The Delhi High Court has quashed the order passed by the Directorate General of Foreign Trade (DGFT) in cancellation of trader’s license due to 15-year delay in issuing the show cause notice (SCN).
The bench of Justice Sachin Datta has observed that despite the SCN remaining unadjudicated for decades, the cancellation order / letter dated 07.08.2019 was issued, which effectively condemned the petitioner unheard of.
The appellant/assessee has assailed a Show Cause Notice dated 02.05.2005, issued against the petitioner under the Foreign Trade (Development & Regulation) Act, 1992 (FTDR Act).
The petitioner also assails the legality and validity of the purported DEPB license cancellation letter, communicated to the Customs Department enclosing therewith the cancellation letters in respect of 38 DEPB scrips/licenses issued in favour of the petitioner.
The petitioner contended that during the period between 2002 and 2003, the petitioner was in the business of importing and exporting certain goods. On the basis of certain exports made by one M/s Ceean Commerce Pvt. Ltd., the petitioner duly applied to the office of respondent no.1 for issuance of 38 DEPB licenses with Freight on Board (FOB) value aggregating to Rs. 67,36,59,551.90 and corresponding Cost Insurance Freight (CIF) value aggregating to Rs. 8,08,38,924. These DEPB licenses were for a certain amount of duty credit and were meant to be utilized for adjusting customs duty against import of goods into India.
The impugned SCN was contested by the petitioner; certain communications were also addressed by the petitioner seeking that the relevant documents which form the basis of the impugned SCN be supplied to it. The petitioner also participated in the personal hearing that was scheduled pursuant to the impugned SCN. While reiterating its request for supply of relevant documents, various correspondences were exchanged between the petitioner and the respondent after issuance of the impugned SCN and the hearing held in respect thereof.
When the petition came up for hearing on 19.12.2024, the Court, took note of the background of the petition, expressed the view that non- adjudication of the show cause for decades was, by itself, a valid ground to set the same aside.
The court noted that the cancellation order/letter dated 07.08.2019 was passed without any prior intimation/notice to the petitioner and almost 15 years after the impugned SCN was initially issued. The basis for issuance of the 38 DEPB Scrip cancellation letters has been set out in the impugned SCN. The factual premise of the same is strenuously contested by the petitioner.
The court while allowing the petition quashed the SCN, the communication dated 07.08.2019 and the 38 DEPB Scrip Cancellation letters referred to in the impugned cancellation order/ letter dated 07.08.2019, addressed to Commissioner of Customs Department (Preventive) by the Foreign Trade Development Officer, are set aside.
Case Details
Case Title: M/S Saha Traders Versus Zonal Joint Director General Of Foreign Trade (CLA)
Case No.: W.P.(C) 7295/2021 and CM APPL.3324/2023
Date: 10.03.2025
Counsel For Appellant: Indranil Banerjee
Counsel For Respondent: Ruchir Mishra
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