The Bombay High Court has quashed the Show Cause Notice on the grounds that it is incumbent upon the respondent/customs department to have informed the petitioner about its case being transferred to the call book, even without reference to the provisions of Section 28(9) of the Customs Act.
The bench of Justice M.S.Sonak and Justice Jitendra Jain has observed that there is a gross delay of over 20 years in adjudication of the show cause notice; no delay can be attributed to the petitioner for the delay.
Table of Contents
Background
The petitioner is a leading company engaged in shipping business. An investigation was carried out in 1997 for alleged mis-declaration of import of GDSS parts. The importer M/s Sanghvi Re-conditioners paid duty under protest in 1999. However, a show cause notice came to be issued on 28.03.2002 proposing demand of duty and imposition of penalties. The petitioner was a co-noticee. The show cause notice was sought to be adjudicated in 2023.
By this petition under Article 226 of the Constitution of India, the petitioner sought to challenge a show cause notice issued under Sections 28, 124, etc. of the Customs Act primarily on the ground of delay in adjudicating the show cause notice until today.
The petitioner submitted that the show cause notice dated 28 March 2002 has not been adjudicated till today for almost more than 20 years and, therefore, relying upon the decision of the Court in cases of Sanghvi Reconditioners Pvt. Ltd. Vs. Union of India & Ors., Reliance Industries Ltd. & Anr. Vs. Union of India & Ors. and Coventry Estates Pvt. Ltd. Vs. The Joint Commissioner CGST and Central Excise and Anr. submits that the impugned show causes notice to be quashed.
The department contended that the petitioner’s case was transferred to the call book, and, therefore, the show cause notice was not adjudicated. The decision in the cases of Sanghvi Reconditioners Pvt. Ltd. was rendered in December 2017, and Reliance Industries Ltd. was rendered in July 2019. Still, the petitioner chose not to challenge the show cause notice immediately after that but has chosen to file the present petition now, and, therefore, the petitioner is equally responsible for the delay; therefore, even on this count, the petition should be dismissed.
Conclusion – Customs Department
The court held that the petitioner was prompted to approach the court after receipt of notice for hearing in 2023. There is no reason for not following the ratio laid down in the case of co-noticee (M/s Sanghvi Reconditioner and M/s Reliance Industries) where the same show cause notice was quashed by the court in 2017 and 2019 qua the co-noticees. The fact that the matter was kept in call book due to pendency of a matter before the Supreme Court in another assessee case (A. S. Moolbhai) was not informed that the petitioner is fatal; despite section 28(9) of the Customs Act.
The court allowed the petition.
Was Customs Department Failed To Inform Assessee About Transferring Its Case To The Call Book?
Yes. Customs Department Failed To Inform Assessee About Transferring Its Case To The Call Book
Case Details
Case Title: The Great Eastern Shipping Company Ltd. v/s Union of India
Case No.: Writ Petition No.3605 Of 2024
Date: 14 October 2024
Counsel For Petitioner: Bharat Raichandani
Counsel For Respondent: Karan Adik
