Statutory Appellate Remedy Prevails Over Writ Petitions In Adjudicated Customs Delays: Delhi HC

The High Court of Delhi has slammed the door on direct writ intervention for customs delays where adjudication orders have already been passed, ruling that the existence of a statutory appellate mechanism overrides the extraordinary jurisdiction of constitutional courts. In a significant clarification of judicial discipline, the court held that litigants cannot bypass the prescribed hierarchy of the Customs Act, 1962 simply by citing prolonged provisional assessment periods once a final order is on record.

A division bench comprising Justice Anil Kshetarpal and Justice Amit Mahajan heard the challenge against the non-finalisation of nine Bills of Entry that remained provisional for over nine years. The court was tasked with deciding whether the matter should be deferred in light of pending Supreme Court proceedings on adjudication delays or if the petitioner should be relegated to the statutory appellate authority.

Key Takeaways

Appellate Dominance

Once an Order-in-Original is passed, the proper forum for challenge is the Commissioner (Appeals), not the High Court under writ jurisdiction.

Limited Scope of Deferment

Supreme Court directions to defer matters on 'delay in adjudication' do not apply to cases where the adjudication process has already reached a final decision.

Candour in Litigation

Petitioners must disclose all material developments, including the passage of any adjudication orders during the pendency of a writ, to avoid dismissal for non-disclosure.

Delay as a Ground for Appeal

Issues of procedural delay are not extinguished by the passing of an order but must be raised as grounds of appeal within the statutory framework.

Impact of Subsequent Adjudication Orders

The Petitioner initially sought a writ of mandamus for the release of bank guarantees and a writ of prohibition to stop the finalisation of assessments under Section 18 of the Customs Act, 1962. However, the bench noted that during the proceedings, Orders-in-Original were passed for all nine Bills of Entry. The Court observed that one such order had even been passed prior to the filing of the writ, a fact the petitioner failed to disclose.

The Court has the following directions:

"In view of the foregoing discussion, the present Writ Petition is dismissed as not maintainable in its present form, with liberty to the Petitioner to avail the statutory remedy of appeal under Section 128(1) of the Customs Act, 1962 against the Orders-in-Original dated 21.01.2022, 31.03.2026 and 15.06.2026, in accordance with law."

"The pendency of the present Writ Petition shall also be taken into consideration while examining any application for condonation of delay, if filed, without being influenced by any observation contained herein on the merits of the controversy."

The Court, in its reasoning, observed: "The principle that a writ court ordinarily does not entertain a petition where an efficacious statutory remedy is available is particularly relevant in the present circumstances. No exceptional circumstance has been demonstrated which would warrant this Court bypassing the statutory appellate mechanism."

Ratio

The existence of an efficacious statutory remedy under Section 128(1) of the Customs Act, 1962 precludes the exercise of discretionary writ jurisdiction under Article 226 of the Constitution of India, 1950 when provisional assessments have culminated in final Orders-in-Original. A generic allegation of delay in adjudication does not warrant a High Court to bypass statutory appellate channels or defer proceedings if the adjudication process has already concluded.

Background

The petitioner, M/s Kuku Overseas, had imported various electronic goods and Christmas lights from China between 2014 and 2015. The goods were cleared for home consumption following provisional assessment under Section 18 of the Customs Act, 1962 against bank guarantees. The petitioner contended that the Customs authorities failed to finalise these assessments for nearly a decade, citing the Customs (Finalization of Provisional Assessment) Regulations, 2018 and decisions like M/s Gupta Smelter Private Limited v. Union of India & Another to argue that powers must be exercised within a reasonable period.

The Respondents, however, brought to the court's attention that adjudication orders had been passed, including one in 2022 which was suppressed by the petitioner. The petitioner attempted to rely on Union of India & Ors. v. GMR Airport Infrastructure Ltd., where the Supreme Court directed the deferment of matters involving adjudication delays. The High Court distinguished this, stating that Union of India & Ors. v. GMR Airport Infrastructure Ltd. dealt with pending adjudications, whereas the present case involved completed orders. Furthermore, the court emphasized judicial discipline as highlighted in Union of India v. Kamlakshi Finance Corporation Ltd. ( "1991 (55) ELT 433 (SC)": 1991 CaseBase(SC) 394), noting that statutory remedies must be respected. The petition was ultimately dismissed, granting the petitioner liberty to approach the appellate authority.

Case Details:
Case No.: W.P.(C) 7322/2024
Case Title: M/S KUKU OVERSEAS v. COMMISSIONER OF CUSTOMS & ANR.
Appearances:
For the Petitioner(s): Mr. Akhil Krishan Maggu, Mr. Vikas Sareen, Ms. Oshin Maggu, Mr. Aryan Nagpal, Ms. Palak Sarna, Advs.
For the Respondent(s): Mr. Gibran Naushad, SSC with Mr. Suraj Shekhar Singh, Mr. Hasan Haider, Mr. Anish Mishra, Advs.

Source: 2026 CaseBase(DEL) 6659