2025 (2) TMI 1063 - HC - Customs

Challenge to SCN - SCN has not been issued by a proper officer in terms of the Section 28 of the Customs Act 1962 - opportunity of hearing - principles of natural justice - HELD THAT - The Petitioner shall be given an opportunity to file a reply and a personal hearing shall also be afforded by the concerned Adjudicating Authority - The Court notices that the remaining matters in the connected batch of writ petitions which were adjourned sine die on 25th September 2023 could also be decided on the basis of the decision of the Supreme Court in Cannon - II 2024 (11) TMI 391 - SUPREME COURT (LB) . Petition disposed off.

Summary

The issues presented and considered in the judgment are as follows:1. Whether the show cause notice issued by the Directorate of Revenue Intelligence is valid under Section 28 of the Customs Act, 1962.2. Jurisdiction of DRI officials to issue show cause notices and pass adjudication orders.3. Validity and constitutionality of Section 97 of the Finance Act, 2022 in retrospectively validating show cause notices issued under Section 28 of the Customs Act, 1962.Issue-wise detailed analysis:1. The Court considered the jurisdiction of DRI officials to issue show cause notices and adjudication orders. The Court referred to the judgment in Canon India Private Limited v. Commissioner of Customs, 2021 SCC OnLine SC, which raised similar issues. The Finance Act, 2022 amended the Customs Act, validating actions that would have been invalid based on the Canon-I judgment. The vires of the Finance Act, 2022 was challenged in Union of India & Ors. v. Aspam Petrochem Pvt. Ltd. The Court adjourned the matters pending the decision on the Finance Act's validity.2. The Supreme Court's judgment in Canon - II on 7th November, 2024, concluded that Section 97 of the Finance Act, 2022 retrospectively validated show cause notices under Section 28 of the Customs Act, 1962. The Court held that the officers of DRI, Commissionerates of Customs, and other relevant officers are proper officers under Section 28. The Court directed pending challenges to show cause notices to be disposed of in accordance with the judgment.Significant holdings:- The Finance Act, 2022, specifically Section 97, was held to be constitutional in retrospectively validating show cause notices.- Officers of DRI and other relevant departments were confirmed as proper officers under Section 28 of the Customs Act, 1962.- The Court directed pending challenges to show cause notices to be disposed of in accordance with the judgment in Canon - II.In conclusion, the Court upheld the validity of show cause notices issued by DRI officials under Section 28 of the Customs Act, 1962, and directed pending matters to be adjudicated based on the Supreme Court's directions in Canon - II. The judgment clarified the jurisdiction of proper officers and validated actions taken under the Finance Act, 2022.