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2024 DIGILAW 1667 (GUJ)

Aditya Exports v. Union Of India

2024-08-06

BHARGAV D.KARIA, NIRAL R.MEHTA

body2024
ORDER : BHARGAV D. KARIA, J. 1. By this petition under Articles 226 and 227 of the Constitution of India, the petitioner has prayed for the following reliefs: ”A. That your Lordships be pleased to issue a writ in the nature of Certiorari quashing the impugned Show Cause notice dated 23.04.2024 (Annexure H) as issued by Respondent No. 2 and all its connected proceedings as commenced thereupon by Respondent No. 2 as being unconstitutional, illegal and violative of the fundamental rights of the Petitioner and other constitutional provisions of the Constitution of India. B. Your Lordships be pleased to issue and appropriate writ order or direction in the nature of a writ of mandamus and or a writ of certiorari or any other appropriate writ order or direction quashing and setting aside the Seizure Memo dated and the Letters dated 11-5-2023 Annx ‘F’ and 10-11-2023 Annx ‘F’ and 25/4/23, Annx ‘E’ issued to the bankers of the Petitioners and all such other actions as being without authority and jurisdiction. C. Your Lordships be pleased to issue appropriate writ order or direction directing payment of costs including exemplary costs upon Respondents 3 to 7 for gross abuse of the process and the harassment meted out to the Petitioner and others for their illegal actions till date. D. Your Lordships be pleased to pending the hearing and final disposal of the present Petition stay the operation, implementation and further process of the impugned SCN dated 23-4-2024 Annx ‘H’ and all its connected proceedings. And also direct the Respondents 3 to 7 to suspend their actions of Seizure & freezing of bank accounts of the Petitioner. E. Your Lordships be pleased to pending issuance of notice and further hearing of the present petition grant ex parte ad interim relief in terms of prayer D above.” 2. And also direct the Respondents 3 to 7 to suspend their actions of Seizure & freezing of bank accounts of the Petitioner. E. Your Lordships be pleased to pending issuance of notice and further hearing of the present petition grant ex parte ad interim relief in terms of prayer D above.” 2. The glaring fact of the case is that though the petitioner has approached Hon’ble Punjab and Haryana High Court on the very same subject challenging the initiation of proceedings by the Additional Director of Revenue Intelligence (DRI), the petitioner has approached this Court on a differently worded prayer praying for the same reliefs by challenging the subsequent issuance of letters, show cause notices and seizure memos in continuation of the proceedings which were already sub-judice before the Hon’ble Punjab and Haryana High Court in Writ Petition No.11575/2023 wherein the petitioner has prayed for the following reliefs: “I) Issue a Writ in the nature of Mandamus, Certiorari or Appropriate Writ for quashing of the Summons/Notices Dated 23rd April 2023 (P-2) and 03rd May 2023 (P-7), Arrest Memo Dated 25.04.2023 (P-3) and Panchnama- cum-Resumption Memo Dated 11th May 2023 (P-8) issued under or actions take under DRI File No. DRI/LDZU/INT-NIL/ENQ-15/2023; II) Issue a Writ in the nature of Certiorari of Appropriate Writ calling for complete records of DRI File No. DRI/LDZU/INT-NIL/ENQ- 15/2023; III) During the pendency of this Writ Petition issue a Writ of Mandamus that no coercive action shall be taken against the Petitioner and its partners or employees; IV) In the alternative if any of the partners or employees of the Petitioner is required to be present before Respondent No.2 for recording their statement on behalf of the Petitioner, appropriate directions to the Respondents be issued to allow the presence of Petitioner's advocate at a visible but not audible distance during the course of interrogation and/or video recording of the statement of any of the partners or employees of the Petitioner; V) Pass any such orders which this Hon'ble Court deem fit and necessary; VI) Exempt the petitioner from filling the certified/typed & more legible copy of Annexures.” 3. On comparison of both the prayers made before this Court as well as the prayers made before Hon’ble Punjab and Haryana High Court, we are of the opinion that the petitioner has tried to approach different forums on the same subject matter. 4. Learned advocate Mr. On comparison of both the prayers made before this Court as well as the prayers made before Hon’ble Punjab and Haryana High Court, we are of the opinion that the petitioner has tried to approach different forums on the same subject matter. 4. Learned advocate Mr. Hasit Dave appearing for the petitioner submitted that as stated in the impugned show cause notice, a team of officers of DRI Ludhiana Zonal Unit was authorised by Additional Director General, Ludhiana Zonal Unit, to investigate, inspect and search the premises of Noticee No.1 i.e. the petitioner, which powers are conferred upon the Additional Director General, Directorate of Revenue Intelligence vide notification of Ministry of Commerce and Industry (Department of Commerce) dated 05.08.2016 under sub-section (2) of section 21 and second proviso to section 22 of the Special Economic Zones Act, 2005. It was submitted that the officer who has been conferred with the power by the aforesaid notification could not have delegated the power to the team of DRI Ludhiana Zonal Unit, to carry out search and other investigation procedures under the provisions of the Customs Act, 1962. 