Gujarat High Court
Geochem Middle East vs Union Of India on 12 November, 2025
Author: A. S. Supehia
Bench: A.S. Supehia
NEUTRAL CITATION
C/SCA/10663/2021 ORDER DATED: 12/11/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 10663 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 15887 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 15885 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 15796 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 15655 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 15536 of 2021
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GEOCHEM MIDDLE EAST & ANR.
Versus
UNION OF INDIA & ORS.
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Appearance:
MR HARDIK P MODH, MR DK TRIVEDI, PYDIVYESHVAR, ADVOCATES
for the Petitioners
MS HETVI H. SANCHETI, MR UTKARSH R. SHARMA, PRIYANK LODHA,
MS HETAL G. PATEL, ADVOCATES for the respective RESPONDENT S
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CORAM:HONOURABLE MR. JUSTICE A.S. SUPEHIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
Date : 12/11/2025
COMMON ORAL ORDER
(PER : HONOURABLE MR. JUSTICE A.S. SUPEHIA)
1. At the outset, learned advocates appearing for the
respective parties have submitted that the issue raised in the
present writ petition is covered by the order dated 12.03.2025
passed by the Coordinate Bench in Special Civil Application
No.13997 of 2023 along with Special Civil Application
No.14027 of 2023, more particularly in paragraph No.3 thereof.
2. In the order dated 12.03.2025, the Coordinate Bench has
passed the following order: -
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"3. Considering the above submissions, these petitions are disposed
of in view of the conclusion arrived at in the decision of the Hon'ble
Apex Court in case of Canon India Pvt. Ltd. (Supra) holding that the
notice and proceedings initiated by the DRI under the provisions of
Customs Act are valid proceedings having jurisdiction as under:-
"168. In view of the aforesaid discussion, we conclude that:
(i) DRI officers came to be appointed as the officers of
customs vide Notification No. 19/90-Cus (N.T.) dated
26.04.1990 issued by the Department of Revenue, Ministry of
Finance, Government of India.This notification later came to
be superseded by Notification No. 17/2002 dated 07.03.2002
issued by the Department of Revenue, Ministry of Finance,
Government of India, to account for administrative changes.
(ii) The petition seeking review of the decision in Canon India
(supra) is allowed for the following reasons:
a. Circular No. 4/99-Cus dated 15.02.1999 issued by the
Central Board of Excise & Customs, New Delhi which
empowered the officers of DRI to issue show cause notices
under Section 28 of the Act, 1962 as well as Notification No.
44/2011 dated 06.07.2011 which assigned the functions of the
proper officer for the purposes of Sections 17 and 28 of the
Act, 1962 respectively to the officers of DRI were not brought
to the notice of this Court during the proceedings in Canon
India (supra). In other words, the judgment in Canon India
(supra) was rendered without looking into the circular and the
notification referred to above thereby seriously affecting the
correctness of the same.
b. The decision in Canon India (supra) failed to consider the
statutory scheme of Sections 2(34) and 5 of the Act, 1962
respectively. As a result, the decision erroneously recorded
the finding that since DRI officers were not entrusted with the
functions of a proper officer for the purposes of Section 28 in
accordance with Section 6, they did not possess the
jurisdiction to issue show cause notices for the recovery of
duty under Section 28 of the Act, 1962.
c. The reliance placed in Canon India (supra) on the decision
in Sayed Ali (supra) is misplaced for two reasons - first, Sayed
Ali (supra) dealt with the case of officers of customs
(Preventive), who, on the date of the decision in Sayed Ali
(supra) were not empowered to issue show cause notices
under Section 28 of the Act, 1962 unlike the officers of DRI;
and secondly, the decision in Sayed Ali (supra) took into
consideration Section 17 of the Act, 1962 as it stood prior to
its amendment by the Finance Act, 2011. However, the
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C/SCA/10663/2021 ORDER DATED: 12/11/2025
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assessment orders, in respect of which the show cause notices
under challenge in Canon India (supra) were issued, were
passed under Section 17 of the Act, 1962 as amended by the
Finance Act, 2011.
(iii) This Court in Canon India (supra) based its judgment on
two grounds: (1) the show cause notices issued by the DRI
officers were invalid for want of jurisdiction; and (2) the show
cause notices were issued after the expiry of the prescribed
limitation period. In the present judgment, we have only
considered and reviewed the decision in Canon India (supra)
to the extent that it pertains to the first ground, that is, the
jurisdiction of the DRI officers to issue show cause notices
under Section 28. We clarify that the observations made by
this Court in Canon India (supra) on the aspect of limitation
have neither been considered nor reviewed by way of this
decision. Thus, this decision will not disturb the findings of
this Court in Canon India (supra) insofar as the issue of
limitation is concerned.
