2025 (3) TMI 1326 - HC - Customs

Failure to adjudicate SCN - whether a SCN issued by the Customs Department which has remained unadjudicated for a long period of time in excess of ten years in the present case should be quashed only on such ground? - HELD THAT - This Court finds that the notice issued by the Joint Director General Foreign Trade Ahmedabad is substantially similar to the impugned show cause notices issued by the Customs Authority. This Court finds that even if the merits of the impugned show cause notice are not gone into to compare the similarity with the show cause notice dated 13.04.2010 issued by the Joint Director General Foreign Trade Ahmedabad the fact remains that the impugned show cause notices dated 08.03.2010 and 03.11.2011 in spite of personal hearings in the same having been granted in 2012 are yet to be adjudicated. This Court in Dhultawala Exim 2025 (1) TMI 1532 - GUJARAT HIGH COURT relied upon several decisions of various High Courts including this Court and it was held that In the case of Siddhi Vinayak Syntex Pvt. Ltd. v. Union of India 2017 (3) TMI 1534 - GUJARAT HIGH COURT held that a matter cannot be revived after 17 years when there is no appropriate reason for the delay and hence the Show Cause Notice was quashed. Conclusion - The impugned SCNs have remained pending for more than 15 years and 13 years respectively. Considering the aforesaid decisions this Court has no hesitation in holding that due to an inordinately long lapse of time the impugned show cause notices dated 08.03.2010 and 03.11.2011 can no longer remain pending for adjudication and must be quashed and set aside on that score alone. Petition allowed.

Summary

The core legal question addressed in this judgment is whether a show cause notice issued by the Customs Department, which has remained unadjudicated for a period exceeding ten years, should be quashed solely on the grounds of such delay.

The relevant legal framework involves the Customs Act, 1962, particularly Section 111(o) and Section 28, which pertain to the confiscation of goods and recovery of duties, respectively. The Court also considered precedents from various High Courts on the issue of delayed adjudication of show cause notices.

The Court's interpretation and reasoning focused on the principle that prolonged inaction on the part of the adjudicating authority without justifiable reasons can lead to the quashing of show cause notices. The Court emphasized the need for timely adjudication to prevent prejudice to the parties involved.

Key evidence and findings include the fact that the show cause notices dated 08.03.2010 and 03.11.2011 remained unadjudicated despite personal hearings being granted in 2012. The Petitioners argued that similar issues had already been adjudicated in their favor by the Joint Director General of Foreign Trade, which supported their claim that the Customs Department's delay was unjustified.

The Court applied the law to the facts by drawing parallels with the case of M/s. Dhultawala Exim Private Ltd. Vs. Union of India & Anr., where a similar delay led to the quashing of show cause notices. The Court noted that the respondents did not provide any compelling reasons for the delay in adjudication.

In addressing competing arguments, the Court considered the respondents' inability to refute the applicability of the Dhultawala Exim case to the present matter. The Court also noted that the Petitioners had already been exonerated in parallel proceedings conducted by the Joint Director General of Foreign Trade.

The significant holdings of the Court included the affirmation of the principle that inordinate delays in adjudication without valid reasons are grounds for quashing show cause notices. The Court cited several precedents that supported this view, including decisions from the Gujarat, Bombay, Delhi, and Orissa High Courts.

The core principles established by the Court are the necessity of timely adjudication of show cause notices and the requirement for authorities to provide justifiable reasons for any delays. The final determination was that the show cause notices dated 08.03.2010 and 03.11.2011 were quashed due to the excessive delay in adjudication, and the rule was made absolute to that extent.