5. The aforesaid submission of learned advocate Mr. Hasit Dave was also made in the petition filed before the Hon’ble Punjab and Haryana High Court in the aforesaid writ petition which is culled out from the copy of the petition annexed with the paper book as under : “11. At this juncture, it is important to state that the case initiated by the Respondent No. 2 is without any jurisdiction and is illegal in the eyes of law for the reason that the Respondents are not the authorised 'Proper Officer' in terms of the Act, to conduct the enquiry/investigation. In the above background, it is stated with utmost respect and humility that the Respondents have no power and jurisdiction under the Act to issue summons or take any action contemplated in Chapter XII, XIII and XIV of the Act for the reason that such action can only be taken by "Proper Officer" of the Custom Department. By no stretch of imagination, officers of the Respondents can be taken as "proper officer" contemplated under Section 2(34) of the Act. 12. At this instance, it is pertinent to state that the Hon'ble High Court of Chhattisgarh in the case of Vijay Baid Vicky v. Union of India and Anr. By no stretch of imagination, officers of the Respondents can be taken as "proper officer" contemplated under Section 2(34) of the Act. 12. At this instance, it is pertinent to state that the Hon'ble High Court of Chhattisgarh in the case of Vijay Baid Vicky v. Union of India and Anr. (Writ Petition (Civil) No. 5388 Of 2021] relied on the judgement of Hon'ble Apex Court Cannon India Pvt. Ltd. v. Commissioner of Customs ( AIR 2021 SC 1699 ], whereby the Hon'ble High Court held that issuance of notice, summons or any action taken under Sections 108 and 110 of the Act by the Respondents is without any authority of law and are not sustainable… xxx 15. Even in the present case, the Respondents have not shown or produced any document to evidence the fact that the concurrence of Development Commissioner of SEZ Unit was taken by the Respondents before or after initiating any enquiry, search or seizure at the premises of the Petitioner, Shed No. 85-88, Sector-I, Kandla Special Economic Zone, Ghandhidham. Moreover, the Respondent No. 2 has not even produced any document to substantiate that this DRI file no. DRI/LDZU/INT-NIL/ENQ-15/2023 has been initiated under the instruction of Respondent No. 1. Thus, the whole proceeding initiated under the above mentioned DRI file is illegal and without any jurisdiction and wrongly exercising of power by the certain officers of the Respondents at the behest of competitor of the Petitioner.” 6. Similar submissions were made before this Court. Reference was also made to the Notification No.25/2022 dated 31st March, 2022 and Notification No. 26/2022 dated 31st March, 2022 issued by Central Board of Indirect Taxes and Customs to point out that the Intelligence Officer in the Directorate General of Revenue Intelligence could not have invoked the provisions of sections 104, 108 and 110(5) of the Customs Act, 1962 for arrest, seizure and for attachment of the bank accounts etc. 7. It was submitted that the powers exercised by the Intelligence Officer for arrest, seizure and attachment of the bank account could not have been exercised at all. Same contentions were also raised before Hon’ble Punjab and Haryana High Court by the petitioner as under: “27. 7. It was submitted that the powers exercised by the Intelligence Officer for arrest, seizure and attachment of the bank account could not have been exercised at all. Same contentions were also raised before Hon’ble Punjab and Haryana High Court by the petitioner as under: “27. That the following questions of law arise for adjudication by this Hon'ble Court: A. WHETHER the case initiated by the Respondent No. 2 is without any jurisdiction and is illegal in the eyes of law for the reason that the Respondents are not the authorised 'Proper Officer' in terms of the Act, to conduct the enquiry/investigation? B. WHETHER the enquiry and the investigation conducted by the Respondents in the SEZ Unit is illegal and improper because no search or enquiry can be conducted by the officers of the Respondents without the concurrence of Development Commissioner of SEZ Unit? C. WHETHER the malafides on the part of Respondent no. 2 stem largely from the fact that in case the Custom Authorities had any doubt on the origin of Goods, the Custom Authority would have invoked the power vested with them to conduct inspection contemplated in Rule 4, 5 and 6 of the Custom (Administration of Rules of Origin under Trade Agreements) Rules, 2020? D. WHETHER once the Goods have been released in Domestic Tariff Area ("DTA") after payment of requisite duty, the Respondents definitely cannot go into the question of validity of Certificate of Origin ("COO")? E. WHETHER the actions of the Respondents are violative of fundamental rights as envisaged under Article 20(3) and Article 21 of the Constitution of India? F. WHETHER the Summons issued by the Respondent No. I were without jurisdiction? G. WHETHER the partners or employees of the Petitioner are entitled to get the presence of an advocate at a visible but not audible distance during the course of interrogation and/or video recording of the statement of the Petitioner? H. WHETHER the Respondent No. 2, can issue summons yet again if the partners of the Petitioner has been granted bail under the same offence?” 8. The above questions of law raised before Hon’ble Punjab and Haryana High Court are further substantiated by learned advocate Mr. Dave by relying upon the aforesaid notifications. H. WHETHER the Respondent No. 2, can issue summons yet again if the partners of the Petitioner has been granted bail under the same offence?” 