The Delhi High Court has allowed an appeal filed by the Commissioner of Customs, Inland Container Depot (Export), Tughlakabad, in a matter concerning the jurisdiction of Directorate of Revenue Intelligence (DRI) officers to issue show cause notices under the Customs Act, 1962.
The Division Bench of Justice Prathiba M. Singh and Justice Shail Jain set aside the earlier order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), which had remanded the case pending clarification on the DRI’s authority. The High Court has now directed that the appeal before CESTAT (C/434/2011) be restored to its original position for adjudication in accordance with law.
The central issue revolves around whether DRI officers qualify as “proper officers” under Section 2(34) of the Customs Act, enabling them to issue demand or recovery notices under Section 28.
Earlier, in Mangali Impex Ltd. v. Union of India (2016), the Delhi High Court had held that DRI officials lacked such authority, prompting multiple remand orders by CESTAT in pending cases.
However, the Supreme Court’s ruling in Canon India Pvt. Ltd. v. Commissioner of Customs (2021) initially supported that interpretation, holding that DRI officials were not “proper officers.” But in a subsequent review judgment, the apex court revisited its stance, recognizing DRI officers and other investigative units as “proper officers” under the Act, following government notifications and the 2022 Finance Act amendments.
In its detailed review, the Supreme Court clarified that DRI officers have been validly empowered to issue show cause notices under Section 28 through various notifications since 1990. The earlier Canon India verdict had overlooked key statutory circulars and amendments. Section 97 of the Finance Act, 2022, retrospectively validated such notices.
The Court further set aside the Mangali Impex decision and approved the Bombay High Court’s interpretation in Sunil Gupta v. Union of India, confirming the jurisdiction of DRI officers.
Acknowledging the Supreme Court’s latest ruling—referred to as Canon-II—the Delhi High Court noted that the question of DRI jurisdiction “stands conclusively settled.” Consequently, the earlier CESTAT order based on Mangali Impex could no longer hold.
The bench allowed the customs department’s appeal, directing both parties to appear before the Tribunal. CESTAT has been asked to proceed with appropriate orders after verifying whether the main matter lies before it or the adjudicating authority. The case was directed to be listed before CESTAT on November 25, 2025.
Case Details
Case Title: Commissioner Of Customs, Inland Container Depot (Export) Tughlakabad, Delhi Versus Sudhir Gulati
Case No.: CUSAA 15/2021& CM APPL. 10496/2021
Date: 06/10/2025
Counsel For Petitioner: Harpreet Singh, SSC
Counsel For Respondent: Bharat Bhushan
