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TMI Blog2023 (3) TMI 250X X X X Extracts X X X X X X X X Extracts X X X X ..... rder dated 04.02.2019, the Commissioner had revoked the respondent's Customs Broker License (CB License No. R-59/DEL/CUS/2016 - hereafter 'the CB License'); directing forfeiture of the security deposit of Rs.5,00,000/-; and imposed a penalty of Rs.50,000/- on the respondent. 3. The question that falls for consideration of this Court is whether the learned Tribunal was correct in holding that a show cause notice under Regulation 20 of the Customs Brokers Licensing Regulations, 2013 (hereafter 'the CBLR') is required to be received by the customs broker within a period of ninety days of the receipt of the offence report and it is not sufficient that the notice is sent within the said period of ninety days. 4. The aforesaid question arises in the following context. 4.1 The respondent is a customs broker and at the material time was holding the CB License, which was valid up to 01.09.2026. The said license was issued under Regulation 7 of the CBLR. 4.2 It is alleged that certain goods, which were stored in custom bonded warehouses, were diverted to the domestic market without payment of customs duty. Further, forged and fabricated documents were prepared to show re-export of the wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within a period of ninety days of the offence report. Since, in the present case, the notice was received by the respondent on 28.08.2018, it was beyond the period of ninety days from the receipt of the offence report dated 10.05.2018 that was received by the Commissioner on 18.05.2018. 4.9 In the present case, the show cause notice was prepared on 10.08.2018 and was handed over to the postal authority on 14.08.2018 for being dispatched by 'speed post'. The postal authority had attempted to deliver the show cause notice to the respondent on 16.08.2018, 17.08.2018 and 18.08.2018 at its given address. The article was returned back with the remark of postal authority that "Bar Bar jane par band Milta Hai", which freely translated means that the premises were found closed on repeated visits. The show cause notice was served by hand to the respondent on 28.08.2018. Reasons and Conclusion 5. At the outset, it would be relevant to refer to Regulation 20(1) of the CBLR. The same is set out below. "REGULATION 20. Procedure for revoking license or imposing penalty.- (1) The [Principal Commissioner or Commissioner] of Customs shall issue a notice in writing to the Customs Broker within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Kundan Lal Behari Lal (1975) 4 SCC 844. In that case, the Supreme Court had referred to its earlier decision in the case of Banarsi Debi v. Income Tax Officer, District IV, Calcutta & Ors. (1964) 7 SCR 539., and the decision of the Allahabad High Court in Sri Niwas & Ors. v. The Income-Tax Officer 'A' Ward, Sitapur (1956) 30 ITR 381 and had accepted the proposition that the expression 'issued' and 'served' are used as inter-changeable terms in the legislative practice of our country. Accordingly, the Supreme Court held that the word 'issued' occurring in Section 18(2A) of the Wealth Tax Act, 1957 would mean 'served'. 8. Ms. Manish, learned counsel appearing for the respondent, had also referred to the decision of the Supreme Court in the case of Municipal Corporation of Delhi v. Dharma Properties Private Limited (2018) 11 SCC 230 as well as the decision of this Court in Purushottam Jajodia v. Directorate of Revenue Intelligence, New Delhi & Anr. 2014 SCC OnLine Del 3796, in support of the contention that the term 'issued', as used in Regulation 20(1) of the CBLR, is required to be considered as 'served' or 'received'. 9. The learned Tribunal had referred to the aforesaid decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itative or binding." 14. The plain reading of the word 'issue' is to set forth or to emit; it is not receipt or service. As stated above, the context in which the word 'issue' was used in Regulation 20(1) of the CBLR, the word 'issue' cannot be interpreted to mean 'serve' or 'receipt'. 15. In Webster v. Sharpe 116 N.C. 466, 21 S.E. 912 the Supreme Court of North Carolina had examined the meaning of the word 'issue' in the context of issuance of summons under Sections 199 and 161 of The Code of North Carolina (enacted March 2, 1883) and observed as under:- "An action is commenced by issuing a summons. Code, sec. 199. And an action is commenced when a summons is issued against a defendant. Code, sec. 161. This involves the question as to what is meant by the word "issue," and we are of the opinion that it means going out of the hands of the clerk, expressed or implied, to be delivered to the sheriff for service. If the clerk delivers it to the sheriff to be served, it is then issued; or if the clerk delivers it to the plaintiff, or some one else, to be delivered by him to the sheriff, this is an issue of the summons; or, as is often the case, if the summons is filled out by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment Year but the same was served beyond the period of eight years. One of the questions that arose for consideration of the court in that case related to the interpretation of Section 4 of the Indian Income Tax (Amendment) Act, 1959 (hereafter 'the Amending Act'). The object of the said Section was to save the validity of the notices which were issued beyond the prescribed time. Section 4 of the Amending Act used the word 'issue'. The court held that if the narrow meaning is given to the expression 'issue', the Section would be unworkable because the objective of the Amending Act was to save the validity of the notices issued under Section 34(1) of the Income Tax Act, 1922, which were beyond the period of eight years. It is in that context that the court held that the word 'issue' under Section 4 of the Amending Act was used interchangeably as 'served', as the object was to save the notices which were served beyond the period of eight years. The court held that it was obvious that the expression 'issue', as used in Section 4 of the Amending Act, was not used in a narrow sense of 'sent' as the principal Section 34(1) of the Income Tax Act, 1922 required the notice to be served with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bi and held that the notice under Section 149(1) of the Income Tax Act, 1961 was required to be served within the prescribed period of limitation. It is material to note that in this case, the notice was sent by registered post on 31.03.1970 and was received by the assessee on 03.04.1970. Section 149(1) of the Income Tax Act, 1961 stipulated that no notice under Section 148 of the Income Tax Act, 1961 would be issued in cases falling under Section 147(b) of the Income Tax Act, 1961 at any time subsequent to the expiry of four years after the expiry of the relevant Assessment Year. In this case, the assessment was sought to be reopened under Section 147(b) of the of the Income Tax Act, 1961 and the period of four years expired on 31.03.1970. As stated above, the High Court was of the view that the word 'issued' as used under Section 149(1) of the Income Tax Act, 1961 was required to be construed as served. Since the notice was served beyond the period of four years, the same was held to be beyond the period of limitation. The Supreme Court distinguished the decision in Banarsi Debi and held as under:- "Section 34 conferred jurisdiction on the Income Tax Officer to reopen an assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity in the language of Regulation 20(1) of the CBLR. It requires that the Commissioner issues a notice within the period of ninety days from the receipt of the offence report. There is, thus, no reason to construe the expression 'issue' any different from its plain meaning. The decision of the Supreme Court in R.K. Upadhyaya8 also recognizes that the plain meaning of the expression 'issuance of notice' would be to dispatch the same. 22. It is also relevant to refer to the decision of the Coordinate Bench of this Court in Mayawati v. CIT, Delhi (Central-I) & Ors. 2009 SCC OnLine Del 336. In that case, this Court had observed as under:- "6. In stark contrast, Section 149 of the IT Act speaks only of the issuance of a notice under the preceding Section within a prescribed period. Section 149 of the IT Act does not mandate that such a notice must also be served on the assessee within the prescribed period." 23. The said decision clearly supports the view that there is a distinction between issuance of notice and service of notice and the words 'issue' and 'serve' are not synonymous. The said words may be construed as interchangeable only if the context of the statute makes it neces ..... X X X X Extracts X X X X X X X X Extracts X X X X
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