The Madras High Court, while upholding the SCN issued under Customs, observed that there should be an insufficient case or lack of jurisdiction to challenge the show cause notice.
The bench of Justice Senthilkumar Ramamoorthy observed that “A challenge to a show cause notice would ordinarily lie only if such show cause notice was issued without jurisdiction or if no case is made out even assuming that the allegations in the show cause notice are correct.”
The petitioner, Amg Sports is engaged in the business of importing sports goods. On the allegation that the said imported goods were mis-declared, the seizure memorandum dated 03.11.2021 was issued.
Subsequently, show cause notice dated 30.10.2023 was issued by invoking sub-section 4 of Section 28 of the Customs Act, 1962 and other applicable provisions. The present writ petition was filed in the said facts and circumstances.
The senior counsel for the assessee argued that the SCN was issued without jurisdiction, as it was not issued by the proper officer authorised to initiate proceedings under Section 28 of Customs legislation.
He also contended that the goods were imported in 2019, making the show cause notice time-barred under Section 28(1) of the Act. Additionally, he stated that the partnership firm is unable to conduct business due to a lookout notice against the managing partner, thus justifying interference with the show cause and lookout notices.
Mr. V. Sundareswaran, the counsel for the respondent contended that the show cause notice was issued by the Commissioner of Customs, who is authorised under the Customs Act, including Section 5. He adds that the petitioner had previously filed writ petition regarding one of the bills of entry, and no favourable orders were issued in that petition.
And, according to another counsel of the respondents, Mr. H. Siddarth, the proper officer, issued the show cause notice and that reasons are set out for invoking the extended period of limitation under sub-section 4 of Section 28 of the Customs Act.
The High court noted that the SCN was issued under sub-section 4 of Section 28 read with Section 124 and Section 110AA of the Customs Act. The notice alleged suppression of facts and wilful misstatement.
The bench stated that petitioner could not establish that the Commissioner of Customs does not qualify as a proper officer for purposes of initiating proceedings under Section 28 (4) of the Customs Act and the SCN was issued within the 5 year period of limitation under sub-section 4 of Section 28.
The High Court noted that a challenge to such a notice typically lies only if issued without jurisdiction or lacks merit even if allegations are true, neither of which applies here.
With regards to the look out notice issued against the Managing Director, the court opined that such look out notice should be challenged in accordance with law by a person to whom such look out notice was issued.
As the writ petition was filed by the partnership firm and not the individual to whom the lookout notice was issued, and considering the delay in challenging the seizure memorandum issued on 03.11.2021, the court found the petition unsustainable. It was dismissed consequently.
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