principles of natural justice. The Court concluded that the delay was solely attributable to the Respondents and that the Petitioners should not suffer due to the Respondents' lethargy and callousness. Conclusion: The Court quashed and set aside the impugned SCN and the Personal Hearing Notice, restraining the Respondents from proceeding further. The judgment emphasized that the inordinate delay in adjudication was in contravention of procedural fairness and violated the principles of natural justice, causing prejudice to the Petitioners. The Rule was made absolute, and the Writ Petition was disposed of without costs.
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