Court sets aside show cause notices issued without jurisdiction, emphasizing mandatory 90-day period in CBLR.

M/s Masterstroke Freight Forwarders Pvt. Ltd. Versus The Commissioner of Customs (Imports), The Inquiry Officer/Assistant Commissioner of Customs

M/s Masterstroke Freight Forwarders Pvt. Ltd. Versus The Commissioner of Customs (Imports), The Inquiry Officer/Assistant Commissioner of Customs - 2016 ... Issues Involved:

1. Maintainability of writ petitions challenging show cause notices.
2. Whether the period of 90 days prescribed in Regulation 20(1) of CBLR, 2013 is 'directory' or 'mandatory'.
3. Whether the notices have been issued beyond the stipulated time.

Issue-wise Detailed Analysis:

1. Maintainability of Writ Petitions Challenging Show Cause Notices:

The court considered whether the writ petitions challenging the show cause notices were maintainable. The petitioners argued that the notices were barred by law and issued without authority, thus invoking writ jurisdiction under Article 226. The respondents contended that the writ petitions were premature and that there was an alternative remedy available. The court referenced various judgments, including Siemens Ltd. vs. State of Maharashtra and Oryx Fisheries Private Ltd. vs. Union of India, which established that a writ petition is maintainable if the notice is issued without jurisdiction, beyond the prescribed period, with a prejudiced mind, or as an abuse of process of law. The court concluded that the writ petitions were maintainable as the notices were allegedly barred by law and issued with a predetermined mind.

2. Whether the Period of 90 Days Prescribed in Regulation 20(1) of CBLR, 2013 is 'Directory' or 'Mandatory':

The petitioners argued that the 90-day period prescribed in Regulation 20(1) is mandatory, relying on various judgments, including A.H. Ahamed & Co. vs. Commissioner of Customs (Imports) Chennai and Babu Verghese and others vs. Bar Council of Kerala, which emphasized that when a statute prescribes a thing to be done in a particular manner, it must be done in that manner. The respondents contended that the period is directory, citing judgments like Dattatraya Moreshwar vs. The State of Bombay and P.T. Rajan vs. TPM Sahir, which suggest that procedural provisions may be construed as directory if no prejudice is caused. The court concluded that the time limit prescribed in Regulation 20(1) is mandatory, emphasizing that the use of the term 'shall' indicates a mandatory requirement, and non-compliance would defeat the purpose of the regulation.

3. Whether the Notices Have Been Issued Beyond the Stipulated Time:

The court examined whether the notices were issued beyond the stipulated 90-day period. The respondents raised several objections, including the exclusion of weekends and holidays, the start date being the receipt of the offense report, and waiver of the period by the petitioners. The court rejected these objections, stating that the statute does not prescribe the exclusion of non-working days, and the period starts from the date of knowledge of the offense. The court also found no evidence of waiver by the petitioners. Consequently, the court held that the notices were issued beyond the stipulated time, rendering them without jurisdiction.

Conclusion:

The court allowed the writ petitions, setting aside the impugned orders and notices in all the writ petitions. The court also set aside the suspension order in WP.No.8946/15, concluding that no further proceedings could be initiated under Regulation 20.