DRI Officials Recognized as 'Proper Officers' Under Customs Act: Delhi HC Disposes of Petition Challenging Jurisdiction [Read Order]

In a significant order, the Delhi High Court has disposed of a writ petition challenging the jurisdiction of Directorate of Revenue Intelligence (DRI) officials to act as ‘proper officers’ under the Customs Act, 1962 relying on Supreme Court Judgement.

Rani Enterprises (petitioner) filed writ petition under Article 226 of the Constitution of India seeking the release of Goods. The petition filed contested the seizure of its goods by the DRI, Lucknow Zonal Unit, and the subsequent Show Cause Notice (SCN) dated 25th October 2021 issued by the DRI officials.

The petitioner's primary argument relied on the Supreme Court's original decision in Canon India Pvt. Ltd. v. Commissioner of Customs (Canon-I), which had held that DRI officials were not ‘proper officers’ for certain purposes under section 110 of the Customs Act.

Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here

A bench comprising Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta noted that the jurisdictional challenge was no longer tenable. The bench noted that the Canon-I judgement was overruled by the Review petition.

The Delhi High Court highlighted that the Canon-I ruling had been reviewed by the Supreme Court in 'Commissioner of Customs v. Canon India Private Limited' (Canon-II). This Canon-II overruled Canon-I judgement.

The Canon-II decision conclusively established that officers of the Directorate of Revenue Intelligence (DRI), Commissionerates of Customs (Preventive), and other similarly situated officers are indeed proper officers for the purposes of Section 28 of the Customs Act, and are competent to issue show cause notices.

Master the Latest Amendments in Income Tax Act Click here

Citing this subsequent Supreme Court judgment, the High Court held that the DRI officials recognised as Proper Officers. Therefore, the bench noted that the writ petition challenging the DRI’s jurisdiction “would no longer survive.”

The Court directed that the show cause proceedings initiated against the petitioner shall now proceed in accordance with the law, as the jurisdictional challenge has been settled in favour of the Revenue. The writ petition filed by the Petitioner was disposed as dismissed.

Support our journalism by subscribing to Taxscanpremium. Follow us on Telegram for quick updates