2017 (12) TMI 906 - HC - Customs

Delay in adjudication of SCN - delay of 15 years - call book - whether there is no deliberate or malafide attempt on the part of the respondents in not adjudicating the show cause notice? Held that - Unless and until the Revenue establishes that there is a law mandating taking cognizance of these procedural requirements or these procedural requirements have been engrafted into the applicable legislation so as to enable the Revenue/Department to seek extension of time, in writ jurisdiction, we are not obliged to take notice of these procedural delays at the end of the Revenue/Department. Accepting that case would defeat the rule of law itself - We have not found from any of these averments and statements in the affidavit that there was a bar or embargo, much less in law for adjudicating the show cause notice. This Court indulged the Revenue enough and by giving them an opportunity to file an additional affidavit. The additional affidavit as well, does not indicate as to why the Revenue took all these years, and after conclusion of the personal hearing in the year 2004, to pass the final order. The Revenue/Department has not been able to justify its lapse in not adjudicating the show cause notice issued on 28th March, 2002 for more than 15 years. There may be reasons enough for the Revenue to retain some matters like this in the call book, but those reasons do not find any support in law insofar as the present petitioner s case is concerned. Merely because there are number of such cases in the call book does not mean that we should not grant any relief to the petitioner before us - petition allowed.

Issues Involved:
1. Legality of the impugned letter dated 7th September 2017.
2. Delay in adjudication of the show cause notice issued on 28th March 2002.
3. Petitioner's compliance with duty liability and its implications.
4. Respondents' justification for the delay and procedural aspects.
5. Applicability of prior judicial decisions on the case.

Issue-wise Detailed Analysis:

1. Legality of the Impugned Letter:
The petitioner sought a writ of mandamus directing the respondents to withdraw the letter dated 7th September 2017, which called for a personal hearing in furtherance of a show cause notice from 2002. The impugned letter was seen as a continuation of the show cause notice process, which the petitioner argued was unjust due to the significant delay.

2. Delay in Adjudication:
The petitioner highlighted that the show cause notice was issued on 28th March 2002, and after a personal hearing in 2004, there was no further communication for over 15 years. The petitioner argued that this delay caused serious prejudice as they no longer had records or personnel to defend against the allegations. The court emphasized that adjudication should be within a "reasonable time," referencing previous judgments where long delays were deemed unreasonable.

3. Petitioner's Compliance with Duty Liability:
The petitioner had voluntarily deposited the duty liability amounting to ?3,33,37,598.92 before the issuance of the show cause notice. The petitioner did not seek a refund, indicating no prejudice to the Department. The court noted that despite this compliance, the respondents had an obligation to adjudicate the notice expeditiously.

4. Respondents' Justification for the Delay:
The respondents cited the pending Supreme Court case involving similar issues and the practice of maintaining a "call book" for dormant cases as reasons for the delay. However, the court found these reasons insufficient, noting that there was no legal bar preventing the adjudication of the show cause notice. The court stressed that procedural delays within the Department could not justify the prolonged inaction.

5. Applicability of Prior Judicial Decisions:
The court referred to its consistent view in previous cases, such as Lanvin Synthetics Private Ltd. vs Union of India, where long delays in adjudicating show cause notices were deemed unreasonable. The court reiterated that the absence of a statutory limitation period does not permit indefinite delays, emphasizing the need for adjudication within a reasonable period to uphold the rule of law.

Conclusion:
The court concluded that the respondents failed to justify the 15-year delay in adjudicating the show cause notice. It quashed the notice and all related proceedings, stating that the decision applied only to the petitioners before the court. The respondents were allowed to proceed against other parties as permissible by law. The writ petition was thus successful, and the rule was made absolute without any order as to costs.

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