9911796707
TMI Blog2024 (11) TMI 622X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, declared value of which was lower than prevailing international prices; that during the investigation, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch 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 upon the issue becoming stale. Based on the case set out in the Petition, the Petitioners seek the aforemention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtunity 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 SCN dated 24.09.2003 till 08.08.2024, (i.e. the date on which the letter was issued to the Petitioners calling upon the Petitioners to attend the personal hearing fixed on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence 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 to the excessive lapse of time and the issue becoming stale, the Petitioners have lost all records pertaining to the matter. That continuation of such proceedings would cause irretri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ossible 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 as the same were issued as on 29.06.2016, whereas the order of the Tribunal is dated 10.09.2008; that the chronology referred by the Respondents did not state that the Petitioners were intimated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver 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 disposal of the adjudicating proceedings with the outer limit of six months. The Petitioners were only granted an opportunity to seek or inspect the documents should they so desire. If the Petitioners alleg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 tenable explanation on the part of the Respondents for non-compliance of the directions contained in the order dated 10.09.2008 passed by the learned Tribunal. 24. For the period from the year 2014 till the issuance of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 latin maxim "lex dilationes abhorret", i. e., law abhors delay. 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. (s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. 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 constitutes breach of principle of natural justice. In the present case, show cause notice issued in the year 2013 was replied by the Petitioner well within time in the year 2014 itself. The Petitioner has specifically pleaded that the previous Director of the Petitioner, who was look ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eight 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 revenue that the reasons for keeping it in call book are not correct and that the notices should be adjudicated promptly. Thus informing the parties about keeping the show cause notice in call book would advance the cause of transparency in revenue administration. 30. In the case of Parle International Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the call book, or soon after the petitioners are informed the status of the show cause notices so as to put the parties to notice that the show cause notices are still pending. Giving notices for hearing after gap of 17 years, as in this case, is to catch the parties by surprise and prejudice a fair trial, as the documents relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat 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 above, the period of six months would be 22.05.2009. A bare reading of the orders passed from time to time by the Hon'ble Supreme Court in Writ Petition(C)/3/2020 read with Miscellaneous Civil Application No. 665 of 2021 and Miscellaneous Civil Application No. 21 of 2022 would indicate that the benefit of the period from 15.03.2020 till 28.02.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... For the reasons recorded hereinabove, we are satisfied that the inordinate delay/delayed adjudication was in contravention of procedural fairness and, thus, violative of principles of natural justice. The Adjudicating Authority should have adjudicated the impugned SCN within a reasonable time; failure to do so is bound to cause prejudice to the Petitioners. This Court has repeatedly quashed such inordinately delayed adjudications backed by no compelling explanations in the precedents referred to above. 42. From the above facts and circumstances, we find that the impugned No. DRI/MZU/D/25/Esjaypee/2001 dated 24.09.2003 and Personal hearing Notice bearing F No. S/10-19/2002 Adj. Part-III dated 19.06.2024, are liable to be quashed and set aside. 43. Accordingly, for the above reasons, we quash and set aside the impugned Show Cause Notice No. DRI/MZU/D/25/Esjaypee/2001 dated 24.09.2003 and the Personal Hearing Notice bearing F No. S/10-19/2002 Adj. Part-III dated 19.06.2024 and restrain the Respondents from proceeding further in the matter. 44. The Rule is made absolute in the above terms without any costs. The Writ Petition is disposed of accordingly. 45. All concerned to act on a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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