Umesh Gulhar vs. Principal Commissioner Of Custom (Import)

Facts

The Petitioner, Umesh Gulhar, was a Director in a China-based company, M/s. Tessuti (HK) Ltd., which exported 'Narrow Woven Fabrics' to an Indian importer, J.R. International, between October and November 2010. The Respondent-Department issued a show cause notice on November 7, 2013, to the importer, with the Petitioner's company as a co-noticee, demanding differential duty, interest, and penalty for alleged mis-declaration. The importer challenged this notice, and the matter was tagged with other petitions. A coordinate bench of the Delhi High Court, in a judgment dated December 10, 2024, quashed the show cause notice dated November 7, 2013, and any final orders passed pursuant to it, citing undue delay in adjudication. The present writ petition challenges the Order In Original dated January 15, 2024, passed against the Petitioner.

Held

The Court held that the present writ petition should be allowed on the same grounds as the coordinate bench's decision in the batch matters, including the case of M/s J.R. International v. Principal Commissioner of Customs & Anr. The Court noted that the previous judgment had quashed the show cause notice dated November 7, 2013, and any final orders passed pursuant thereto, due to an undue and unexplained delay in adjudication, violating the principles of timely resolution of disputes. The Court found that the Petitioner was a co-noticee in the proceedings that led to the quashed show cause notice and the subsequent Order In Original. Therefore, following the precedent set by the coordinate bench, the Court quashed the show cause notice dated November 7, 2013, and the Order In Original dated January 15, 2024, emanating from it. The ratio decidendi is that if a show cause notice and the consequent adjudication order have been quashed by a higher court due to inordinate delay, any subsequent order passed against a co-noticee based on the same show cause notice must also be quashed.

Key Issues

1. Whether the Order In Original dated January 15, 2024, and the preceding show cause notice dated November 7, 2013, are liable to be quashed on grounds of undue delay in adjudication, as per Section 128 of the Customs Act, 1962? Petitioner's Arguments: The Petitioner argued that since a coordinate bench of this Court, in a similar batch of matters including the case of M/s J.R. International v. Principal Commissioner of Customs & Anr., had already quashed the identical show cause notice dated November 7, 2013, and the resultant Order In Original dated January 15, 2024, on the grounds of unreasonable delay in adjudication, the present petition should also be allowed on the same basis. The Petitioner relied on the judgment in W.P.(C) 6714/2024 and other tagged matters, which emphasized the obligation of authorities to conclude adjudication with expedition. Respondent's Arguments: The judgment does not record any specific arguments made by the Respondent-Department in opposition to the Petitioner's claim.