Writ Petition No. 12153 of 2012. Case: Sunil Gupta Vs Union of India. High Court of Bombay (India)
| Case Number | Writ Petition No. 12153 of 2012 |
| Counsel | For Petitioner: Shri V.B. Singh with A.K. Singh, Adv. and For Respondent: Shri Pradeep S. Jetly, Adv. |
| Judges | S.C. Dharmadhikari and A.A. Sayed, JJ. |
| Issue | Customs Act, 1962 - Sections 28(11), 28 |
| Citation | 2015 (315) ELT 167 (Bom) |
| Judgement Date | November 03, 2014 |
| Court | High Court of Bombay (India) |
Judgment:
S.C. Dharmadhikari, J. (Oral)
-
By this Writ Petition, under Article 226 of the Constitution of India, the Petitioner is seeking following reliefs:
"(a) The Hon''ble Supreme Court may be pleased issue appropriate writ, order or directions for setting aside the impugned Show Cause Notice No. DRI/MZU/E/1/2008, dated 5-2-2009 in view of the fact that Respondent No. 3 is not a ''proper officer'' in terms of Section 2(34) of the Act and, therefore, the Notice as well as the entire adjudication proceedings are non-est, otiose, nugatory, null and void ab initio as held by this Hon''ble Court in "Commissioner of Customs v. Sayed Ali, (2011) 3 SCC 537 = 2011 (265) ELT 17 (SC)"
(b) That this Hon''ble Court may further be pleased to issue an appropriate writ, order or directions, declaring the amendment to Section 28 of the Customs Act, 1962 by inserting clause (11), whereby, it provided "all persons appointed as officers of Customs under sub-section (1) of Section 4 before the sixth day of July, 2011 shall be deemed to have and always had the power of assessment under Section 17 and shall be deemed to have been and always had been the proper officers for the purposes of this section" to be ultra vires and unconstitutional as the said amendment is violative of Articles 14, 19 and 21 of the Constitution of India.
(c) That this Hon''ble Court may further be pleased to issue an appropriate writ, order of directions for setting aside the Circular No. F. No. 437/143/2009-Cus. IV, dated 23rd September, 2011, whereby, in terms of the amended Section 28 of the Customs Act, 1962, directions have been issued to the relevant authorities that "Show Cause Notice issued prior to 6-7-2011 by officers of Customs, which would include officers of Commissionerates of Customs (Preventive), Directorate General of Revenue Intelligence (DRI), Directorate General of Central Excise Intelligence and similarly placed officers stand validated since these officers are retrospectively recognized as ''proper officers'' for the purpose of Section 17 and 28 of the said act" as the amendment supra on the basis of which the impugned circular has been issued, itself is ultra vires and unconstitutional.
.........."
-
The background, in which these reliefs are sought, is that the Petitioner was served with a show cause notice by the Directorate of Revenue Intelligence. This was pursuant to an investigation which was conducted. We are not concerned in this case with the fundamental rights guaranteed to the Petitioner under Article 21 of the Constitution of India. We are concerned in this case with a adjudication and which is subject matter of the Customs Act, 1962. This show cause notice, copy of which has been annexed to the Writ Petition, alleges that the Petitioner has been associated with the firms which are styled as dummy firms. During the course of investigation, it was revealed that certain goods were imported in the names of these firms. They have been misdeclared in terms of description, quantity and value. The goods were seized. Then, there is reference to six more similar consignments, which were lying at the Air Cargo Complex, Sahar, Mumbai and it has been revealed that these consignments and those earlier imported were brought in without compliance with the Customs Act, 1962. There are serious violations alleged and of this enactment. The Petitioner''s role has been also set out and in somewhat details. The Petitioner is stated to be owner of M/s. S.G.V. Industries. A statement was recorded of one Manish Amlani, partner of M/s. S.K.D. Shipping Agency, a Customs House Agent. The reference to all these materials is to be found in para 30 of the show cause notice and eventually what has been alleged therein is that the Petitioner and those named in the show cause notice are prima facie guilty of violations of the Customs Act, 1962 and several rules framed thereunder. The Petitioners have moved this Writ Petition in this Court and upon which no ad interim reliefs or interim reliefs have been granted. Resultantly, the matter could have proceeded and without being influenced by the pendency of this Writ Petition.
