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IN THE HIGH COURT OF CALCUTTA
T.S. Sivagnanam, Hiranmay Bhattacharyya, JJ.
Additional Director General, Directorate Of Revenue Intelligence, Kolkata Zonal Unit And Another - Appellant
Versus
M/s. Dec Agrotech Pvt. Ltd. And Others - Respondent
MAT No. 819 of 2020, IA NO. CAN 1 of 2020
Decided On : 20-01-2022
Customs Act - Extension of Time for Show Cause Notice - Section 110(2) - The court held that the amended proviso to Section 110(2) does not obviate the requirement of adherence to the principle of natural justice when power under section 110(2) of the act is exercised. The authorities were required to give an opportunity of hearing to the writ petitioners from whom the goods were seized which they did not do while issuing the order impugned in the writ petition. Therefore, on the sole ground of breach of principles of natural justice, the order was set aside. The Court further held that no observation made in the order is to be considered as a decision on the merits of the rival claims before the authority and the authority was at liberty to take steps in accordance with law.
Fact of the Case:
The writ petitioners filed a petition for issuance of a writ of Mandamus to withdraw/cancel the order dated 24.06.2020 passed by the revenue under proviso to Section 110(2) of the Customs act, 1962 and for a writ of prohibition to prohibit the revenue from withholding the goods covered under the shipping bills dated 13.09.2019. The writ petitioners contended that the period of six months from the date of seizure of the three exports consignments intervene on 17.04.2020 and no notice under clause (a) of Section 124 of the act had been issued to the writ petitioners with respect to the seized goods and as such the provisions of Section 110(2) of the act is applicable to the case of the writ petitioners, fastening a statutory obligation on the revenue to return the seized goods in terms of section 110(2) at the expiry of the period of 6 months from the date of seizure and in the absence of any appropriate order of extension under section 110(2) there is a statutory right for the writ petitioners to obtain return of the seized goods.
Finding of the Court:
The Court held that the order extending the time for issuance of Show Cause Notice was impugned in the writ petition and was set aside on the sole ground of breach of principles of natural justice. The Court further held that no observation made in the order is to be considered as a decision on the merits of the rival claims before the authority and the authority was at liberty to take steps in accordance with law.
Issues: The main issue was whether the authorities were required to give an opportunity of hearing to the writ petitioners from whom the goods were seized before issuing the order extending the time for issuance of Show Cause Notice under section 110(2) of the Customs act.
Ratio Decidendi: The Court held that the amended proviso to Section 110(2) does not obviate the requirement of adherence to the principle of natural justice when power under section 110(2) of the act is exercised. The authorities were required to give an opportunity of hearing to the writ petitioners from whom the goods were seized which they did not do while issuing the order impugned in the writ petition. Therefore, on the sole ground of breach of principles of natural justice, the order was set aside.
Final Decision: The writ appeal is allowed and the order passed in writ petition is set aside. Consequently the writ petition stands dismissed.
JUDGMENT
1. This appeal by the Directorate of Revenue Intelligence (DRI) is directed against the order dated 14.09.2020 in WPa No. 6390 of 2020 filed by the Respondent No. 1 and 2 herein which was allowed.
2. In this judgment the appellant shall be referred to as the revenue and the respondents 1 and 2 as the writ petitioners.
3. The writ petition was filed for issuance of a writ of Mandamus to withdraw/cancel the order dated 24.06.2020 passed by the revenue under proviso to Section 110(2) of the Customs act, 1962 (act for brevity) and for a writ of prohibition to prohibit the revenue from withholding the goods covered under the shipping bills dated 13.09.2019.
4. The first Writ Petitioner is a private limited company incorporated under the Companies act, 1956 having its registered place of business at Calcutta. The second Writ Petitioner is the Managing Director of the Company. During July, 2019, the officers of the revenue commenced an investigation against the writ petitioners by way of search and seizure. Summons were issued and statements were recorded by the CGST authorities with respect to 24 exports made by the writ petitioners between February 2019 and June 2019. During September 2019, the writ petitioners filed two shipping bills dated 13.09.2019 for export of Chewing Tobacco through Calcutta Port and another export consignment under shipping bill dated 30.09.2019 for the same product. The said three export consignments were subjected to examination and all the three consignments were seized under Section 110 of the Customs act on the allegations of mis-declaration. Thereafter, the revenue commenced investigation with respect to the exports made by the writ petitioners. aggrieved by the same, the second writ petitioner filed WP No. 23075 (W) of 2019 for issuance of a Writ of Mandamus to restrain the revenue from proceeding with the investigation carried on by them against the writ petitioners and for a consequential direction to release the export consignments covered under the three shipping bills along with prayers for appropriate interim relief. The Learned Writ Court by order dated 19.12.2019 was of the view that different authorities can proceed with respect to the same transaction if liabilities arising from one transaction are in respect of different legislations under which the authorities operate and there is no bar and/or impediment in doing so. With such reasoning, the prayer for interim relief was not granted.
5. During January 2020, summons was issued to the second writ petitioner under section 108 of the act and statements were recorded. The writ petitioners submitted petitions dated 14.02.2020 and 15.02.2020 praying for release of the export consignments, it is alleged that though such petitions were submitted no orders were passed on the same. During June 2020, summons was issued to the second writ petitioner and his spouse directing them to personally appear before the authorities. Being aggrieved by the same the writ petitioners filed an application in WP No. 23075(W) of 2019 praying for release of the exports consignments. On 18.06.2020 the second writ petitioner was arrested on the ground that the offence under section 135 of the Customs act, has been committed and he was remanded to judicial custody on 19.06.2020, and enlarged on bail on 09.07.2020. While so on 24.06.2020, the second appellant/revenue passed the order extending the period of issuance of Show Cause Notice in exercise of his powers under section 110(2) of the act for a further period of 6 months with effect from 30.6.2020 with respect to the seizure of three export consignments and such order was forwarded to the writ petitioners through email dated 25.06.2020. This order extending the time for issuance of Show Cause Notice was impugned in the writ petition.
6. The writ petitioners contended that the period of six months from the date of seizure of the three exports consignments intervene on 17.04.2020 and no notice under clause (a) of
Proceedings under section 11A of Act are adjudicatory proceedings and authority which decides same is a quasi-judicial authority. Such proceedings are strictly governed by statutory provisions. Secti....
Show cause notices issued prior to 29.03.2018 must be adjudicated within one year from that date; otherwise, they lapse.
Delayed adjudication attributable to the revenue violates procedural fairness and the principles of natural justice.
DRI officers are designated as proper officers under the Customs Act, enabling them to issue show cause notices under Section 28, overruling previous judgments that restricted their authority.
The right under Section 110(2) of the Customs Act for unconditional release of goods is absolute and cannot be curtailed or prevented by the Department.
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