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2019 (8) TMI 397 - HC - CustomsValidity of SCN issued after undue delay - time limitation - whether the impugned SCN issued to the two Petitioners ought not to be quashed on the ground of delay? - HELD THAT - The Court finds that the decision of the STATE OF PUNJAB VERSUS BHATINDA DISTRICT CO-OP. MILK P. UNION LTD. 2007 (10) TMI 300 - SUPREME COURT supports the case of the Petitioners. It holds that even where there is no prescribed period of limitation for completing an assessment, it does not mean that the power can be exercised at any time. It had to be exercised within a reasonable period and what is reasonable would depend on the nature of the statute, the rights and liabilities thereunder and other relevant factors. In the present case, the delay of over nine years and over five years in issuing the SCNs have not been satisfactorily explained by the Respondents. SCN quashed - petition allowed.
Issues:
1. Delay in issuance of show cause notices (SCNs) under the Customs Act, 1962. 2. Quashing of impugned SCNs based on the ground of delay. 3. Interpretation of Drawback Rules and the absence of a prescribed period of limitation. 4. Applicability of the principle of reasonable time in initiating proceedings. Analysis: 1. The main issue in this case revolved around the delay in issuing the show cause notices (SCNs) under the Customs Act, 1962. The SCNs were issued to the Petitioners regarding foreign exchange remittances for exports made in previous years, demanding the return of the drawback amount availed due to certain shipping bills being left out in earlier notices. 2. Two separate writ petitions were filed challenging the validity of the SCNs on the ground of delay. In one case, the court directed that no further proceedings shall take place pursuant to the impugned SCN, while in the other case, the adjudication proceedings were stayed till the next date of hearing. 3. The Respondents failed to provide a satisfactory explanation for the delay in issuing the SCNs, despite being granted opportunities to do so. The court noted that even though the Drawback Rules did not specify a limitation period, the question of whether the notices were issued within a reasonable period arose. 4. The Petitioners relied on various legal precedents to argue that actions under the Drawback Rules must be taken within a reasonable time, even if no specific limitation period is prescribed. The Respondent, on the other hand, cited judgments supporting their case, but the court found them distinguishable on facts. 5. Ultimately, the court referred to the decision of the Supreme Court in a relevant case to emphasize that the power to issue notices must be exercised within a reasonable period. In this case, the delay of over nine years and five years in issuing the SCNs was not satisfactorily explained by the Respondents, leading the court to quash both impugned SCNs and allow the writ petitions. 6. The judgment highlighted the importance of acting within a reasonable time in legal proceedings, especially in the absence of a prescribed limitation period. The decision serves as a reminder of the significance of timely actions in upholding the principles of justice and fairness in legal matters.
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