Full Text
HIGH COURT OF DELHI
Date of Decision: 18th February, 2025
UMESH GULHAR .....Petitioner
Through: Ms. Shikha Sapra, Ms. Reena Rawat & Mr. Dhruv Sharma, Advs. (M:
9818055059)
Through: Mr. Harpreet Singh, Sr. SC along
Prathiba M. Singh, J. (Oral)
JUDGMENT
1. This hearing has been done through hybrid mode.
2. The present writ petition has been filed by the Petitioner - Umesh Gulhar under Article 226 of the Constitution of India seeking to quash the impugned Order In Original dated 15th January 2024.
3. The Petitioner-Mr. Umesh Gulhar was a Director in a China based company – M/s. Tessuti (HK) Ltd. The said company is said to have exported few consignments consisting of ‘Narrow Woven Fabrics’ between October, 2010 and November, 2010 to an importer company in India being, J.R. International (hereinafter ‘Importer’). Certain bills of entry qua the said consignments were also filed in the this regard.
4. According to the Respondent-Department, the said consignments were 16:36 mis-declared and, accordingly, a show cause notice was issued on 7th November, 2013 was sent to the Importer with Petitioner company as a conoticee, demanding differential duty from the importer along with interest and penalty.
5. The said show cause notice was challenged by M/s J.R. International before this High Court in W.P.(C)6714/2024 titled M/s J.R. International v. Principal Commissioner of Customs & Anr. The matter was thereafter tagged along with a batch of Petitions wherein the lead matter was W.P.(C) 4831/2021 titled “M/s Vos Technologies India Pvt. Ltd. v. The Principal Additional Director General & Anr.” The coordinate bench of this Court vide its judgment dated 10th December, 2024 in the batch matters, also quashed the show cause notice dated 7th November, 2013. The operative portion of the said judgment reads as under:
16:36 control which prevented it from moving with reasonable expedition. This principle would apply equally to cases falling either under the Customs Act, the 1994 Act or the CGST Act.
86. When we revert to the facts that obtain in this batch, we find that the respondents have clearly failed to establish the existence of an insurmountable constraint which operated and which could be acknowledged in law as impeding their power to conclude pending adjudications. In fact, and to the contrary, the frequent placement of matters in the call book, the retrieval of matters therefrom and transfer all over again not only defies logic it is also demonstrative of due application of mind quite apart from the said procedure having been found by us to be contrary to the procedure contemplated by Section 28. The respondents have, in this regard, failed to abide by the directives of the Board itself which had contemplated affected parties being placed on notice, a periodic review being undertaken and the proceedings having been lingered unnecessarily with no plausible explanation. The inaction and the state of inertia which prevailed thus leads us to the inevitable conclusion that the respondents clearly failed to discharge their obligation within a reasonable time. The issuance of innumerable notices would also not absolve the respondents of their statutory obligation to proceed with promptitude bearing in mind the overarching obligation of ensuring that disputes are resolved in a timely manner and not permitted to fester. Insofar as the assertion of the assessees’ seeking repeated adjournments or failing to cooperate in the proceedings, it may only be noted that nothing prevented the respondents from proceeding ex parte or refusing to reject such requests if considered lacking in bona fides xxx xxx xxx 16:36
X. OPERATIVE DIRECTIONS
88. Accordingly, and for all the aforesaid reasons, we allow the present writ petitions and quash the SCNs[1] as well as any final orders[2] that may have come to be passed and which stand impugned in this batch of writ petitions.”
6. As can be seen from the above judgment, the question that was considered by the Court was whether there was undue delay in adjudication of the show cause notice in terms of Section 128 of the Act. The Court observed that there was no justification for the enormous delay that occurred in the adjudication and had, accordingly, quashed the show cause notices. The details of – a. the said show cause notice dated 7th November, 2013 and b. the various dates on which the show cause notice was transferred and was taken out the call book and c. number of adjournments passed are set out in the said judgment in the form of a chart at pages 38 and 39.
