Time-limits for pending Customs Act show-cause notices u/s28(9)/(9A) upheld; unadjudicated notices treated as lapsed, quashed.

Amended s.28(9) and newly inserted s.28(9A) of the Customs Act, 1962 were examined to determine whether long-pending show cause notices must be adjudicated within the amended limitation regime. The HC held that the amendment is not retrospective but is retroactive, thereby applying mandatory time-limits to pending notices by treating them as issued on 29.03.2018. Under s.28(9), an order must be passed within one year, extendable by a further year by a senior officer; under s.28(9A), the extended period runs from cessation of specified impediments only if reasons are communicated. As neither extension nor s.28(9A) was invoked and no adjudication occurred within time, the notices lapsed and were quashed; the petitions were allowed.

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Issues Involved:
1. Jurisdiction of the Directorate of Revenue Intelligence (DRI) to issue Show Cause Notices.
2. Limitation and delayed adjudication of the Show Cause Notices.

Detailed Analysis:

1. Jurisdiction of the Directorate of Revenue Intelligence (DRI) to issue Show Cause Notices:
The petitioners, partnership firms importing non-edible oil, challenged the Show Cause Notices issued by the DRI on the grounds that the DRI officials were not "proper officers" as per Section 2(34) of the Customs Act, 1962. The respondent DRI justified the issuance of the notices, stating that the functions of a proper officer had been assigned to DRI officials through the Customs (Amendment and Validation) Act, 2011. Despite this, the court found that the DRI's jurisdiction to issue these notices was under question, especially since the Supreme Court had issued notices in related cases, indicating ongoing legal uncertainty.

2. Limitation and delayed adjudication of the Show Cause Notices:
The petitioners also argued that the Show Cause Notices were not adjudicated within a reasonable period, citing the amended Section 28(9) of the Customs Act, 1962, which mandates adjudication within one year from the date of notice, extendable by one more year under specific conditions. The court referenced its previous judgment in GPI Textiles Ltd. v. UOI, which quashed a Show Cause Notice under similar circumstances due to unreasonable delay. In the present case, the Show Cause Notices issued in 2009 remained unadjudicated for over ten years, far exceeding any reasonable period. The court emphasized that, as per the amended Section 28, the proper officer was bound to pass an order within one year from the date of the Show Cause Notice, or within an extended period if justified, which was not done here.

Retroactive Application of Amended Section 28:
The court applied the principle of retroactive amendment, treating the pending Show Cause Notices as if issued on 29/03/2018, the date when the amendment came into force. This meant that the respondents were required to adjudicate the notices by 28/03/2019, which they failed to do. The court cited previous judgments, including Ballarpur Industries Ltd. v. State of Punjab, to support the retroactive application of procedural amendments, concluding that the notices had lapsed due to non-compliance with the amended provisions.

Conclusion:
The court allowed the petitions, quashing the Show Cause Notices dated 19/03/2009 and 20/02/2009, on both counts: the application of the GPI Textiles judgment and the retroactive application of the amended Section 28 of the Customs Act, 1962. The decision underscores the necessity for timely adjudication of Show Cause Notices and clarifies the jurisdictional authority of the DRI under the amended legal framework.

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