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2024 (11) TMI 622
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....sonal Hearing Notice F No. S/10-19/2002 Adj. Part-III dated 19.06.2024: b) issue a writ of Certiorari or a writ of prohibition or any other appropriate writ to quash the Personal Hearing Notice F No. S/10-19/2002 Adj. Part-III dated 19.06.2024: c) issue a writ of prohibition or any other appropriate writ, restraining the Respondent No. 3 to proceed to adjudicate the Show Cause Notice No. F. No. DRI/MZU/D/25/ 2001 dated September 2003: d) Till disposal of petition, grant a stay against adjudication of Show Cause Notice No. F. No. DRI/MZU/D/25/2001 dated September 2003:" 4. Case of the Petitioners: Petitioners, by the present Petition, challenge the Show Cause Notice issued vide File No. DRI/MZU/D/25/Esjaypee/2001 dated 24.09.2003 ('the impugned SCN') and Personal hearing Notice bearing F No. S/10-19/2002 Adj. Part-III dated 19.06.2024 ('PH Notice dated 19.06.2024'). The case as set out by the Petitioners in the Petition, inter alia, is that the Petitioner No.1 is a private limited company whereas the Petitioner No. 2 is the Director; that the Respondent No. 2 in its investigation alleged undervaluation of import of cloves of foreign origin, declar....
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....ated 10.09.2008, holding that the OIO was passed in violation of principles of natural justice and, on such conclusion, set aside the OIO and remanded the matter to the Respondent No.3 to pass an order within a period of 6 months from the date of receipt after granting an opportunity of personal hearing to the Petitioners; that the Respondent No.3 failed to comply with the directions of the learned Tribunal; That Respondent No.3 after a lapse of more than 16 years from the date of order of the learned Tribunal (order dated 10.09.2008 passed in Appeal No. A/522 to 524/08/CSTB/C-II) and more than 24 years from the date of import, issued a personal hearing notice dated 27.05.2024 to the Petitioners fixing appearance on 19.06.2024; that the Petitioners sought for an adjournment requesting relevant papers to examine the legality of the personal hearing notice; that upon the request, the Respondent No.3 furnished documents most of which were handwritten and illegible. It is the Petitioners' case that the personal hearing notice issued in respect of the impugned SCN has caused irretrievable prejudice to the Petitioners, as the same is issued after an inordinate lapse of time and upo....
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....07.2024, 19.06.2024 and 08.08.2024 for personal hearing are for de novo adjudication of the impugned SCN and that the Petitioners would be offered just and proper opportunity of hearing by following the principles of natural justice; that in the event the Adjudicating Authority passing an adverse order, the Petitioners would have an alternate remedy of filing the statutory appeal before the Appellate Authority; That the Petitioners have intentionally evaded the Customs duty by way of undervaluation with the help of Indenting Agent; that though the learned Tribunal vide order dated 10.09.2008 remanded the matter for fresh adjudication to the Adjudicating Authority to be completed within 6 months of receiving the orders, the Petitioners who were Appellants therein being under the directions to file their response upon inspection of the documents within a period of 4 weeks, failed to do so, and, as such, according to the Respondent No. 2, the Petitioners acted contrary to the directives issued by the learned Tribunal; That the Respondent No. 2 at page 124 of the paper-book in the list of dates and events has made reference to the dates from the time of issuance of the impugned S....
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....f their own wrong. Respondent No. 2 has relied on the provisions of Section 28(9) of the Finance Act, 2018 which came into effect on 29.03.2018, to support their case with reference to the limitation for disposal of show cause notices; that Respondent No. 2 referred to the judgments of the Hon'ble Supreme Court. After that, Respondent No. 2 has dealt with the Petitioners' contentions on merits. Based on the case set out in the reply, the Respondents prayed for the dismissal of the Petition. Submissions: 7. Mr Pratyushprava Saha, learned Counsel appearing for the Petitioners at the outset, submits that the Petitioners restrict their challenge to the personal hearing notice, i.e. PH Notice dated 19.06.2024 and the impugned SCN only in respect of the ground of inordinate delay in disposal of the show cause notice. Other challenges thrown in the petition were not pressed or urged by Mr Pratyushprava Saha. 8. Mr Saha submits that the adjudication of the impugned SCN is delayed by 24 years from the date of import and 16 years from the date of the order dated 30.11.2007 passed by the learned Tribunal in Case No. A/522 to524/08/CSTB/C-II. It is the submissions of Mr Saha that due ....
