AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 1349
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....e basis of information received regarding alleged misuse of export promotion schemes, viz., drawback and DEPB by M/s J. Minakshi International, Prop. Shri Pawan Kumar Sharma, having its registered address in Jaipur, the said Shri Pawan Kumar Sharma was under investigation for alleged fraudulent exports of Readymade Garments, Leather items, Brass items, etc. Investigations and searches were carried out on 18th December 2006 by the officials of the Directorate of Revenue Intelligence, Delhi Zonal Unit, New Delhi (hereinafter referred to as the "DRI"). 3. Based on the investigations above carried out against various persons for the period 2001-05, the DRI issued a notice dated 31st March 2008 to M/s J. Minakshi International, Prop. Shri Pawan Kumar Sharma; M/s Jay Ess International, Prop. Shri Ajay Kumar Sharma; M/s J. Kanishka International, Prop. Shri Karan Harsora and various other persons calling upon those parties to show cause as to why the proposed various recoveries, including redemption fine, recovery of duty drawback, interest, penalties, etc. should not be made. 4. Shri Pawan Kumar Sharma passed away on 22nd April 2021. Petitioner, was a minor (13 years of age) when t....
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.... such power can be exercised at any point in time. Such power has to be exercised within a reasonable period, and what constitutes 'reasonable' would depend on nature of the statute, rights and liabilities thereunder, and other relevant factors. 8. Mr. Ranka further submitted that Section 28(9) of the Act of 1962 stipulates that a show cause notice issued in normal cases needs to be adjudicated within a period of six months and a show cause notice issued involving collusion, willful mis-statement or suppression of facts, should be adjudicated within a period of one year and accordingly prayed for quashing of the impugned Order-in-Original dated 18th October 2022 and impugned Show Cause Notice dated 31st March 2008. 9. To buttress his contentions, Mr. Ranka placed reliance on the judgments by the High Court of Bombay in Bhushan Vora Vs. Union of India 2024 (9) TMI 713; ICICI Home Finance Company Ltd. Vs. Union of India 2024 (6) TMI 682; Shahaji Bhanudas Bhad Vs. The Union of India and Ors. 2024:BHC-AS:35764-DB; Shreenathji Logistics Vs. Union of India 2022 (11) TMI 709 Godrej & Boyce Mfg. Co. Ltd. Vs. Union of India 2022 (9) TMI 318; and the judgments by the High Court of Guja....
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....period 2001-05, and Show Cause Notice was issued on 31st March 2008, father of petitioner (Prop. of M/s J. Minakshi International) passed away on 22nd April 2021, and the impugned Order-in-Original has been passed on 18th October 2022 after a lapse of more than 14 years from the date of the impugned Show Cause Notice. It is also evident that it is not respondent's case that petitioner's case was transferred to call book or petitioner or his late father was informed about the same. Petitioner was neither informed that the impugned notices had been transferred to call book, nor any documents to substantiate the same have been placed on record by respondent-department. 17. The Hon'ble Supreme Court and various High Courts have repeatedly held that doctrine of reasonable time applies universally to all proceedings, and the nature of the recovery does not alter the fundamental requirement of timely adjudication. 18. A similar issue had come up for consideration before the Bombay High Court in Godrej & Boyce Mfg. (supra), wherein it was held as under: "11............We have no hesitation in holding that the present Petition deserves to be allowed for the following reas....
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.... give the impression that revenue is not interested in proceeding with the matter or rather has a vested interest in assisting the answering party. On considering the above, we find that the facts in the present case are squarely covered by the law laid down by this Hon'ble Court especially in the case of Parle (supra) and Raymond (supra). We find that the following facts of the present case are ad idem to the facts in the case of Parle (supra), viz., i. The impugned show cause notices were resurrected after 13 years (identical period in Parle); ii. Petitioner was never informed that the impugned notices had been transferred to call book; iii. With the passage of time (and failure to inform) Petitioner was put in a position of irretrievable prejudice as the evidence was lost/not traceable and the concerned persons were no longer in the employment of Petitioner. iv. No delay was occasioned on account of Petitioner. In light of the above, we find that the adjudication of the impugned notices by Respondent No. 3 in the present case was clearly bad in law and consequently the impugned order is also void. Respondent No. 3 had taken up the....
