2023 (4) TMI 881 - HC - Customs

Customs Broker License appeal dismissed for delays in filing and prosecuting. Emphasis on diligence in government duties.

Commissioner Of Customs Versus Sadanand Chaudhary

The appeal against punitive measures imposed on a Customs Broker License was dismissed due to delays in filing and prosecuting the appeal. The Court found ... Condonation of delay in filing appeal - Sufficient cause for delay exists or not - Punitive measures imposed on the respondent’s Customs Broker License under the Customs Broker Licensing Regulations, 2013 reduced to forfeiture of the security deposit - failure to verify the antecedents and correctness of the Import-Export Code No., identity of his client and functioning of his client at the declared address - over-valuation of consignment imported for making fraudulent drawback claims. Whether the delay in filing the same is required to be condoned? - HELD THAT:- The application seeking condonation of delay is bereft of any particulars. Apart from making a bald statement that the impugned order was misplaced because the office of the counsel of the appellant was under renovation and was found subsequently, no further details are provided - This Court finds it difficult to accept the aforesaid explanation. It is also not possible for this Court to countenance the procedure, where the Department is clueless whether an appeal has been filed or not; and apparently, remains sanguine once instructions to file have been given to the counsel. It is also relevant to note that there is a substantial delay of 109 days in re-filing the appeal as well. It is stated that after the appeal was filed, the appeal memo was returned by the Registry with certain objections. The delay in re-filing was due to the fact that “some of the appeal papers got misplaced which included the affidavit accompanying the appeal”. In the process of locating the appeal papers, there occurred some delay in re-filing the appeal with the Registry of this Court - it is also seen that there has been an inordinate delay in the prosecuting the present appeal as well. The notice in the present appeal was issued on 18.12.2019, however, the respondent could not be served. The hearings were adjourned thereafter on account of truncated functioning of the Court due to the outbreak of Covid-19. The present appeal was listed on 25.04.2022, however, none appeared for the appellant on that date. This Court finds no reason to condone the delay in filing the appeal or re-filing the same - Appeal dismissed. ISSUES PRESENTED AND CONSIDERED 1. Whether the delay of 307 days in filing the appeal and a further delay of 109 days in re-filing are liable to be condoned where the explanation is that the impugned order and appeal papers were 'misplaced' during office renovation and registry objections respectively. 2. What standard of explanation is required from a government/departmental appellant when seeking condonation of delay in statutory appeals, and whether routine or bald explanations suffice. 3. Whether persistent failure to effect service on the respondent and to take steps for correct service, including during the period of pandemic disruptions, justifies dismissal of the appeal for want of prosecution. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Condonation of inordinate delay in filing and re-filing the appeal Legal framework: Courts have inherent and statutory discretion to condone delay in filing appeals where sufficient cause is shown; the onus is on the applicant to provide a satisfactory, proximate and credible explanation for each day of delay. Particularity and documentary support for the explanation are material considerations in exercising the discretion. Precedent treatment: The Court relied on and applied the principle that government departments are under a special obligation to act diligently when filing appeals and cannot expect liberal indulgence for routine procedural lapses. The decision of the Supreme Court emphasizing strict scrutiny of explanations tendered by government bodies for delay was followed in principle. Interpretation and reasoning: The Court examined the stated reasons - (a) that the impugned order was misplaced due to counsel's office renovation and was found later, and (b) that appeal papers were misplaced after registry objections - and found them bald, lacking particulars, and unsupported by contemporaneous material. The Court rejected the suggestion that mere procedural red tape or inadvertence by departmental officers suffices as reasonable cause. The Court treated the department's lack of record, lack of particulars around custody and steps taken, and the extended gaps as fatal to the explanation. Ratio vs. Obiter: Ratio - When a government/departmental appellant seeks condonation of an inordinate delay, bare assertions of misplacement or office renovation without particulars or supporting material do not constitute sufficient cause; the court should refuse condonation. Obiter - The Court's pointed remarks about administrative complacency and the department being 'clueless' about whether an appeal has been filed are explanatory but reinforce the ratio. Conclusion: The explanation for the 307-day and 109-day delays was insufficient; the applications for condonation of delay were rightly rejected and the appeal could not be entertained on merits. Issue 2 - Standard of diligence required from government/departmental appellants Legal framework: Government bodies and their instrumentalities are subject to the same law of limitation as private litigants but are held to a higher standard of institutional diligence; condonation is an exception and should not be routinely granted to public authorities. Precedent treatment: The Court expressly followed the guiding principle from higher authority that government departments must tender reasonable and acceptable explanations with evidence of bona fide efforts; generalizations about procedural red tape are unacceptable. Interpretation and reasoning: The Court applied the heightened standard to the facts - the appellant failed to show bona fide, reasonably documented efforts to trace or secure the impugned order or appeal papers; there was no chronology of actions, no affidavits from responsible officers explaining custody of files, and no demonstration of steps taken promptly after discovery of misplacement. The Court also noted further lapses in subsequent prosecution (see Issue 3), which cumulatively demonstrated lack of diligence. Ratio vs. Obiter: Ratio - Government departments must provide detailed, credible, and supported explanations for delay; mere assertions of misplacement or renovation will not suffice. Obiter - Emphatic language cautioning government agencies against treating condonation as an anticipated benefit. Conclusion: The heightened diligence standard applied; the appellant failed to meet it; therefore, condonation was appropriately refused. Issue 3 - Failure to effect service on respondent and failure to prosecute the appeal Legal framework: An appellant must ensure proper service on respondents and must prosecute appeals with reasonable expedition; prolonged inaction or failure to provide accurate addresses or to comply with registry directions can justify dismissal. Precedent treatment: The Court applied established practice that non-service and failure to comply with directions for service, particularly when the appellant is responsible for providing correct details, undermine the viability of the appeal and may support dismissal. Interpretation and reasoning: The Court observed that notices were not served due to appellant's inaction - incorrect addresses were supplied, no steps were taken when initial service attempts failed, and despite adjournments relating to pandemic restrictions, the appellant did not remedy service deficiencies. The Court treated these lapses as additional indicia of lack of bona fide prosecution and administrative indolence, reinforcing refusal to condone initial filing delays. Ratio vs. Obiter: Ratio - Persistent failure by an appellant to secure service on the respondent and to take proactive steps when service fails is a proper ground for dismissal or refusal to extend indulgence. Obiter - Reference to pandemic-related adjournments as contextual but not excusing the appellant's broader inaction. Conclusion: Because no valid service was ever effected and the appellant failed to prosecute the appeal diligently, dismissal of the appeal was justified in addition to refusal of condonation. Ancillary observation on merits (limited and non-decisional) Legal framework and reasoning: The Court noted the appellant's contention that the tribunal's reduction of punitive measures to forfeiture of security alone may have been impermissible under the regulations and referred to an earlier coordinate decision that addressed standards for culpability of customs brokers. However, because the appeal was dismissed on procedural grounds (delay, lack of service, failure to prosecute), the Court did not adjudicate the substantive merits. Ratio vs. Obiter: Obiter - Any observations touching upon the substantive regulatory issue remain non-decisional since the Court declined to reach merits due to procedural infirmities. Conclusion: The Court did not decide the substantive controversy regarding permissible penalties under the licensing regulations; procedural defects led to dismissal.