Court Declines Writ Petition Challenging Show Cause Notice Issued by Assistant Commissioner, SIIB, Emphasizes Need for Statutory Adjudication on Factual Issues
In a significant judgment dated September 22, 2026, the Delhi High Court (Division Bench comprising Justices Avneesh Jhingan and Shail Jain) dismissed the writ petition filed by Mangali Impex Ltd. challenging the issuance of a show cause notice (SCN) by the Assistant Commissioner, Special Intelligence & Investigation Branch (SIIB), Customs. The Court held that the question of jurisdiction of the Assistant Commissioner to issue the SCN was no longer open for debate following the Supreme Court's authoritative ruling in Commissioner of Customs v. Canon India Pvt. Ltd., (2025) 4 SCC 509.
The petitioner, Mangali Impex Ltd., had exported consignments of calcium stearate which were later alleged by the customs authorities to be misclassified and overvalued. The customs department, acting through the Assistant Commissioner, SIIB, issued a show cause notice under Sections 28 and 124 of the Customs Act, 1962, questioning the valuation and entitlement to Duty Entitlement Pass Book (DEPB) credit. The petitioner contended that the SCN was issued without jurisdiction and that the matter had already been investigated by the Central Bureau of Investigation (CBI), which had submitted a closure report accepted by the special court.
The Court observed that the jurisdictional challenge to the issuance of the SCN was conclusively settled by the Supreme Court's decision in the Canon India case, where the Assistant Commissioner, SIIB, was held to be a proper officer under the Customs Act, 1962. Thus, the petitioner's objection on this ground did not survive.
The Court further noted that the issues raised in the SCN, including the true nature of the exported goods, valuation of goods, admissibility and extent of DEPB credit, genuineness of purchase transactions, timing of purchases, and the relationship with foreign buyers, were factual in nature and could not be adjudicated in writ proceedings. The acceptance of the CBI's closure report also did not preclude departmental proceedings, as the effect of the closure report vis-a-vis the show cause notice required evidence and factual determination.
Referring to the Supreme Court's ruling in Whirlpool Corporation v. Registrar of Trade Marks, (1998) 8 SCC 1, the Court reiterated that writ jurisdiction is generally not exercised when an effective alternative remedy exists unless fundamental rights are involved, principles of natural justice are violated, the proceedings are wholly without jurisdiction, or the constitutional validity of a statute is questioned. Since the jurisdictional issue stood conclusively decided against the petitioner, none of these exceptions applied.
The Court disposed of the writ petition but granted liberty to the petitioner to file a fresh response to the show cause notice within eight weeks. The customs authorities were directed to proceed further in accordance with law after affording the petitioner an opportunity of hearing. The petitioner was also free to avail of statutory remedies against any adverse decision.
This judgment underscores the judiciary's reluctance to interfere in pre-adjudication notices issued by customs authorities where factual investigations are pending, and reaffirms the scope of departmental proceedings in customs matters.
Bottom Line:
Customs - Writ petition challenging show cause notice at pre-adjudication stage - Once Supreme Court settled that Assistant Commissioner, SIIB is proper officer to issue show cause notice, challenge on jurisdictional ground does not survive - Disputed factual issues regarding export goods, valuation, DEPB credit and effect of acceptance of CBI closure report cannot be examined in writ jurisdiction - Petitioner relegated to reply to show cause notice and pursue statutory remedies.
Statutory provision(s): Customs Act, 1962 Sections 2(34), 28, 124; Indian Penal Code Sections 120B, 420; Prevention of Corruption Act Sections 13(1)(d), 13(2); Code of Criminal Procedure Section 167(2)
Mangali Impex Ltd v. Union of India, (Delhi)(DB) : Law Finder Doc Id # 2990710