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....and has resultantly occasioned grave injustice to Petitioner. Respondent No. 3 is enjoined with a duty and obligation in law to act in a fair, just and judicious manner. Respondent No. 3 has in the facts of the present case failed and neglected to exercise his jurisdiction in a transparent, fair and just manner as required and expected of him by law. Respondent No. 3 in fact acted in an ex facie predetermined manner with the sole objective of upholding the contention/action of the Revenue at any cost. Such conduct coupled with the failure of Respondent No. 3 to exercise jurisdiction as required by law has resulted in grave injustice and prejudice being caused to Petitioners. C. We also find Respondents contention that Petitioner has available an alternate and equally efficacious remedy by way of Appeal also to be misplaced and of no substance in the facts and circumstances of the present case." 19. A similar view was taken by the Bombay High Court in Shahaji Bhanudas Bhad (supra), which was authored by one of us (Chief Justice), it was observed therein: 12. The issue of delay in adjudication of the show cause notice had come up before this Court in series of ju....
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....erable 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 abridgment 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 fulfillment 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 latin maxim "lex dilationes abhorret", i.e., law abhors delay. (Emphasis Supplied) 21. In such context as to how the Courts have dealt with similar situations can be seen from some of the significant decisions on the issue. In Sushitex Exports (India) Ltd. ....
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....rbitrary 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." 22. In Bombay Dyeing and Manufacturing Company Limited vs. Deputy Commissioner of CGST and CX, DIV-IX, Mumbai Central GST Commissionerate, 2022 (382) E.L.T. 206 (Bom.), a co-ordinate Bench of this Court observed on the prejudice which would be caused to the assessee if for a long period the show cause notice is not adjudicated. It was held that belated hearing of the show cause notice would amount to violation of principles of natural justice. Following are the observations of the Court: "10. It is not expected from the assessee to preserve the evidence/record intact for such a long period to be produced at the time of hearing of the show-cause notice. The respondent having issued the show cause notice, it is their duty to take the said show cause notice to its logical conclusion by adjudicating upon the said show-cause notice within a reasonable period of time. In view of the gross delay on the pa....
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....elay was pleased to grant consequential relief to the petitioner therein by directing the respondents to return the amounts paid by the petitioner under protest during the course of investigation with interest @ 12% p.a." (Emphasis Supplied) 20. This well settled law was once again reiterated by the High Court of Gujarat in M/s Dhultawala Exim Pvt. Ltd (supra), wherein it was held as under: "10.1 This Court in the case of Siddhi Vinayak Syntex Pvt. Ltd. v. Union of India (Supra), held that a matter cannot be revived after 17 years when there is no appropriate reason for the delay and hence, the Show Cause Notice was quashed. 10.2 The Hon'ble Bombay High Court, in the case of, Shirish Harshavadan Shah v. Deputy Director Enforcement Directorate, Mumbai (Supra), held that in absence for reason of delay in adjudication, then opening of the matter after such a lapse cannot be allowed, as it will cause serious detriment and prejudice to the petitioner. 10.3 The Hon'ble Delhi High Court, in the case of, R.M. Malhotra v. Enforcement Directorate (Supra), held that revival of the proceedings after a time gap of ten years, without notice of heari....
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....n the percentage of the duty drawback also includes the Central Excise portion. We are of the opinion that the Revisional Authority while Considering the aspect in the facts of the case of the petitioner has not taken into consideration the fact that the rate of duty drawback is 1% in the facts of the case which relates to the custom portion only and not the Central Excise portion and therefore, the exporter did not get any double benefit in the facts of the case. In such circumstances, it cannot be said that the petitioner has committed any breach of the Rules by issuing the DOC without issuing ARE-2. In such circumstances, the impugned order passed by the Revisional Authority is not sustainable and is accordingly, quashed and set aside so far as the petitioner is concerned with regard to the levy of penalty which is deleted by the Commissioner of Customs (Appeals). 11. This Court finds itself in a complete agreement with the aforesaid position in law as applicable to the facts of the present case. Accordingly, the show cause notices referred to in the chart below Paragraph No. 67 and 7 as well as the Orders-In-Original dated 24.03.2012, 07.03.2013 and 31.03.2022....