LI Network
Published on: 30 September 2023 at 22:27 IST
The Delhi High Court has sided with several exporters by overturning a longstanding show cause notice issued by the Directorate of Revenue Intelligence (DRI) fourteen years ago. The exporters had contested the notice, citing an unreasonable delay in its adjudication, a plea that the court found valid.
The Division Bench, comprising Justice Vibhu Bakhru and Justice Amit Mahajan, noted that the DRI had not made a reasonable effort to adjudicate the notice during this extended period.
The High Court stated that the controversy was resolved by its earlier ruling in the case of Swatch Group India Pvt. Ltd. & Ors. v. Union of India & Ors, emphasizing that the time allocated for adjudicating the notice had long passed.The case dated back to the years 2000-2005 when the exporters were involved in exporting readymade garments and leather goods to Russian and international customers under various schemes.
The DRI had issued a show cause notice based on intelligence suggesting fraudulent exports by certain Indian companies. Allegedly, these companies were exploiting export incentives, including drawback benefits, through inflated invoices and diversion of goods. Despite the notice, no effective steps were taken for its adjudication from April 3, 2009, to July 21, 2016. The court found no valid justifications for this delay and set aside the DRI’s attempt to recommence the adjudication proceedings.
The ruling implies that once the stipulated period for adjudication elapses, authorities such as the DRI cannot proceed with the adjudication of the show cause notice.
This verdict serves as a precedent, emphasizing the necessity of timely adjudication and preventing undue harassment of businesses due to prolonged legal processes.
The case was titled Gala International Pvt Ltd and Ors. v. Additional Director General, Directorate of Revenue Intelligence, Delhi and Ors.