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2025 (2) TMI 857 - HC - CustomsDelay in adjudication of SCN - After almost 12 years since issuing the impugned SCN and about 10 years after filing of the detailed reply to the same the respective proceedings against the Petitioners were concluded - whether the delay in adjudication was justified? - HELD THAT - The issue raised in the petition is no longer res-integra. Section 28(9) of the Act unamended and amended have been considered in detail by the Coordinate Benches of this Court in Swatch Group India Pvt. Ltd. 2023 (8) TMI 864 - DELHI HIGH COURT as also M/s Vos Technologies India Pvt. Ltd. v. The Principle Additional Director General Anr. 2024 (12) TMI 624 - DELHI HIGH COURT where it was held that The legislature in its wisdom has provided a specific period for the authority to discharge its functions. The indifference of the concerned officer to complete the adjudication within the time period as mandated cannot be condoned to the detriment of the assessee. Such indifference is not only detrimental to the interest of the taxpayer but also to the exchequer. Coming to the facts of this case the impugned SCN dates back to 20th June 2012. The Petitioners had made several requests for providing all the RUDs with the concerned assessing authority. The personal hearing was scheduled on several dates between July 2012 and March 2015. Thereafter the Petitioners are stated to have filed their respective detailed replies to the impugned SCN. Personal hearing was conducted on 17th July 2014 and 30th March 2015. Despite the repeated personal hearings scheduled and conducted by the concerned adjudicating officer the impugned SCN was not adjudicated between 2012 and 2015. It is noted that the Mangli Impex 2016 (5) TMI 225 - DELHI HIGH COURT decision came only on 3rd May 2016 and the matter has been placed in the Call Book only thereafter. The impugned SCN was then taken out of the Call Book sometime in 2019 pursuant to the letter dated 15th April 2019 issued by the Chief Commissioner Delhi Zone. The Customs Department has argued that the Petitioners were granted repeated opportunities for personal hearing however the Petitioners delayed the adjudication of the present matter by requesting for additional documents. As per the Customs Department the delay in adjudication of the present matter is not due to any inaction on part of the assessing authority. The continued insistence of the Petitioners for additional documents coupled with the fact that the matters was put in the Call Book for long period has resulted in the delay which is beyond the control of the assessing authority - The impugned SCN which was issued way back in 2012 due to repeated placing in the call book has not been adjudicated for so long. Repeated placing and removing from the call book is not a valid justification for non-adjudication of the impugned SCN for about 15 years. Moreover the gaps between the said periods is also inexplicable. Hearing notices have been given to the Petitioners but there is no reason for non-adjudication of the impugned SCN for long period. Further the Co-ordinate Bench of this Court in Vos Technologies has rejected the argument of the Customs Department that the delay in adjudication occurred solely due to the repeated request from the assessee for additional documents. Conclusion - i) The statutory timelines for adjudication are mandatory and cannot be bypassed by administrative delays or procedural lapses. ii) The impugned SCN dated 20th June 2012 and the Order-in-Original dated 26th March 2024 were quashed due to the delay in adjudication. Petition allowed.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered in this judgment include:
2. ISSUE-WISE DETAILED ANALYSIS Relevant legal framework and precedents: Section 28(9) of the Customs Act, 1962, as it stood prior to the amendment, provided a timeline of six months to one year for adjudication of SCNs. The amendment removed the phrase "where it is possible to do so," indicating a legislative intent to enforce stricter timelines. The Court referenced several precedents, including Swatch Group India Pvt. Ltd. v. Union of India & Ors. and M/s Vos Technologies India Pvt. Ltd. v. The Principal Additional Director General & Anr., which emphasized the necessity of adhering to statutory timelines. Court's interpretation and reasoning: The Court interpreted Section 28(9) to mean that the adjudicating authority is required to conclude proceedings within the specified time unless genuinely hindered by factors beyond control. The Court found that the phrase "where it is possible to do so" does not permit indefinite delays and that the amendment further underscores this by removing the phrase altogether. Key evidence and findings: The Court noted that the SCN was issued on 20th June 2012, and the Order-in-Original was passed almost 12 years later, in 2024. The SCN was placed in the Call Book on multiple occasions, significantly delaying the adjudication process. The Petitioners had requested additional documents, but the Court found that the delay was primarily due to the actions of the Customs Department. Application of law to facts: The Court applied the legal principles from the aforementioned precedents, concluding that the Customs Department failed to adjudicate the SCN within the statutory period. The repeated placement of the SCN in the Call Book did not justify the delay, as there was no substantial reason preventing the adjudication. Treatment of competing arguments: The Customs Department argued that the delay was due to the Petitioners' requests for additional documents and the placement of the SCN in the Call Book. However, the Court found these arguments unpersuasive, noting that the Department did not provide sufficient justification for the prolonged delay and that the Petitioners' actions did not warrant such an extensive delay. Conclusions: The Court concluded that the SCN and the Order-in-Original were not adjudicated within the statutory time limits, rendering them unsustainable. The Court emphasized that statutory timelines must be adhered to, and the Department's failure to do so invalidated the proceedings. 3. SIGNIFICANT HOLDINGS Preserve verbatim quotes of crucial legal reasoning: "The indifference of the concerned officer to complete the adjudication within the time period as mandated, cannot be condoned to the detriment of the assessee. Such indifference is not only detrimental to the interest of the taxpayer but also to the exchequer." Core principles established:
Final determinations on each issue:
The petitions were allowed, and both the SCN and the Order-in-Original were set aside, with all pending applications disposed of accordingly.
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