Unreasonable 12-15 year delay in finalizing provisional customs assessments: importer gets ad-interim relief against show cause notice

HC, at the ad-interim stage, found prima facie merit in the petitioner's challenge to the SCN seeking finalization of provisional assessments of Bills of Entry dated August 2010 to September 2013. The court held that a delay of about 12-15 years in finalizing provisional assessments is ex facie unreasonable, especially when it renders it practically impossible for the importer to produce end-use evidence after such a long period. Considering these factors, HC granted ad-interim relief in favour of the petitioner and listed the matter for further hearing on 8 January 2026.

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1. ISSUES PRESENTED AND CONSIDERED

(1) Whether, prima facie, the initiation of proceedings to finalize provisional assessments of Bills of Entry after a delay of about 12-15 years is impermissible as being beyond a reasonable period, warranting ad-interim restraint on further action under the impugned show cause notice.

(2) Whether the Petitioner has established a sufficient prima facie case, balance of convenience, and likelihood of irreparable prejudice to justify ad-interim relief restraining the authorities from proceeding further pursuant to the impugned show cause notice.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (1): Delay in finalisation of provisional assessment and reasonable period

Interpretation and reasoning

(a) The show cause notice seeks to finalize provisional assessments for Bills of Entry dated between August 2010 and September 2013, proposing re-classification and recovery of differential duty with interest under Section 18 of the Customs Act, 1962.

(b) The Court noted that the Jharkhand High Court, in a considered decision, after examining various circulars, held that provisional assessments of Bills of Entry "ought to be finalized within a reasonable period," and that such reasonable period would be "approximately 5 years."

(c) The Court recorded that in the present matter there is a delay of approximately 12 to 15 years in seeking to finalize the provisional assessments, which is substantially beyond the period considered reasonable by the Jharkhand High Court.

(d) The Court also found force, at least prima facie, in the contention that requiring the Petitioner, after 15 years, to furnish proof of end use of the imported goods by its customers would be practically impossible.

Conclusions

(e) The Court, on a prima facie assessment, accepted that there is considerable delay in finalizing the provisional assessments and that such delay, coupled with the impracticability of furnishing end-use proof after 15 years, supports the Petitioner's challenge for the purpose of interim relief.

Issue (2): Existence of prima facie case, balance of convenience, and grant of ad-interim relief

Interpretation and reasoning

(a) Taking into account the Jharkhand High Court's view on the requirement to finalize provisional assessments within a reasonable period (approximately 5 years) and the factual delay of about 12-15 years in the present case, the Court held that there is "considerable force" in the submissions advanced on behalf of the Petitioner.

(b) The Court also accepted, prima facie, that the requirement to now produce end-use evidence for imports made 12-15 years earlier would impose an onerous and practically impossible burden on the Petitioner.

(c) On these considerations, the Court held that the Petitioner has made out a "strong prima facie case" for grant of ad-interim relief and further held that, in the facts of the case, the "balance of convenience lies in favour of the Petitioner."

Conclusions

(d) The Court granted ad-interim relief in terms of the Petitioner's prayer restraining the authorities from taking any steps or proceedings pursuant to and in furtherance of the impugned show cause notice, including finalisation of the assessment of the Bills of Entry listed therein.

(e) The ad-interim relief is directed to operate until further orders, with timelines fixed for filing affidavit-in-reply and affidavit-in-rejoinder and the matter directed to be listed on a specified future date.

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