(iv) The Delhi High Court in Mangali Impex (supra) observed
that Section 28(11) could not be said to have cured the defect
pointed out in Sayed Ali (supra) as the possibility of chaos and
confusion would continue to subsist despite the introduction
of the said section with retrospective effect. In view of this,
the High Court declined to give retrospective operation to
Section 28(11) for the period prior to 08.04.2011 by
harmoniously construing it with Explanation 2 to Section 28 of
the Act, 1962. We are of the considered view that the decision
in Mangali Impex (supra) failed to take into account the policy
being followed by the Customs department since 1999 which
provides for the exclusion of jurisdiction of all other proper
officers once a show cause notice by a particular proper
officer is issued. It could be said that this policy provides a
sufficient safeguard against the apprehension of the issuance
of multiple show cause notices to the same assessee under
Section 28 of the Act, 1962. Further, the High Court could not
have applied the doctrine of harmonious construction to
harmonise Section 28(11) with Explanation 2 because Section
28(11) and Explanation 2 operate in two distinct fields and no
inherent contradiction can be said to exist between the two.
Therefore, we set aside the decision in Mangali Impex (supra)
and approve the view taken by the High Court of Bombay in
the case of Sunil Gupta (supra).
(v) Section 97 of the Finance Act, 2022 which, inter-alia,
retrospectively validated all show cause notices issued under
Section 28 of the Act, 1962 cannot be said to be
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unconstitutional. It cannot be said that Section 97 fails to cure
the defect pointed out in Canon India (supra) nor is it
manifestly arbitrary, disproportionate and overbroad, for the
reasons recorded in the foregoing parts of this judgment. We
clarify that the findings in respect of the vires of the Finance
Act, 2022 is confined only to the questions raised in the
petition seeking review of the judgment in Canon India
(supra). The challenge to the Finance Act, 2022 on grounds
other than those dealt with herein, if any, are kept open.
(vi) Subject to the observations made in this judgment, the
officers of Directorate of Revenue Intelligence,
Commissionerates of Customs (Preventive), Directorate
General of Central Excise Intelligence and Commissionerates
of Central Excise and other similarly situated officers are
proper officers for the purposes of Section 28 and are
competent to issue show cause notice thereunder. Therefore,
any challenge made to the maintainability of such show cause
notices issued by this particular class of officers, on the
ground of want of jurisdiction for not being the proper officer,
which remain pending before various forums, shall now be
dealt with in the following manner:
a. Where the show cause notices issued under Section
28 of the Act, 1962 have been challenged before the
High Courts directly by way of a writ petition, the
respective High Court shall dispose of such writ
petitions in accordance with the observations made in
this judgment and restore such notices for adjudication
by the proper officer under Section 28.
b. Where the writ petitions have been disposed of by
the respective High Court and appeals have been
preferred against such orders which are pending
before this Court, they shall be disposed of in
accordance with this decision and the show cause
notices impugned therein shall be restored for
adjudication by the proper officer under Section 28.
c. Where the orders-in-original passed by the
adjudicating authority under Section 28 have been
challenged before the High Courts on the ground of
maintainability due to lack of jurisdiction of the proper
officer to issue show cause notices, the respective High
Court shall grant eight weeks' time to the respective
assessee to prefer appropriate appeal before the
Customs Excise and Service Tax Appellate Tribunal
(CESTAT).
d. Where the writ petitions have been disposed of by
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the High Court and appeals have been preferred
against them which are pending before this Court, they
shall be disposed of in accordance with this decision
and this Court shall grant eight weeks' time to the
respective assessee to prefer appropriate appeals
before the CESTAT.
e. Where the orders of CESTAT have been challenged
before this Court or the respective High Court on the
ground of maintainability due to lack of jurisdiction of
the proper officer to issue show cause notices, this
Court or the respective High Court shall dispose of
such appeals or writ petitions in accordance with the
ruling in this judgment and restore such notices to the
CESTAT for hearing the matter on merits.
f. Where appeals against the orders-in-original
involving issues pertaining to the jurisdiction of the
proper officer to issue show cause notices under
Section 28 are pending before the CESTAT, they shall
now be decided in accordance with the observations
made in this decision.
4. In view of the directions issued by the Hon'ble Apex Court
in case of Canon India Pvt. Ltd. (Supra) in Clause (c) of Sub
paragraph No.(vi) of Paragraph 168, eight weeks time is
granted to the petitioners to prefer the appeal before the
CESTAT challenging the impugned Order-in-Original. These
petitions are disposed of accordingly."
3. Thus, in light of the observations recorded by the
Coordinate Bench, more particularly in paragraph No.3, the
present writ petitions stand disposed of accordingly.
Sd/-
(A. S. SUPEHIA, J)
Sd/-
(PRANAV TRIVEDI,J)
MAHESH/SB/01