8. The above questions of law raised before Hon’ble Punjab and Haryana High Court are further substantiated by learned advocate Mr. Dave by relying upon the aforesaid notifications. Moreover, it is also not in dispute that the petitioner has challenged the show cause notice dated 23.04.2024 issued by the proper officer i.e. Commissioner of Customs for which the petitioner is required to file reply and adjudication is required to take place in accordance with law. 9. Learned advocate Mr. Hasit Dave has also referred to and relied upon the decision in case of Meenakshi International v. Principal Commissioner of Customs reported in (2023) 2 Centax 162 (Del.) wherein Hon’ble Delhi High Court has affirmed the decision of Tribunal whereby the Tribunal set aside the decision of Commissioner (Appeals) by arriving at finding of fact that customs did not have jurisdiction within Special Economic Zone established under the Special Economic Zone Scheme by the Ministry of Commerce, Government of India and the proceedings initiated by the Customs were beyond the jurisdiction. Referring to the aforesaid decision, it was submitted by learned advocate Mr. Dave that in facts of the case also, it may be held that the customs had no jurisdiction within the special economic zone and therefore, the impugned show cause notice is required to be quashed and set aside. 10. It was also pointed out by learned advocate Mr. Dave that prayers made before the Hon’ble Punjab and Haryana High Court were limited to issuance of summons dated 25.04.2023 and with regard to coercive action taken by the officers of DRI and request was made not to take any coercive action. 11. It was therefore, submitted that the scope of this petition is much wider than the scope of petition before the Hon’ble Punjab and Haryana High Court as in the present petition, the petitioner has challenged the show cause notice as well as the seizure memo and the attachment order passed by Intelligence Officer of DRI who has no jurisdiction to exercise such powers. 12. 12. Having heard the learned advocates for the petitioner, it appears that the petitioner has challenged the impugned show cause notice dated 23.04.2024 only relying upon the circular issued by the Central Government conferring power upon the Additional Director of Revenue Intelligence under the provisions of sub- section(2) of section 21 read with proviso to section 22 of the Customs Act by Notification dated 05.08.2016. 13. As per the aforesaid notification, the powers are to be exercised by the Additional Directorate of Revenue Intelligence for the offences under the Customs Act, 1962 and accordingly, once the powers are delegated, Intelligence Officer would also exercise the same power as to be exercised under the notification by the proper officer. 14. In such circumstances, the contention raised on behalf of the petitioner that the Intelligence Officer has no jurisdiction is without any merit and is not tenable. 15. With regard to the contention that the prayers made by the petitioner before the Hon’ble Punjab and Haryana High Court are limited only against summons dated 25.04.2023 and with regard to proposed coercive action to be taken by DRI officer at the relevant point of time and the scope of the present petition are different is also not palatable because the genesis of the entire impugned show cause notice and the powers exercised by the Intelligence Officer of the DRI emanates from the summons dated 23.04.2023 and 03.05.2023 and therefore, we are of the opinion that the action which are challenged in this petition are in furtherance of the investigation which is challenged before Hon’ble Punjab and Haryana High Court and accordingly, it would amount to same cause of action which the learned advocate for the petitioner has tried to distinguish. Show cause notice is culmination of the investigation carried out by the DRI pursuant to summons dated summons dated 23.04.2023 and 03.05.2023 and therefore, it cannot be said that the present petition is having a different scope than that of the petition which is pending before Hon’ble Punjab and Haryana High Court. It is also pertinent to note that the petitioner has not disclosed in memo of the petition with regard to status of the petition pending before the Punjab and Haryana High Court except stating in paragraph No. 14 as under: “14. It is also pertinent to note that the petitioner has not disclosed in memo of the petition with regard to status of the petition pending before the Punjab and Haryana High Court except stating in paragraph No. 14 as under: “14. It is pertinent to mention here that the Petitioner has filed a civil writ petition before Punjab and Haryana High Court (CWP No. 11575 of 2023) for quashing of the Summons and the arrest Memo on 23.05.2023 and the same is under consideration and listed for the final hearing. Copy of the Petition as filed by the Petitioner before the Punjab & Haryana High Court being WP 11575 of 2023 is annexed h/w and marked Annexure I" 16. In view of above averments made in this petition, the petitioner was aware about the pendency of the petition on the same subject matter except the further proceedings which have culminated into impugned show cause notice. 17. In such circumstances, we are of the opinion that petition being devoid of any merit and when the matter is already sub- judice before Hon’ble Punjab and Haryana High Court, this petition is summarily dismissed.