Bombay High
Court Makes Customs Department 'Pay' For Delay In
Deciding Sushitex Exports Case
[ABS
News Service/29.01.2022]
The
Bombay High Court has ordered the customs department to refund an amount of Rs 2 crore along with interest of 12% per annum to a fabric-export
company, for not concluding proceedings in a customs fraud case for 23 years. Sushitex Exports (India) Ltd. had moved the High Court
seeking to set aside a show cause notice issued by customs department, in 1997,
for alleged breach of provisions of the Customs Act, 1962. The notice, demandi...
The
Bombay High Court has ordered the customs department to refund an amount of Rs 2 crore along with interest of 12% per annum to a
fabric-export company, for not concluding proceedings in a customs fraud case
for 23 years.
Sushitex
Exports (India) Ltd. had moved the high court seeking to set aside a show cause
notice issued by customs department, in 1997, for alleged breach of provisions
of the Customs Act, 1962.
The
notice, demanding Rs 4.9 crore, was issued as the
company was accused of indulging in fraudulent export and duty-free import of
polyester fabrics.
The
exporter deposited Rs 2 crore with the department in
three installments.
As
the matter remained pending for over two decades, the company sought a court
direction to quash the show cause notice and related proceedings.
Appearing
for the company, Senior Advocate DB Shroff argued that, by no interpretation of
the law, can a case be kept pending for such an unreasonably long period, such
as 23 years.
Senior
Advocate Pradeep Jetly, appearing for the department,
said though no there was no reason on record for the pendency of the case, one
of the reasons could have been the requirement of verification from the
Directorate General of Foreign Trade, Mumbai, for cancellation of the licenses.
Jetly, by
way of an affidavit, contended that due to restructuring of the department, the
authorities lost sight of the case. Also, post 2006, the company had never
approached the department for adjudicating the matter, the court was told.
The
department, while requesting for more time to conclude the proceedings, asked
the court to not entertain the plea.
The
court was not inclined to grant this request.
First,
though the company was called up by the department for a hearing in 2006, the
court said that it failed to fathom why no final order was passed immediately.
The
respondents seem to have slipped into deep slumber thereafter.
Bombay High Court
The
department has a right to initiate proceedings for violations under the Act.
But it does not have an absolute right to choose a time period to conclude
proceedings, best suiting its convenience, the court said.
"...but
the period in excess of two decades without the respondents sufficiently
explaining as to what prevented them to conclude the proceedings has to be seen
as unreasonable and the reasons assigned in the affidavit-in-reply as mere
excuses for not adjudicating the show-cause notice according to law."
Second,
it was the company that knocked the doors of the court to set aside the show
cause notice. So, had it not come to court, the show-cause notice would have
"continued to gather dust", the court remarked.
In
its order, the court also pointed to Article 14 of the Constitution, which
urges state governments to refrain from arbitrary action.