The Bombay High Court ordered an amount of ₹2 crores deposited under protest by a company with the Customs Commissioner should be refunded due to delay of 23 years in giving a final order.
A show-cause notice was issued to the Company under section 124 read with section 28 of the Customs Act, 1962. It was alleged therein that the Company had indulged in fraudulent export of polyester fabrics and duty-free import of Polyester Filament Yarn and other items under D.E.E.C. Scheme in contravention of the provisions of the Act.
In the course of investigation preceding such show-cause notice, a raid had been conducted at the premises of the Company on 9th August 1995.
The second and the third petitioners having been arrested, it is alleged by them that they were compelled to pay an amount of Rs.68 lakh on 10th August 1995. It is further alleged that only after such payment, the Department agreed not to oppose their prayers for bail and consequently, the second and the third petitioners were released on bail by an order dated 10th August 1995 of the Additional Chief Metropolitan Magistrate, Mumbai. On subsequent occasions too, the petitioners claim to have further been forced to pay Rs.32 lakh and Rs.1 crore.
The said show-cause notice, inter alia, sought to recover the sum of Rs.2 crore, which the petitioners allege they were compelled to deposit, and adjust the same against the total demand of Rs.4,99,53,772/- mentioned in the show cause notice.
Advocate Shroff, appearing for the petitioners, contended that the proceedings have remained pending for close to two decades and a half, and by no stretch of imagination can pendency for such unreasonably long period be regarded as a reasonable period.
Advocate Pradeep Jetly, appearing for the respondents, relied upon the aforesaid affidavit-in-reply to contend that although the proceedings arising from the showcause notice have not been taken to its logical conclusion by the time the writ petition was instituted, the respondents may be granted liberty to conclude the proceedings upon consideration of the reasons assigned in the affidavit-in-reply.
The division bench of the Chief Justice Dipankar Datta and Justice M. S. Karnik after noting the so-called reasons assigned in the affidavit-in-reply of the respondents for not concluding the proceedings arising out of the impugned show-cause notice, it found absolutely no justification to hold that the respondents have acted in the manner law requires them to act.
The court directed that the sum of Rs.2 crore which the petitioners were required to deposit in course of investigation shall be returned with interest @ 12% per annum within 2 months.
Case title: Sushitex Exports (India) Ltd. & Ors. v/s. The Union of India & Anr.
Citation: WRIT PETITION (L) NO. 9641 OF 2020