Madras HC quashes Inquiry Report and Proceedings due to Procedural Lapses under CBLR Regulation 17(5) [Read Oder]
Considering that there were procedural lapses in submitting the inquiry report, the Madras HC quashed the proceedings
Madras High Court – CBLR Regulation – Inquiry Report – CBLR – Taxscan
Madras High Court – CBLR Regulation – Inquiry Report – CBLR – Taxscan
In a recent ruling, the Madras High Court quashed the inquiry report and the proceedings due to procedural lapses under Regulation 17(5) of the Customs Broker Licensing Regulation, 2018.
Jai Logistics Services Pvt. Ltd., the petitioner, a customs broker firm, challenged the suspension of its license by the Principal Commissioner of Customs, Chennai, and subsequent proceedings initiated for the revocation of its license. The petitioner was also facing parallel proceedings under the Customs Act, 1962, for alleged fraud related to Duty Drawback claims by an exporter.
A show-cause notice was issued to the petitioner on 21.06.2020 by the Principal Commissioner of Customs under Regulation 17(1) of Customs Brokers Licensing Regulations (CBLR), 2018 for revocation of license. The petitioner submitted that the concerned authority delayed the inquiry report beyond the mandated 90-day period rendering the entire proceedings void.
Tax Audit Made Easy: Clause-by-Clause Guidance - Click here to know more
The petitioner further submitted that even though the government had extended deadlines due to the COVID-19 pandemic, the inquiry report was still submitted after the extended deadline of December 31, 2020. The petitioner relied on various judicial precedents and prayed that procedural lapses in adhering to the regulatory timelines should result in the dismissal of the proceedings initiated against them.
On the contrary, the respondent's counsel argued that the inquiry report was completed and submitted on December 30, 2020, within the extended timeframe due to the COVID-19 pandemic. The counsel contended that the offices of the Inquiry Officer and Principal Commissioner were in the same complex, ensuring timely submission. The counsel submitted that this petition was premature, as the final decision was yet to be made by the Principal Commissioner.
After hearing the arguments, the court directed the respondents to produce official files of the Customs Department maintained by the Department so far regarding the inquiry report and communication to the Commissioner.
Tax Audit Made Easy: Clause-by-Clause Guidance - Click here to know more
Justice C. Saravanan observed the files submitted by the respondents. The court noticed that a note was prepared for communication of the Inquiry Report on 30.12.2020 to the petitioner and the Principal Commissioner had approved it on 2.2.2021. However, the files did not disclose anything about the inquiry report of the petitioner that was communicated to the office on 30.12.2020.
The court further observed while the timeline for submitting the inquiry report was extended due to the pandemic, the delay in forwarding the report submitted on 30.12.2020 but communicated only on 07.01.2021 which violated the 90-day deadline under Regulation 17(5).
The court acknowledged that the pandemic led to extended timelines under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, but no further extensions were granted after December 2020.
Tax Audit Made Easy: Clause-by-Clause Guidance - Click here to know more
Therefore, the court quashed the inquiry report and subsequent proceedings initiated against the petitioner due to procedural lapses. The court allowed the petitioner’s writ in W.P. No. 5787 of 2021 and closed the other writ petitions
To Read the full text of the Order CLICK HERE
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
