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2015 Supreme(Raj) 39
IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JAIPUR BENCH, JAIPUR
SUNIL AMBWANI and PRAKASH GUPTA, JJ.
Shree Krishna Paper Mills & Industries Ltd. – Petitioner
Vs.
Union of India & Ors. – Respondent
CIVIL WRIT PETITION NO.2668/2007
Decided On : 27.1.2015
Advocate Appeared:
Mr.Sudhanshu Kasliwal, Senior Advocate assisted by
Mr.Anant Kasliwal for the petitioner.
Mr.Anil Mehta for the respondents.
A writ petition against a show cause notice is not ordinarily maintainable, unless the show cause notice has been given by an authority, who has no authority in law to issue such notice; the notice has been issued under a wrong provision of law, or has been addressed to a wrong person. The show cause notice may also be challenged on the ground of malafides, for which there must be sufficient pleading and material to prove the allegations.
Headnote:
CUSTOMS ACT, 1962 - SHOW CAUSE NOTICE - DOCUMENTS RELIED UPON - SUPPLY - WRIT PETITION - MAINTAINABILITY - FINAL ASSESSMENT - ENHANCEMENT OF PROVISIONAL ASSESSMENT - CONFISCATION OF GOODS - GROUNDS FOR CHALLENGE.
Fact of the Case:
The petitioner challenged a show cause notice issued by the Office of the Commissioner of Customs (Prev.), Jodhpur, under Section 18 of the Customs Act, 1962, on the grounds that it was bad in law, violative of principles of natural justice, without jurisdiction, and violative of Article 14 of the Constitution of India. The petitioner also contended that the non-supply of the purported investigation report of US Customs had vitiated the entire proceedings, and that the notice was not sustainable as it had been issued merely for recovery of the customs duty, under Section 18(2) of the Customs Act, 1962, without finalizing the provisional assessment in disregard to the provisions of law.
Finding of the Court:
The court found that all the relied upon documents had been provided to the petitioner, and that the pendency of the writ petition had been taken as an advantage, in delaying the proceedings. The court also found that the grounds, on which the show cause notice had been challenged, had not been established and substantiated. The court further observed that the interim order was obtained by the petitioners on a completely misleading argument, that a notice under Section 28 had not been served, before demand had been raised.
Issues: 1. Whether the show cause notice was bad in law, violative of principles of natural justice, without jurisdiction, and violative of Article 14 of the Constitution of India? 2. Whether the non-supply of the purported investigation report of US Customs had vitiated the entire proceedings? 3. Whether the notice was sustainable as it had been issued merely for recovery of the customs duty, under Section 18(2) of the Customs Act, 1962, without finalizing the provisional assessment in disregard to the provisions of law?
Ratio Decidendi: 1. A writ petition against a show cause notice is not ordinarily maintainable, unless the show cause notice has been given by an authority, who has no authority in law to issue such notice; the notice has been issued under a wrong provision of law, or has been addressed to a wrong person. The show cause notice may also be challenged on the ground of malafides, for which there must be sufficient pleading and material to prove the allegations. 2. In the present case, none of the grounds, to successfully challenge a show cause notice have been pleaded, or are existing on record. The show cause notice has been challenged only on the ground that it proposes to enhance the provisional assessment, and calls for a reply, as to why the goods may not be confiscated, without providing all the documents referred to in the show cause notice. The court examined the matter and found that the grounds, on which the show cause notice has been challenged, have not been established and substantiated. All the documents, which have been relied upon for the final assessment, were provided to the petitioner. 3. The show cause notice does not suffer from any lack of authority, or any error of jurisdiction.
Final Decision: The writ petition was dismissed, with costs quantified at Rs.1 lac.
1. We have heard learned counsel for the parties.
2. This writ petition was filed challenging the show cause notice dated 4.9.2006 issued by the Office of the Commissioner of Customs (Prev.), Jodhpur under Section 18 of the Customs Act, 1962, to show cause as to why the provisional assessment of the second-hand paper making plant & machinery imported by the petitioner should not be finalized, enhancing the declared assessable value by Rs.3,21,06,615/-, and further, as to why the Customs duty amounting to Rs.1,63,10,160/- short paid on the said amount should not be recovered from them under Section 18(2) of the Customs Act, 1962. The notice provided for appropriation of the differential amount; the interest chargeable from 1.8.2002 to 23.6.2005 on the amount of differential customs duty, and further, required the noticees to show cause as to why the second-hand paper making plant & machinery imported on undervalued price as well as misdeclaring the age to be less than 10 years old, without valid import licence, be not confiscated under Section 111(d) & 111(m) of the Customs Act, 1962. The notice also proposed penalty to be imposed under Section 112(a) of the Customs Act, 1962. The notices were also given to Shri N.K.Pasari, Shri S.C.Jain, Shri A.K.Sharma, Shri P.D. Agarwal, Shri S.K. Agrawal, Shri J.Nagarajan and Shri Ambreesh Chandra, to show cause, within 30 days, as to why penalty under Section 112(a) of the Customs Act, 1962 should not be imposed upon them, which rendered the goods liable for confiscation. The noticees were required to submit all the evidences upon which they intended to rely in support of their defence. In Para 33 of the notice, it was mentioned that the documents relied upon in the show cause notice, as per the list of documents, are enclosed with the notice.
3. The writ petition was filed on the grounds that the show cause notice is bad in law; violative of principles of natural justice, without jurisdiction and is violative of Article 14 of the Constitution of India. The non-supply of the purported investigation report of US Customs has vitiated the entire proceedings, and further, that the notice is not sustainable, as the same has been issued merely for recovery of the customs duty, under Section 18(2) of the Customs Act, 1962, without finalizing the provisional assessment in disregard to the provisions of law.
4. The writ petition was admitted on an argument that a notice under Section 28 of the Customs Act has not been issued, or served, for realizing the demand.
5. During the pendency of the writ petition, an application was filed to supply all the documents, which have been relied on in the show cause notice, and more particularly, the US Customs report. That application was rejected vide order dated 29.5.2008. The petitioner filed Special Leave to Appeal (Civil). . . . . ./2008 CC 14358/2008, arising out of order dated 29.5.2008 (Shree Krishna Paper Mills & Inds. Ltd. Vs. Union of India & Ors.), which was dismissed as withdrawn on 5.1.2009 by the following order :-
“In this S.L.P., the main grievance of the assessee was that the Department has not supplied to them copy of the U.S. Customs Report on which the Department seeks to place reliance. A copy has been supplied to the assessee. In the circumstances, we see no reason to pass any further directions in this behalf. If the assessee is aggrieved on any of the documents referred to in the Customs Report not being supplied to them, it would be a matter to be considered by the High Court in the pending Writ Petition.
Special Leave Petition is dismissed as withdrawn.”
6. Learned Senior Counsel appearing for the petitioner submits that the notice is vitiated by bias and malafides, inasmuch as the authorities are pre-determined, in forming an opinion that the duty has been short paid with misdescription of the goods. It is stated that unless final assessment is made, no demand can be raised. It is submitted that the raised amount of short pa
