Nishka Srinivas Veluvali
Published On: February 08, 2022 at 18:53 IST
The Union Budget 2022 broadens the definition of the term “Proper Officer” in the Section 2(34) of the Customs Act, 1962 to permit the work of the functions to an Officer of Customs by Central Board Indirect Taxes and Customs (CBIC) or the Principal Commissioner of Customs according to the newly inserted sub – section (1A) and (1B) of the Section 5 of the Act.
Clause 96 of the Budget “retrospectively” authenticates the action taken by the Officer of the Directorate of Revenue Intelligence (DRI) or Customs prior to the Enactment of the Financial Bill 2020, despite of the Orders of the Courts, Tribunals or Authorities.
It further on clarifies that any of the proceeding cropping up out of action taken as per the Clause and is pending on the date of the commencement of the Finance Act, will be Quashed as per the Amended provisions.
This “Retrospective” Amendment has an overruling effect on the Judgement of pending Show Cause notices (SCNs)/ Petitions/ Appeals where the Jurisdiction of the DRI Officer is been questioned.
The statements detailing about the Amendment reads as, “This Amendment has been necessitated to correct the infirmity observed by the Courts in recent Judgments that the Act required explicit provision conferring powers for assignment of function to Officers of Customs as “proper officers” for the purposes of the Act, besides the definition Clause (34) in Section 2 of the Act”.
The Supreme Court in the Canon India Case had ruled that the DRI is not a “Proper Officer” to commence the Investigation and to issue any Show Cause notices (SCN) to demand Custom duty as per the Section 28 of the Customs Act, 1962. The same Judgement was repeated in the Agarwal Mehta Case in August 2021.
The High Court’s as well as the Tribunals are following this Order set forth by the Supreme Court.
This Amendment might be the bad news for the parties that were relying on the aforementioned Judgement of the Supreme Court to defend their request or demands.