Delhi High Court
Umesh Gulhar vs Principal Commissioner Of Custom ... on 18 February, 2025
Bench: Prathiba M. Singh, Dharmesh Sharma
$~57
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 18th February, 2025
+ W.P.(C) 2079/2025 & CM APPL. 9742/2025, CM APPL. 9743/2025
UMESH GULHAR .....Petitioner
Through: Ms. Shikha Sapra, Ms. Reena Rawat &
Mr. Dhruv Sharma, Advs. (M:
9818055059)
versus
PRINCIPAL COMMISSIONER OF CUSTOM (IMPORT)
.....Respondent
Through: Mr. Harpreet Singh, Sr. SC along with
Mr. Suhani Mathur & Mr. Jai Ahuja,
Advs. (M:9811253531)
CORAM:
JUSTICE PRATHIBA M. SINGH
JUSTICE DHARMESH SHARMA
Prathiba M. Singh, J. (Oral)
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
mis-declared and, accordingly, a show cause notice was issued on 7 th
November, 2013 was sent to the Importer with Petitioner company as a co-
noticee, 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:
"85. The position which thus emerges from the
aforesaid discussion and a review of the legal
precedents is that the respondents are bound and
obliged in law to endeavour to conclude adjudication
with due expedition. Matters which have the potential of
casting financial liabilities or penal consequences
cannot be kept pending for years and decades together.
A statute enabling an authority to conclude proceedings
within a stipulated period of time "where it is possible
to do so" cannot be countenanced as a license to keep
matters unresolved for years. The flexibility which the
statute confers is not liable to be construed as
sanctioning lethargy or indolence. Ultimately it is
incumbent upon the authority to establish that it was
genuinely hindered and impeded in resolving the dispute
with reasonable speed and dispatch. A statutory
authority when faced with such a challenge would be
obligated to prove that it was either impracticable to
proceed or it was constricted by factors beyond its
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
X. OPERATIVE DIRECTIONS
88. Accordingly, and for all the aforesaid reasons, we
allow the present writ petitions and quash the SCNs1 as
well as any final orders2 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
S. Matter Date of Date Details of Call Book Details of Adjournments and other Impact
No. Details Show of Placement/Board Personal related details of the
Cause Adjud Instructions Hearings Amendm
Notice ication ent Act
Order of 2018
(Act No.
13)
[Pre/Post
]
xxx xxx xxx xxx xxx xxx xxx xxx
38. M/s J.R. 07.11. 15.01. • Impugned SCN 28.12. • 14.08.2014 - Nobody Pre
International 2013 2024 was transferred 2023 appeared on the given
Including show cause notice dated 07th November, 2013
Including Order In Original dated 15th January 2024
v. to the call book date and time.
Principal w.e.f.
Commissioner 29.06.2016 in • 03.12.2014 - Nobody
Customs and view of Board's appeared on given
Anr. instruction date and time.
WP(C) issued vide Advocate on behalf
16-CX.8A(Pt.) requested for another
dated date of personal
29.06.2016. hearing.
• Impugned SCN • 23.02.2015 - The AR
was taken out of the Petitioner
from the call appeared and sought
book on adjournment in the
03.01.2017 in matter.
view of Board's
instruction • 31.03.2015 - Nobody
issued vide appeared on the given
F.No. date and time.
276/104/2016-
CX.8A(Pt.) • 18.09.2015 - The ARs
dated 03.01.2017. appeared and sought
more time to file the
• Impugned SCN reply.
was transferred
to the call book • 13.10.2015 - AR of
w.e.f. the Petitioner stated
03.11.2017 in that the Petitioner is in
view of Board's the process of
instruction challenging the SCN
issued vide before the Delhi High
F.No. Court in respect of the
437/143/2009- powers of the DRI to
Cus.IV issue the said SCN,
dated 03.11.2017. and accordingly the
proceedings could not
• Impugned SCN continue due to the
was taken out said reason.
from the call
book on • 02.11.2015 - The AR
03.05.2019 in of the Petitioner stated
view of the that the Petitioner had
Office filed a writ before the
Memorandum Delhi High Court and
issued vide therefore the matter
F.No. may be kept in
437/143/2009- abeyance.
Cus.IV dated
03.05.2019. • 18.11.2015 - The
• Impugned SCN Noticees were
was transferred requested to file their
to the call book replies as promised by
on 17.03.2021 in them in the personal
light of the hearing held earlier.
ruling of the The Noticees were
Supreme Court also requested to
in Canon India provide stay order of
Private Limited Hon'ble High Court of
v. Commissioner Delhi in order to keep
of Customs and the matter in abeyance
Board's as requested by them.
Instruction No. However, no reply or
04/2021 - any stay order was
Customs dated received. Also,
17.03.2021. nobody appeared on
given date and time.
• The impugned
SCN was taken • 16.12.2015: The
out of the call Noticees were
book on specifically conveyed
01.04.2022 in that this was the last
view of the personal hearing.
validation owing They were reminded
to Section 97 of that they had not
the Finance Act, submitted their replies
2022. 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
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 sub-
judice, 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.
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
