DRI officers have proper authority to issue show cause notices under Section 28 after validation

The Bombay HC disposed of a petition following the SC's review decision in Canon India case. The SC clarified that DRI officers are proper officers for issuing show cause notices under Section 28, after initially overlooking relevant notifications and legal provisions. The SC upheld the Validation Act empowering DRI officers to issue show cause notices. The petitioner was granted twelve weeks to file an appeal before CESTAT challenging the Order-in-Original dated 30th March, 2023. The court concluded that DRI officers, Customs Commissionerates, and other relevant officers have proper authority to issue show cause notices.

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The judgment issued by the Bombay High Court addressed a challenge to an Order-in-Original dated 30th March, 2023, which was initially pending due to a review petition before the Supreme Court. The Supreme Court, in its order dated 7th November, 2024, disposed of the review petition, clarifying that the Directorate of Revenue Intelligence (DRI) officers are considered "proper officers" for issuing show cause notices. The Court highlighted the administrative changes and legal provisions empowering DRI officers to issue such notices. The judgment also discussed Circulars and Notifications supporting the authority of DRI officers.The Court reviewed the decision in Canon India case and emphasized the jurisdiction of DRI officers to issue show cause notices under Section 28 of the Act, 1962. It differentiated the case from Sayed Ali and emphasized the statutory scheme and amendments. The judgment clarified that the review only pertained to the jurisdiction issue and not the limitation aspect. Additionally, the Court overturned the decision in Mangali Impex and endorsed the view in Sunil Gupta case regarding the exclusion of jurisdiction of other proper officers.Regarding the Finance Act, 2022, the Court upheld its retrospective validation of show cause notices under Section 28, deeming it constitutional. It specified that the validation was limited to the issues raised in the Canon India judgment review. The judgment affirmed the competence of DRI officers, Commissionerates of Customs, and other relevant officers as proper officers for issuing show cause notices under Section 28.The Court provided directions for pending cases challenging show cause notices issued by the mentioned officers. It outlined the process for High Courts, CESTAT, and appeals concerning jurisdiction issues. The judgment granted the Petitioner twelve weeks to appeal the Order-in-Original before CESTAT and instructed CESTAT to decide the appeal on its merits without considering the issue of limitation. It kept all contentions on merits open for consideration by CESTAT, except those concluded by the Supreme Court's decision.In conclusion, the Bombay High Court disposed of the Petition in accordance with the Supreme Court's order, granting time for appeal and providing guidelines for further proceedings related to show cause notices under Section 28. The judgment emphasized the authority of DRI officers and proper officers for issuing such notices, while also addressing the constitutional validity of the Finance Act, 2022.

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