Delhi High Court - Orders
M/S Victory Electric Vehicles ... vs Union Of India & Anr on 29 August, 2022
Author: Rajiv Shakdher
Bench: Rajiv Shakdher
$~42
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 12425/2022 & CM No.37362/2022
M/S VICTORY ELECTRIC VEHICLES INTERNATIONAL PVT
LTD (PRSENTLY KNOWN AS) VICTORY ELECTRIC
VEHICLES INTERNATIONAL LTD
(THROUGH ITS DIRECTOR) ....Petitioner
Through: Mr S. Sunil, Adv.
versus
UNION OF INDIA & ANR. ....Respondents
Through: Ms Nidhi Raman, CGSC with Mr
Chetanya Puri and Mr Zubin Singh,
Advs. for R-1.
Mr Satish Kumar, Sr. Standing
Counsel with Mr Anis Raj and Mr
Dhruv, Advs. for R-2.
CORAM:
HON'BLE MR. JUSTICE RAJIV SHAKDHER
HON'BLE MS. JUSTICE TARA VITASTA GANJU
ORDER
% 29.08.2022 [Physical Hearing/Hybrid Hearing (as per request)]
1. The principal grievance of the petitioner is, that the impugned Order- in-Original dated 25.05.2022 is based on a show cause notice ["SCN"], which is untenable in law.
2. Mr S. Sunil, who appears on behalf of the petitioner, says that the SCN could only have been issued after pre-show cause notice consultation had occurred, as contemplated in the proviso appended to Section 28(1) (a) of the Customs Act, 1962 [in short, "1962 Act"].
W.P.(C) 12425/2022 page 1 of 4 Signature Not Verified Digitally Signed By:PREM MOHAN CHOUDHARY Signing Date:06.09.2022 12:08:51
3. It is Mr Sunil's contention, that the respondents/revenue has taken a position, that a pre-consultation notice dated 14.12.2021 was served on the petitioner.
3.1 Mr Sunil says that it is the position of the petitioner, that although it did not receive the aforesaid notice dated 14.12.2021, assuming that it did receive the said notice, that by itself will not lend legal viability to the SCN dated 22.12.2021.
4. The reason Mr Sunil makes this argument is based on the provisions of Regulations 3(2) and 3(4) of the Pre-Notice Consultation Regulations, 2018 [in short "2018 Regulations"].
4.1 For this purpose, our attention has been drawn to page 152 of the case file. For the sake of convenience, the proviso to Section 28(1)(a) of the 1962 Act and the relevant regulations are extracted hereafter:
"SECTION 28. Recovery of [duties not levied or not paid or short-levied or short-paid] or erroneously refunded.--
xxx xxx xxx Provided that before issuing notice, the proper officershall hold pre-notice consultation with the personchargeable with duty or interest in such manner as may be prescribed."
"REGULATION 3. Manner of conducting pre-notice consultation. -
Pre-notice consultation shall be made in the following manner :-
xxx xxx xxx (2) The person chargeable with duty or interest may, within fifteen days from the date of communication referred to in sub-
regulation (1), make his submissions in writing on the grounds so communicated:
Provided that if no response is received, from the person to whom the grounds on which notice is proposed to be issued, is received within the specified time, the proper officer shall proceed to issue the notice to the said person without any further communication :
W.P.(C) 12425/2022 page 2 of 4 Signature Not Verified Digitally Signed By:PREM MOHAN CHOUDHARY Signing Date:06.09.2022 12:08:51 Provided further that while making the submissions, the person chargeable with duty or interest shall clearly indicate whether he desires to be heard in person by the proper officer.
xxx xxx xxx (4) Where the proper officer, after consultation, decides not to proceed with the notice with reference to the grounds communicated under sub-regulation (1), he shall, by a simple letter, intimate the same to the person concerned."
5. A perusal of the proviso does indicate that it was obligatory on the part of the respondents/revenue to serve a notice on the petitioner, with regard to the pre-consultation.
6. Although there is some dispute, as to whether pre-consultation notice letter dated 14.12.2021 (hereinafter referred to as "the notice") was served on the petitioner, Regulation 3(2) does mandate that 15 days, from the date of communication, had to be accorded for enabling the recipient of the notice to make submissions in writing.
6.1 Furthermore, the recipient of the notice, under the very same regulation, also had a right to indicate to the concerned proper officer, whether he was desirous of being heard in person.
7. The reason why such a procedure has been engrafted in the Act, as well as in the Regulations, is, evidently, to cut-out the unnecessary litigation.
8. Regulation 3(4) of the 2018 Regulations confers power on the proper officer to drop the next steps in the matter, i.e., issuance of the SCN, in case consultation with the noticee leads to the conclusion that the SCN need not be issued.
W.P.(C) 12425/2022 page 3 of 4 Signature Not Verified Digitally Signed By:PREM MOHAN CHOUDHARY Signing Date:06.09.2022 12:08:51
9. On the facts which obtain in the present case, 15 days when factored in from the date of the notice (i.e., 14.12.2021) would have expired on 29.12.2021, whereas the SCN is dated 22.12.2021.
10. Prima facie, we are of the view that the impugned order, which is predicated on the SCN, is impregnated with a legal lacunae.
11. Mr Satish Kumar, who appears on behalf of the contesting respondent, i.e., respondent no.2, says that he would require time to return with instructions.
12. In case instructions are received to resist the writ petition, counter- affidavit will be filed before the next date of hearing.
13. List the matter on 19.09.2022.
RAJIV SHAKDHER, J TARA VITASTA GANJU, J AUGUST 29, 2022 aj Click here to check corrigendum, if any W.P.(C) 12425/2022 page 4 of 4 Signature Not Verified Digitally Signed By:PREM MOHAN CHOUDHARY Signing Date:06.09.2022 12:08:51