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....reply filed by Respondent No. 2. The Petitioners, in their rejoinder, have inter alia contended that on account of a gap of almost 23 years in the disposal of the transaction, it would be impossible for someone to recall events truthfully after 23 years; that the opportunity of personal hearing on 04.12.2014 was a futile exercise; that the personal hearing notice challenged in the Petition is issued as per Section 28 of the Customs Act as it stood post 2018; that the Respondents were party to the proceedings before the Tribunal and therefore, submissions on non-receipt of the order dated 10.09.2008 would be baseless; 14. The Counsel for the Petitioners also emphasised that the order of the Tribunal was dictated in the open Court and also published in the leading Case Reporter; that the Petitioners had not disputed the jurisdiction of the DRI and, therefore, reliance placed by the Respondents in the case of Mangali Impex Ltd., v/s. Union of India 2016 (335) E.L.T. 605 (Delhi) or Canon India Pvt. Ltd. V/s. Commissioner of Customs 2021 (376) E.L.T. 3 (S.C.) was misplaced; that the circulars/instructions and or reliance placed by the Respondents on CBIC instructions were misplaced a....
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....g fixed on 19.06.2024. The Petitioners approached this Court by the above-said Petition on 08.07.2024 (as per the date mentioned on the memo of Petition). Again, there is no record of the Petitioners ever being intimated about transferring the matter to the call book. 18. Thus, the records would indicate that Respondent No.3 was under directions to dispose of the proceedings within 6 months from the date of receipt of the order dated 10.09.2008 passed in Case No. A/522 to 524/08/CSTB/C-II. The Respondents have contended that though the learned Tribunal had issued the directions, the directions were also to the Petitioners to approach the Adjudicating Authority within four weeks from 10.09.2008 to seek inspection of the documents and after that, within four weeks of such inspection being made, to file their reply. According to the Respondents, the Petitioners have not complied with the directions. According to the Respondents, the Petitioners cannot make a grievance of the Respondents having not adhered to directions contained in the order dated 10.09.2008. 19. We cannot accept such contention on behalf of the Respondents because the learned Tribunal fixed the directions for d....
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....ppeal can furnish no ground for not following it unless its operation has been suspended by a competent court. If this healthy rule is not followed, the result will only be undue harassment to assessees and chaos in administration of tax laws." 22. At any rate, in the event of any difficulty, it was always open to the Adjudicating Authority to apply for an extension of time or seek clarification from the learned Tribunal. Records do not indicate the Respondents/Adjudicating Authority having taken recourse to the same. Respondent No. 2, relying on the letter dated 13.11.2014 at Exhibit 2, contended that the CESTAT order was never received. The Chief Commissioner's Office learned about the pendency of the proceedings much later. 23. The above contention cannot be accepted because the Respondents were parties to the proceedings bearing Case No. S/522 to 524/08/CSTB/C-II as evident from the order dated 10.10.2008, which is at Exhibit-E page 93 to 98 of the paper-book. The fact that the order was dictated in open Court is also not contested. We, therefore, find that the delay from 10.09.2008 till the year 2014 is inordinate and there is no justification much less any legally tenab....
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....riously nullify the noticee's rights causing irreparable harm and prejudice to the noticee. A protracted administrative delay would not only prejudicially affect but also defeat substantive rights of the noticee. In certain circumstances, even a short delay can be intolerable not only to the Department but also to the noticee. In such cases, the measure and test of delay would be required to be considered in the facts of the case. This would however not mean that an egregious delay can at all be justified. This apart, delay would also have a cascading effect on the effectiveness and/or may cause an abridgement of a right of appeal, which the assessee may have. Thus, for all these reasons, delay in adjudication of show-cause notice would amount to denying fairness, judiciousness, non-arbitrariness and fulfilment of an expectation of meaningfully applying the principles of natural justice. We are also of the clear opinion that arbitrary and capricious administrative behaviour in adjudication of show-cause notice would be an antithesis to the norms of a lawful, fair and effective quasi-judicial adjudication. In our opinion, these are also the principles which are implicit in the....
