The Delhi High Court has declined to exercise its writ jurisdiction over a challenge to a Customs adjudication order involving allegations of interpolation of Customs records and an alleged wrongful loss of more than ₹50 crore to the Government exchequer.
The Bench of Justice Anil Khetarpal and Justice Shail Jain held that the petitioner had an alternative statutory remedy before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) under Section 129A of the Customs Act, 1962.
The petitioner had approached the High Court challenging the impugned Customs order and raising grievances concerning the manner in which the adjudication proceedings were conducted.
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One of the principal grievances raised before the High Court was that the petitioner had been scheduled to appear virtually before the Adjudicating Authority but was allegedly not provided the link necessary to participate in the virtual hearing. It was further contended that the reply submitted by the petitioner had not been considered while passing the impugned order.
The petitioner also claimed to be a practising Advocate. However, the High Court specifically noted that the allegations forming the subject matter of the Customs proceedings did not relate to the discharge of his professional duties as an Advocate.
The allegations in the underlying proceedings were serious. According to the impugned order, the case concerned alleged interpolation of Customs records, which was stated to have resulted in wrongful loss of more than ₹50 crore to the Government exchequer.
The High Court also noted that the adjudication proceedings culminated in a consolidated order covering 26 noticees, including the petitioner. This aspect assumed significance because the petitioner was challenging factual aspects of the adjudication order, while the order itself dealt collectively with a large number of noticees.
The Bench observed that the complete copy of the impugned order had not been placed before the Court. More importantly, paragraph 18.7 of the order, which appeared to concern the petitioner, contained missing sentences in the copy produced before the High Court, with only its final four lines available.
The Court also noted a discrepancy concerning the amount allegedly seized from the petitioner. The impugned order recorded that ₹88.05 lakh had been seized, whereas counsel for the petitioner submitted that the actual amount seized was ₹50 lakh.
The High Court concluded that the issues raised by the petitioner would require examination of the factual record. This included the question of whether an adequate opportunity of hearing had been granted and whether the petitioner’s reply had actually been considered by the Adjudicating Authority.
The Bench emphasised that the impugned order was a consolidated adjudication order concerning several noticees and, crucially, that a statutory appellate remedy before CESTAT was admittedly available to the petitioner under the Customs Act.
In these circumstances, the Court declined to examine the disputed factual issues in exercise of its writ jurisdiction. Instead, it granted liberty to the petitioner to avail the statutory appellate remedy before CESTAT, if so advised.
The order reiterates an important procedural principle in tax and Customs litigation: where the statute provides an effective appellate mechanism, the High Court may decline to entertain a writ petition, particularly when the controversy requires examination of disputed facts and the statutory appellate forum is competent to undertake that exercise.
In the present matter, the Court did not adjudicate on the merits of the allegations of interpolation of Customs records. It also did not record a finding on whether the petitioner was actually denied a virtual hearing or whether his reply was ignored. Instead, the Bench considered those matters to be issues requiring examination of the factual record in the appropriate appellate proceedings.
The Delhi High Court accordingly disposed of the writ petition along with the pending applications. The Court’s order leaves the substantive Customs dispute open for consideration before the statutory appellate forum.
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