2026-VIL-878-MAD-CU
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CUSTOMS High Court Cases

Customs - Adjudication Limitation - Scope of Expression "Where it is Possible to Do So" –Show Cause Notice issued under Section 28(4) of Customs Act, 1962 which mandated adjudication within one year from date of notice "where it is possible to do so". Petitioner contended that the expression does not confer power on adjudicating authority to keep assessment pending for unreasonable period and adjudication must be completed within one year or demonstrate that completion was impracticable – Whether the expression "where it is possible to do so" as it existed at time of issuance of Show Cause Notice permits adjudicating authority to keep proceedings indefinitely pending or whether it carries obligation to complete adjudication within stipulated period – HELD - The expression "where it is possible to do so" indicates that it is incumbent on officer concerned to demonstrate that it was not practicable to complete adjudication within stipulated period of one year from date of issuance of notice. The phrase "where it is possible to do so" means that adjudication is possible or practicable within one year. The expression cannot be understood as enabling or conferring power on adjudicating authority to keep assessment pending for an unreasonable period - Any attempt to construe the expression in such manner would defeat very purpose and object of prescribing limitation which is to extinguish stale demands and may render provision vulnerable to challenge on ground of being arbitrary thereby falling foul of Article 14 of Constitution. Even where no limitation is prescribed for taking any action including adjudication, it must be made within a reasonable time. Failure to complete adjudication within reasonable period would suffer from vice of arbitrariness thereby falling foul of Article 14 of Constitution – The expression "where it is possible to do so" mandates adjudication within one year from date of notice unless impracticability is demonstrated - The impugned order is set aside as barred by limitation – The petition stands disposed of - Customs - Adjudication Limitation - Applicability of Amendment to Section 28(9) via Finance Act 2018 to Proceedings Initiated Before Amendment – Petitioner contended that amendment should not apply to proceedings initiated before amendment and even if amendment applies, adjudication must be completed within two years from date of amendment – Whether amendment to Section 28(9) vide Finance Act 2018 applies to proceedings initiated prior to amendment and whether adjudication order passed beyond extended period of two years from date of amendment is sustainable – HELD - Limitation is part of procedural law and thus normally retrospective in nature with one condition superadded namely that an extended period of limitation would not revive dead claim. A claim which was time-barred before an amending Act with a larger period of limitation comes into force cannot be revived. When Show Cause Notice was issued on 05.08.2009, adjudication ought to be completed within one year i.e. by 05.08.2010 under expression "where it is possible to do so". The amendment to Section 28(9) was made after 9 years from date of notice which by itself is unreasonable to keep adjudication pending. By that time the claim had already become dead as it was barred under the law existing at time of notice. The amendment only enables adjudication to be made within period of two years from date of notice which if applied from date of amendment i.e. 29.03.2018 would expire by 29.03.2020. However impugned order is passed on 19.02.2024, almost four years thereafter. In any view the amended provision cannot rescue adjudication which had become barred by limitation under original provision – The amendment to Section 28(9) vide Finance Act 2018 does not apply to proceedings initiated prior to amendment as the claim had become dead before amendment came into force. Adjudication order passed on 19.02.2024 is barred by limitation - In any view, the delay of 14 years in adjudicating show cause notice is unreasonable, thereby suffers from the vice of arbitrariness and falls foul of Article 14 of the Constitution of India, thus unsustainable.
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