Legal principle

A writ court will not interfere at the stage of a show cause notice, particularly where the notice under Section 28AAA is merely consequential to an adjudication order that still holds the field, leaving the notice holder to contest the adjudication and challenge the underlying order before the appropriate forum.

Court decision

The Gujarat High Court dismissed the petition in limine as premature, holding that the impugned show cause notice was in the nature of a consequential recovery proceeding to the DGFT's order-in-original, which still held the field; the respondents were left free to adjudicate the notice, and the Court expressly did not go into the merits. The decision was in favour of the respondents (Union of India).

Facts

M/s Adani Gangavaram Port Limited, which provides port and cargo handling services to foreign companies, was issued scrips under the Service Exports from India Scheme (SEIS). Relying on Circular No. 6 of 2018 dated 22.05.2018, the DGFT initiated proceedings to cancel the scrips, and the DRI investigated, recording the petitioner's statements under Section 108 of the Customs Act, 1962. During the investigation, the DGFT passed an order-in-original dated 16.04.2024 cancelling scrips worth Rs.1,81,24,518/- and imposing a penalty of Rs.50,00,000/-, which the petitioner stated it was in the process of challenging. Thereafter, the customs authorities issued a show cause notice dated 21.06.2024 under Section 28AAA of the Customs Act, 1962 for recovery of duty and interest, with penalty under Section 114AB, and the petitioner deposited an amount equal to the duty forgone upon the DRI's insistence.

Key provisions

• Section 28AAA, Customs Act, 1962 — Recovery of duties in certain cases
• Section 108, Customs Act, 1962 — Power to summon persons to give evidence and produce documents