7. The said chart is also reproduced below: CHART ON MATTER-WISE DETAILS IN RE: TIMELINE FOR ADJUDICATION PROCEEDINGS
Details of Call Book Placement/Board Instructions Details of Personal Hearings Adjournments and other related details Impact of the Amendm ent Act of 2018 (Act NO. 13) [Pre/Post ] xxx xxx xxx xxx xxx xxx xxx xxx
38. M/s J.R. International
07.11. 15.01. • Impugned SCN was transferred 28.12. • 14.08.2014 – Nobody appeared on the given Pre Including show cause notice dated 07th November, 2013 Including Order In Original dated 15th January 2024 16:36 v. Principal Commissioner Customs and Anr. WP(C) 6714/2024 to the call book w.e.f. 29.06.2016 in view of Board’s instruction issued vide F.No.276/104/20 16-CX.8A(Pt.) dated 29.06.2016. was taken out from the call book on 03.01.2017 in F.NO. 276/104/2016- CX.8A(Pt.) dated 03.01.2017. w.e.f. 03.11.2017 in F.NO. 437/143/2009- Cus.IV dated 03.11.2017. was taken out from the call book on 03.05.2019 in view of the Office Memorandum F.No. date and time. • 03.12.2014 - Nobody appeared on given Advocate on behalf of Noticee No. 3 requested for another date of personal hearing. • 23.02.2015 – The AR of the Petitioner appeared and sought adjournment in the matter. • 31.03.2015 – Nobody appeared on the given • 18.09.2015 – The ARs appeared and sought more time to file the reply. • 13.10.2015 - AR of the Petitioner stated that the Petitioner is in the process of challenging the SCN before the Delhi High Court in respect of the powers of the DRI to issue the said SCN, and accordingly the proceedings could not continue due to the said reason. • 02.11.2015 - The AR of the Petitioner stated that the Petitioner had filed a writ before the Delhi High Court and therefore the matter may be kept in 16:36 437/143/2009- Cus.IV dated 03.05.2019. on 17.03.2021 in light of the ruling of the Supreme Court in Canon India Private Limited v. Commissioner of Customs and Board’s Instruction NO. 04/2021 – Customs dated 17.03.2021. • The impugned SCN was taken out of the call book on 01.04.2022 in view of the validation owing to Section 97 of the Finance Act,
2022. abeyance. • 18.11.2015 - The Noticees were requested to file their replies as promised by them in the personal hearing held earlier. The Noticees were also requested to provide stay order of Hon’ble High Court of Delhi in order to keep the matter in abeyance as requested by them. However, no reply or any stay order was received. Also, nobody appeared on given date and time. • 16.12.2015: The Noticees were specifically conveyed that this was the last personal hearing. They were reminded that they had not submitted their replies in the impugned matter and the matter was getting delayed because of that. They were also requested to provide the stay order; if any, passed by Hon’ble High Court of Delhi in the Writ filed by them. Advocate appeared on behalf of Noticee No. 1 and he too requested for additional time of thirty days. He was also asked to submit his reply by 15.01.2016 failing 16:36 with case will be decided based on available records. • 02.03.2017 - Advocate appeared on behalf of the Petitioner along with the Proprietor. He stated that the Petitioner had moved the Hon’ble Delhi High Court on the jurisdiction of DRI to issue the said SCN and that the Hon’ble Delhi High Court has passed an order (a combined order in case of Mangli Impex) in their favour and that the matter is pending in the Hon’ble Supreme Court. He argued that as the matter is subjudice, no order should be passed till the final disposal of the case by the Hon’ble Supreme Court. He also informed that all such cases are not being entertained in CESTAT. He also requested that he should be given opportunity to make final submissions on merit and another chance of personal hearing to argue the case in detail. 05.10.2017 – None of the noticees attended the PH. 16:36
8. The present petition has been filed by the Director who was one of the co-noticees against whom the Order In Original dated 15th January, 2024 has been passed, pursuant to the said show cause notice dated 7th November,
2013.
9. Since, both the show cause notice and the final order that arise from the said show cause notice have already been quashed by the Court qua the main company i.e., M/s J.R. International, the Order In Original qua the Petitioner would also be liable to be quashed. In fact, this Court has recently in W.P.(C) 11207/ 2023 titled Shri Balaji Enterprises v. Additional Director General New Delhi & Ors. also followed a similar rationale as the Coordinate Bench of this Court.
10. Accordingly, the show cause notice dated 7th November, 2023 along with Order In Original dated 15th January 2024 emanating therefrom are quashed. Ordered accordingly.
11. The petition is disposed of in these terms. All pending applications, if any, are also disposed of.
PRATHIBA M. SINGH JUDGE DHARMESH SHARMA JUDGE FEBRUARY 18, 2025/dj/Am 16:36