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.... suffer an order to facilitate conclusion of the proceedings which, because of the inordinate delay in its conclusion, is most likely to work out prejudice to them. 16. Article 14 of the Constitution of India is an admonition to the State against arbitrary action. The State action in this case is such that arbitrariness is writ large, thereby incurring the wrath of such article. It is a settled principle of law that when there is violation of a fundamental right, no prejudice even is required to be demonstrated." 27. In the case of Eastern Agencies Aromatics (P) Ltd v/s. Union of India and Others. 2022 (12) TMI 323-Bombay, this Court in paragraphs 15 and 16 has held as under:- "15. We have perused the consistent view taken by this Court, that the concerned Authority is under an obligation to adjudicate upon the show cause with expediency. In our view, unreasonable and unjustified delay in adjudication of the show cause notice is in contravention of procedural fairness and is violative of principles of natural justice. 16. We find sufficient merit in the submissions made on behalf of the Petitioner that delay in adjudication of the show cause notice con....
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....tributable to the revenue would be in contravention of procedural fairness and thus violative of the principles of natural justice. The action, which is unfair, and in violation of principles of natural justice cannot be sustained. Various judicial pronouncements have taken a view that the weight of judicial pronouncements leaned in favour of quashing the proceedings if there had been an undue delay in deciding the same. In the absence of any period of limitation it is incumbent upon every authority to exercise the power of adjudication post issuance of show cause notice within reasonable period. 19. As held by this Court in Sanghvi Reconditioners Pvt. Ltd. (supra), that was relied upon by Mr. Shroff, when the revenue keeps the show cause notice in call book, then it should inform the parties about the same. It serves two purposes, i.e., (a) it puts the party to notice that the show cause notice is still alive and is only kept in abeyance which would enable the party concerned to safeguard the evidence till the show cause notice is taken up for adjudication; and (b) if the notices are kept in call book, the parties get an opportunity to point out to the r....
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.... logical conclusion by adjudicating upon the said show-cause notice within a reasonable period of time. In view of gross delay on the part of the respondent, the petitioner cannot be made to suffer. This Court accordingly was pleased to quash and set aside dated 16th September 2005 in that matter. The principles of law laid down by this Court in the above referred judgment would apply to the facts of this case. We are respectfully bound by the principles of law laid down by this Court in the said judgment. We do not propose to take a different view in the matter.' 32. This Court in the case of Raymond Ltd., v/s. Union of India at, paragraph 11 has held as under: - '11. Therefore, it was reasonable for the petitioners to proceed on the basis that the department was not interested in prosecuting the show cause notices and had abandoned it. These proceedings are now being commenced after such a long gap, after having led the petitioner to reasonably expect that the proceedings are dropped. Therefore, even if, notices can be kept in the call book to avoid multiplicity of the proceedings, yet the principle of natural justice would require that before the notices are kept in ....
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....iolates principles of natural justice. The principles of natural justice are now accepted as concomitants of the right to non-arbitrariness guaranteed by Article 14 of our Constitution. Any action which is unfair and in violation of the principles of natural justice cannot be sustained. 36. Regarding the contentions of the Respondents that the period from 15.03.2020 till 28.02.2022 is required to be excluded, it will have to be rejected, as, in the present case, we have observed that the period to dispose of the show cause notice had commenced w.e.f. 10.09.2008. By the order dated 10.09.2008, the learned Tribunal had fixed a period of four weeks to the Petitioners to approach the Adjudicating Authority for inspection of documents (which would expire on 09.10.2008). The Adjudicating Authority was directed to grant such inspection to the Petitioners if such request was made within two weeks of such request. Considering that a request was made on 09.10.2008, the period would expire on 23.10.2008. The Petitioners were granted four weeks of such inspection to file their reply. Such period, if taken from 23.10.2008, would expire on 22.11.2008. 37. Thus, even in the eventuality abov....