Point of law : information of incorrect entries was in public domain and with the authorities, as custodian of the records, who sought their correction, whereas in the instant case the information with regard to non-reconciliation of the export advances was either with the authorised dealer or with the noticee itself and not with the Enforcement Directorate or the complainant, therefore the principle of law laid down by the apex court in Joint Collector Ranga Reddy District and another (supra) would not come to the aid of the petitioner in maintaining a challenge to the show cause notice.

JUDGMENT

Manoj Misra, J.

1. By this petition the petitioner has sought quashing of a show cause notice dated 30th September 2020 issued by the Assistant Director, Directorate of Enforcement, Zonal Office, Lucknow (first respondent) thereby calling for an explanation from the noticee (the petitioner) as to why adjudication proceeding as contemplated in Section 13 of the Foreign Exchange Management Act, 1999 (for short FEMA) be not held against it in the manner as provided in Rule 4 of the Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000 (as amended), read with rules and regulations made thereunder and as to why penalty as provided under Section 13 (1) of FEMA be not imposed for the contraventions as brought under the complaint.

2. Before noticing and addressing the issues raised it would be apposite to briefly notice the background facts of the case, as could be elicited from the petition —

(i) The petitioner is a private limited company incorporated under the Companies Act with its registered office at NOIDA.

(ii) The company had been engaged in the business of software development and export of computer & business support services. Initially, the company was incorporated as M/s. Results India Systems Private Limited but as it was acquired by Fiserv Group (based in U.S.A.) in the year 2004, with effect from 24.11.2005, the name of the company was changed to Fiserv India Private Limited.

(iii) On 17.08.2017, under Section 37 of FEMA, 1999, read with Section 133(6) of the Income-Tax Act, 1961, a notice was issued to the petitioner requiring it to furnish information along with documentary evidence for not utilising certain export advances within the stipulated period which the petitioner received through its authorised dealer i.e. ICICI Bank Ltd. According to the petitioner, this notice was never served upon it but, subsequently, the petitioner got it as an annexure with the impugned show cause notice.

(iv) On 05.12.2017, the first respondent sent another letter to the petitioner requiring the petitioner to furnish information along with documentary evidence in respect of not utilising, within stipulated period, 16 export advances that were received by the petitioner through its authorised dealer during financial years 2003-04 and 2004-05.

(v) The petitioner acknowledged the said notice vide letter dated 19.12.2017 and sought two months time to collate relevant documents and information required by the first respondent.

(vi) On 07.03.2018, the petitioner received a reminder letter dated 26.02.2018 from the first respondent, by way of last opportunity, to submit the required information/documents to which, vide letter dated 14.03.2018, the petitioner replied by claiming that there were no export advances outstanding in the books of accounts of the petitioner at the end of financial year 2003-04 and 2004-05. However, as the documents and information sought were from a period 13 years ago, further time was sought to substantiate the defence and make further submissions.

(vii) Thereafter, on 12.04.2018, the petitioner vide letter to the first respondent reiterated its position that there were no non-utilised advances outstanding in petitioner's books of accounts. The petitioner also submitted that the details sought by the first respondent related to a very old period and as relevant employee/officers of the petitioner were no more in petitioner's employment, hence, the petitioner was handicapped in providing details/information of such old transactions. The petitioner also cited certain judicial pronouncements so as to contend that where no period of limitation is provided for initiation of proceedings, the proceedings could only be initiated within a reasonable time.

(viii) On 30.09.2020, in exercise of power under section 16(3) FEMA, a complaint was filed against the petitioner. As per paragraph 2 thereof, the basis of the complaint was a report received from ICICI Bank (authorised dealer) giving detai