SCN quashed for exceeding 90-day limitation period without proof of earlier notice receipt

The HC quashed a SCN issued by the appellant on grounds it exceeded the 90-day limitation period prescribed in regulations. While a prior SCN dated 02.12.2014 from Additional Director General, Directorate of Revenue Intelligence could qualify as an offence report, there was no evidence on record that the respondent was aware of or received this notice. Unlike precedent cases where notice copies were specifically marked to relevant authorities, no such marking was demonstrated here. The HC concluded that without proof of knowledge or receipt of the earlier SCN, the limitation period violation stood, and allowed the appeal quashing the impugned SCN.

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The case involves a customs broker, Thiru T. Shanmugasundaram, who was granted a customs broker license by the Commissioner of Customs in Tuticorin. Shanmugasundaram faced allegations of irregularities in the operation of his customs broker branch in Chennai, leading to the prohibition of his operations in Chennai. A show cause notice was issued to him under Regulation 20(1) of Customs Brokers Licensing Regulations, 2013, calling for an explanation as to why his license should not be revoked and penalties imposed. Shanmugasundaram challenged this notice in a writ petition, which was initially allowed by a Single Judge but was appealed by the Commissioner of Customs, Tuticorin.The key issue in the case was whether the show cause notice was issued within the prescribed 90-day period as per Regulation 20(1). The Court considered the interpretation of "offence report" and the timing of the notice issuance in light of previous judgments. The Court referenced a previous decision by Justice V. Ramasubramanian regarding the definition of "offence report" and the commencement of the 90-day period for issuing the notice.The Court found that the show cause notice dated 02.12.2014 could qualify as an offence report, but there was no evidence that Shanmugasundaram was aware of this notice. The Court highlighted the importance of the authority being in receipt or knowledge of the offence report for the 90-day period to commence. Unlike previous cases where the notices were issued after the expiry of 90 days, in this case, there was no evidence of the notice being time-barred. Therefore, the Court held that the Single Judge erred in allowing the writ petition, and the appeal by the Commissioner of Customs was allowed.In conclusion, the Court set aside the Single Judge's order and allowed the writ appeal, leaving the issue of limitation open. The Court did not award any costs and closed the connected miscellaneous petition.

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