High Court Questions Customs Director's Authority to Issue Notices

The High Court raises doubts about the authority of the Additional Director General of Directorate of Revenue Intelligence to issue show cause notices under the Customs Act. It questions the validity of the appointment as Commissioner of Customs and decides to issue notices to the respondents for further proceedings. The Court also restrains any consequential steps based on the impugned notice until the next hearing date.

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Issues: Challenge to show cause notice under Customs Act, 1962 by Additional Director General of Directorate of Revenue Intelligence - Jurisdiction of officer to issue notice - Validity of appointment as Commissioner of Customs.

Analysis:

Issue 1: Challenge to show cause notice under Customs Act, 1962
The writ petition challenges a show cause notice dated 27.06.2020 issued by the Additional Director General of Directorate of Revenue Intelligence, Hyderabad Zonal Unit. The notice seeks to confiscate gold bars and impose penalties under various sections of the Customs Act, 1962. The petitioner argues that the Additional Director General is not an 'Officer of Customs' and therefore lacks the authority to issue such a notice without the approval of an officer of Customs not below the rank of an Assistant Commissioner. The petitioner relies on Section 124 of the Act, which mandates that notices must be issued by authorized customs officers.

Issue 2: Jurisdiction of officer to issue notice
The petitioner's counsel refers to relevant sections of the Customs Act, including Section 3 which outlines the classes of officers of customs, Section 4 which empowers the Central Board of Indirect Taxes and Customs to appoint customs officers, and Section 6 which allows the Central Government to entrust customs functions to other government officers. The counsel also cites a recent Supreme Court decision in CANON INDIA PRIVATE LIMITED vs. COMMISSIONER OF CUSTOMS, arguing that officers of the Directorate of Revenue Intelligence cannot be considered officers of Customs as per the law.

Issue 3: Validity of appointment as Commissioner of Customs
In response, the Additional Solicitor General argues that the Additional Director General has been designated as 'Commissioner of Customs' under Notification No.17/2002-Customs(N.T.) dated 07.03.2002. It is contended that the issue before the Supreme Court in the CANON INDIA case was different and that the Additional Director General has the authority to issue show cause notices under Section 124 of the Customs Act. The petitioner disputes this interpretation, referring to the Supreme Court's examination of the notification in the CANON INDIA case and asserting that the appointment as Commissioner of Customs is invalid.

In conclusion, the High Court finds that there are significant questions regarding the authority of the Additional Director General of Directorate of Revenue Intelligence to issue show cause notices under the Customs Act. The Court raises doubts about the validity of the appointment as Commissioner of Customs and decides to issue notices to the respondents for further proceedings. The Court also restrains any consequential steps based on the impugned notice until the next hearing date.

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