The division bench of Delhi High Court, in UOI v. Padmini Polymers Ltd & Anr, held that Directorate of Revenue Intelligence (DRI) has no jurisdiction to file Writ Petition under Article 226 of the Constitution of India against the order of the Settlement Commission.
In the instant case, the petitioner – Directorate of Revenue Intelligence had issued two Show Cause Notices against the respondent-assessee alleging that they had claimed fraudulent fulfilment of the export obligation. Accordingly, he demanded duty alongwith interest and penalty. The respondent-assessee approached the Settlement Commission for settlement of dues and challenged the criminal proceedings initiated against it. The Commission quashed the criminal proceedings against the assessee by holding that the department failed to establish the guilt of the assessee beyond reasonable doubt.
The DRI approached the High Court against the order of the Settlement Commission contending that the provisions of Section 127A and 127B of the Act are for bona fide applicants to approach the Settlement Commission for settlement of dues which are mistakenly not paid or over paid, and not for tax dossiers indulging in criminal activities. He also argued that it was the assessee who required proving their innocence with regard to the allegations made in the Show Cause Notice.
It was contended on behalf the respondents that the petitioner – Directorate of Revenue Intelligence has no locus standi to file the writ petition before the High Court. They argued that if the Custom department was at all aggrieved by the impugned order, then the appropriate authority could have filed the writ petition and in the instant case, the petitioner being merely an investigating authority cannot contest the adjudication by the Settlement Commission. It was also argued that only the officer of Customs who had been assigned to function either by the Central Board of Excise and Customs or by the jurisdictional Commissioner of Customs would be the “proper officer” for the purposes of assessment or re-assessment. They further relied upon the judgment of the Supreme Court in Commissioner of Customs v. Sayed Ali & Anr in this regard.
Dismissing the petition, the Bench comprising of Justices Ravindra Bhatt and Najmi Waziri observed that the DRI is not entitled to file the petition before the Court. It was noted that when the locus standi of the petitioner was asked during the course of proceedings, the DRI impleaded the Commissioner of Customs, ICD Tuglaqabad, seven years after the filing of petition. “However, the same would not validate the filing of the petition when such powers were not specifically conferred upon the DRI. Therefore, in the absence of a specific jurisdiction of the petitioner to have preferred this writ petition against the order of the Settlement Commission, the writ petition would not be maintainable.”
Read the full text of the Judgment below.
