Cus - SCN issued by ADG, DRI prior to 08.04.2011, adjudication order dated 25.6.2010 and consequential recovery proceedings, are rendered non est and void ab initio on vice of jurisdiction as admittedly he was not proper officer: HC
By TIOL News Service
CHANDIGARH, JULY 02, 2016: CALL it the domino effect pursuant to the Delhi High Court decision in the case of Mangali Impex & Ors. 2016-TIOL-877-HC-DEL-CUS.
In this Writ Petition, the petitioners challenge the SCN bearing No. DRIF. No. 856(20)LDH/2004/380 dated 13.3.2005 and the consequential proceedings including the Adjudication Order dated 25.6.2010.
This challenge is centered on the premise that the said Notice is issued by Additional Director General, Directorate of Revenue Intelligence, Ludhiana, who is not a 'proper officer' in terms of Section 2(34) read with Section 17 and 28 of the Customs Act, 1962.
They rely on judgment of the Supreme Court in Commissioner of Customs v. Sayed Ali, - 2011-TIOL-20-SC-CUS and also the recent judgment dated 3.5.2016 of the Delhi High Court in M/s Pace International & another v. Union of India & others, 2016-TIOL-877-HC-DEL-CUS wherein show cause notices issued prior to 8.4.2011 inter alia by Additional Director General, Directorate of Revenue Intelligence were quashed and set aside in Writ Jurisdiction.
The petitioners have also pointed out that they had also preferred Appeal before the Tribunal but they would withdraw the same.
The High Court observed that since the issue raised is of jurisdiction to issue the notice itself, the alternative remedy is not a bar and, therefore, it is inclined to exercise the writ jurisdiction.
After extracting the apex Court decision in Sayed Ali and the legislative amendments carried out by the Finance Act, 2011 [w.e.f 08.04.2011] and the notification 44/2011-Cus (NT) dated 06.07.2011 coupled with the Customs (Amendment and Validation) Act, 2011 (enacted on 16 September 2011), the High Court noted that the Delhi High Court while setting aside the show cause notices issued prior to 8.4.2011 arrived at, inter alia , the following conclusion -
| "95. In light of what has been held in the earlier part of the present judgment, it is clear that in relation to the events that took place prior to 8th April 2011 no SCN could have been issued to the Petitioner by the Commissioner of Customs (Preventive) who admittedly is not a "proper officer" in terms of the Section 2(34) of the Act. Section 28 (11) of the Act cannot be resorted to for validating the said SCN and proceedings pursuant thereto." |
Observing that the High Court completely agrees with the findings of the Delhi High Court and finds no reason whatsoever to take a different view being also bound by the judgment of the Supreme Court in Sayed Ali (supra), it was further viewed -
"15. In the instant case, the impugned show cause notice was issued much prior to 8.4.2011. Thus, the findings recorded on this jurisdictional issue by the Hon'ble Supreme Court in Sayed Ali (supra) as also those recorded by the Hon'ble Delhi High Court in the aforesaid judgment dated 3.5.2016 in M/s Pace International (supra) are mutatis mutandis applicable to the case of the present petitioners. Therefore, the impugned show cause notice dated 13.3.2005, the adjudication order dated 25.6.2010 and consequential recovery proceedings, are rendered non est and void ab initio on the vice of jurisdiction and are as such quashed and set aside. Consequently, we also direct that the Respondents No.1 to 3 shall refund along with interest, the amount of Rs.60lacs taken from the petitioners on 23.6.2004 within two weeks."
The Writ Petition was allowed.
In passing: Also see Show Cause Notices Issued by DRI Invalid - CBEC to take matter to SC.
(See 2016-TIOL-1257-HC-P&H-CUS)