-
The learned Counsel appearing on behalf of the Petitioner has confined his arguments only to the legality and validity of sub-section (11) of Section 28 of the Customs Act, 1962. It is urged that this section is ultra vires the Customs Act, 1962, as the same fails to take note of the Explanation 2. In other words, it is submitted that Section 28 enables recovery of duty not levied or short levied or erroneously refunded. Sub-section (11) thereof has been inserted by Act 14 of 2011 w.e.f. 16th September, 2011. That states that notwithstanding anything to the contrary contained in any Judgment, Decree or Order of any Court of law, Tribunal or other authority, all persons appointed as officers of Customs under sub-section (1) of Section 4 before 6th July, 2011 shall be deemed to have and always had the power of assessment under Section 17 and shall be deemed to have been and always had been the proper officers for the purpose of this section.
-
It is submitted that Explanation 2 removes any doubts and states that any non-levy, short levy or erroneous refund before the date on which the Finance Bill, 2011 receives the assent of the President, continues to be governed by the provisions of Section 28 as they stood immediately before the date on which such assent is received.
-
The argument on legality and validity is premised on the fact that the Directorate of Revenue Intelligence and those working in the same cannot be termed as proper or competent officers for the purposes of the adjudicatory functions under the Customs Act, 1962. They do not answer the definition of the term "proper officer" and which has been defined in the Customs Act, 1962. In that regard, our attention has been invited to Section 2(34), which defines this term and our attention has also been invited to Section 17 of the said Act. It is urged that the functions and which have been specifically entrusted to the proper officers and which term is also defined, do not include the Director or the Directorate of Revenue Intelligence. The argument is that if the contention of the Department is accepted, then, there would be two commissionerates. The Act does not envisage such a position. It is only contemplating or envisaging a Customs Officer and the Customs Commissionerate. The Director of Revenue Intelligence is not and cannot be said to be a part of the said Commissionerate. Our attention has also been invited to the Judgment of the Hon''ble Supreme Court in the case of Commissioner of Customs v. Sayed Ali and Anr. - (2011) 3 SCC 537 = 2011 (265) ELT 17 (SC).
-
Mr. V.B. Singh, the learned Counsel appearing on behalf of the Petitioner also invited our attention to a order dated 4th February, 2013 of the High Court of New Delhi in the case of Mangali Impex Ltd. v. Union of India and Ors. - WP (Civil) No. 441 of 2013. He submits that the High Court of New Delhi is seized of similar Petitions and they have been posted for hearing and final disposal. This Court therefore either should await that adjudication or permit the Petitioner to seek time and approach the Hon''ble Supreme Court of India so that both matters can be consolidated for hearing before the Delhi High Court.
-
In any event, attention is also invited to a Judgment delivered by the Karnataka High Court in the case of Devilog Systems India v. Collector of Customs, Bangalore - 1995 (76) ELT 520 (Kar.). It is submitted that once the show cause notice is issued by an officer or authority who is not competent to issue the same, then, the entire adjudication falls. The Petitioner is not required to submit himself to the jurisdiction of any incompetent authority or officer. A show cause notice, which is ab initio void for want of competency in the authority, can be challenged by way of Writ Petition under Article 226 of the Constitution of India. This Writ Petition therefore should be entertained and cannot be dismissed summarily. Our attention has also been invited to several Tribunal Judgments by Mr. Singh. He has laid great emphasis on the observations and conclusion of the Hon''ble Supreme Court in the case of Sayed Ali (supra), where, it has been held by the Hon''ble Supreme Court that it is only the officers of Customs who are assigned functions of assessment, which of course includes reassessment. In such circumstances, they alone are competent to issue the notice under Section 28 of the Act. For these reasons, it is submitted that the basis of this Judgment has not been altered by the Parliament. The Parliament has no competence to overrule the binding Judgment of the Hon''ble Supreme Court. For such reasons, the law laid down therein continues to bind us.
-
Mr. Jetly, the learned Counsel appearing on behalf of the Revenue, on the other hand, submits that this Writ Petition challenges a show cause notice issued under the Customs Act, 1962. It is settled law that this Court does not interfere under Article 226 of the Constitution of India at the stage of show cause notice. There is no prejudice or loss to parties like the Petitioner. They can appear before the authority and contest the proceedings by raising appropriate reliefs. In such circumstances, this Writ Petition should not be entertained.
-
However, Mr. Jetly submits that even otherwise, there is no merit in the challenge to the provisions of Section 28(11) of the Customs Act, 1962. He submits that no assistance can be derived from the Judgment of the Hon''ble Supreme Court in the case of Sayed Ali (supra). There is no similarity of facts, inasmuch as the position before the Hon''ble Supreme Court was that Collector (Preventive) issued the show cause notice. In this case, the show cause notice has been issued by the Directorate of Revenue Intelligence and who was always competent to issue the same. Mr. Jetly invited our...
To continue reading
Request your trial