The provisions of Section 28(11) of the Customs Act were inserted to undo the effect of a previous judgment and were necessary to prevent evasion of customs duty.

1. The petitioner M/s. Royaloak Furniture India LLP., Bengaluru, has filed these writ petitions in this Court on 27.2.2017 assailing the show-cause notice-cum- demand notice, Annexure-A, dated 6.1.2017, issued by the respondent-Additional Director General, Directorate Revenue Intelligence, Ministry of Finance, Department of Revenue, Government of India, to the petitioner in pursuance of the search operations carried out at the business place of the petitioner on 1.12.2015 and the petitioner has also challenged the provisions of sub-section (11) of Section 28 of Customs Act, 1962 (‘Act’ for short) inserted by the Customs (Amendment & Validation) Act, 2011, with effect from 16.9.2011.

2. The present writ petitions have been filed in this Court under Article 226 of the Constitution of India against the impugned show-cause notice Annexure-A, dated 6.1.2017 on the twin grounds of validity of provisions of the Act and also lack of jurisdiction of the respondent-Additional Director General to issue the said show-cause notice.

3. The learned counsel for the petitioner Mr.Raghuraman has submitted before the Court that the Hon’ble Supreme Court in the case of Commissioner of Customs Vs. Sayed Ali [2011 (265)E.L.T.17 (S.C.)] decided on 18.2.2011 had laid down that it is only the officers of customs, who are assigned the functions of assessment, working under the jurisdictional Collectorate within whose jurisdiction the bills of entry or baggage declarations has been filed and the consignments have been cleared for home consumption, will have the jurisdiction to issue notice under Section 28 of the Act and therefore the authorities belonging to the Intelligence Wing, who are the authorities assigned the functions of preventing evasion of duty do not have the assessment of powers under the Customs Act.

4. He submitted that Section 28(11) inserted by way of amendment to the Act with effect from 16.9.2011 does not remove the defect, on the premise of which the decision in Sayed Ali’s Case (cited supra) was rendered by the Apex Court and in the absence of any guidelines on the basis of which such multiple authorities in the Intelligence Wing will exercise the assessment powers, the said provision of Section 28(11) of the Act itself is ultra vires and is liable to be struck down by this Court and consequently the impugned show-cause notice issued by the Additional Director General also deserves to be quashed as there is complete lack of jurisdiction with him to issue any such show-cause notice, albeit the said authority- Additional Director General while issuing 37 pages impugned show-cause notice has called upon the petitioner-company to finally show-cause before the Principal Commissioner/Commissioner of Customs, Bangalore, in pursuance of the said notice issued by him.

5. learned counsel Mr.Raghuraman has also drawn the attention of the Court to the following judgments to support his contentions:

1. Sri Balaji Rice Company Vs. Commercial Tax Officer No.1, Nellore & others - (1984) 55 STC 292

2. Sivaramakrishnan Vs. State of Kerala & others - Docid # IndLawLib/556192

6. Upon issuance of notice, the respondents have put in appearance before this Court and Mr.Jeevan Neeralgi appeared on behalf of the respondents.

7. Mr.Jeevan Neeralgi has submitted before the Court that to undo the effect of the judgment of the Hon’ble Supreme Court in Sayed Ali’s Case only the sub-section (11) was inserted in Section 28 of the Act with a non-obstante clause and the powers of assessment have been conferred now on all the persons appointed as Officers of Customs under Sections 4(1) of the Act and they have been deemed to be ‘proper officers’ for the purpose of the said Section 28. He submitted that there is no illegality or ultra vires in the said provisions of Section 28(11) of the Act and the power to issue such show-cause notice with the Additional Dire