Union of India & Ors. Vs GMR Airport Infrastructure Ltd. (Supreme Court of India)
Background and Delhi High Court Proceedings
The Delhi High Court considered a batch of writ petitions challenging show-cause notices and pending adjudication proceedings under the Customs Act, 1962, the Finance Act, 1994 and the Central Goods and Services Tax Act, 2017. In some matters, orders-in-original passed after adjudication were also challenged. The principal grievance was that adjudication had remained pending for extraordinarily long periods, in some cases for decades, and that such delay violated the requirement that statutory adjudicatory proceedings be concluded within a reasonable time.
The Court examined the statutory schemes governing adjudication. In particular, Section 28(9) of the Customs Act prescribed periods for determination of duty or interest, while its Second Proviso contemplated that proceedings would be deemed concluded if determination was not made even within the permissible extended period. Section 28(9A), however, recognised specified circumstances in which the statutory period could not operate in the ordinary manner, including pendency of similar litigation, judicial stay, specific Board directions to keep proceedings pending and proceedings before the Settlement Commission.
The Court also examined the historical controversy concerning the authority of DRI and other officers to issue notices under Section 28. Sayed Ali and Canon India had questioned such jurisdiction, while subsequent legislative amendments and the Supreme Court’s review decision in Commissioner of Customs v. Canon India (P.) Ltd. (Canon II) altered the legal position. In Canon II, the Supreme Court held that DRI and similarly situated officers were proper officers competent to issue Section 28 notices, set aside Mangali Impex, and upheld Section 97 of the Finance Act, 2022. The Supreme Court expressly left the limitation aspect of Canon I undisturbed.
The Delhi High Court further considered the Revenue’s practice of placing unresolved adjudication matters in the “call book”. Board instructions contemplated specified circumstances for such transfer, periodic review and communication to the affected noticee. The Court found that the Revenue had not established compliance with those requirements.
High Court’s Reasoning and Ruling
The High Court held that statutory authorities are obliged to endeavour to conclude adjudication with due expedition. Proceedings capable of imposing financial liabilities or penal consequences cannot be kept pending for years or decades merely because the statute uses the expression “where it is possible to do so.” That expression gives flexibility where genuine impediments exist; it does not authorise indefinite administrative delay. The authority challenging such proceedings would have to establish that it was genuinely prevented from proceeding by circumstances beyond its control.
On the facts before it, the Court found that the Revenue had failed to demonstrate such an insurmountable constraint. Repeated placement of matters in and retrieval from the call book, absence of adequate periodic review and failure to comply with the Board’s own procedural directions demonstrated, in the Court’s view, that the adjudications had not been concluded within a reasonable time. The Court also observed that repeated adjournments or non-cooperation by assessees did not necessarily justify indefinite pendency, since the authorities could proceed in accordance with law.
Accordingly, the Delhi High Court allowed the writ petitions and quashed the impugned show-cause notices and the final orders challenged in the batch.
Supreme Court Challenge in Union of India & Ors. Vs GMR Airport Infrastructure Ltd.
The Union of India challenged the High Court judgment before the Supreme Court. The Supreme Court noted that the Delhi High Court’s judgment had disposed of hundreds of petitions and that approximately 250 matters had subsequently been disposed of by the Tribunal following the High Court’s decision. The Revenue sought interim relief against operation of the High Court judgment, contending that its continued operation was creating difficulties for the Revenue.
The Supreme Court, however, did not finally determine the underlying controversy in the extracted order. It observed that it was considering the larger issues involved and directed that, if matters concerning the same subject came before the Tribunal or any High Court, their hearing may be deferred until the Supreme Court took an appropriate decision. It directed that the matter be listed after the Summer Vacation.
Effect on the High Court Judgment
Thus, the extracted Supreme Court order records the challenge to the Delhi High Court’s judgment and indicates that the Supreme Court was examining the larger issues, but it does not itself contain a final adjudication reversing, affirming or modifying the High Court’s substantive ruling on unreasonable delay. The immediate direction was procedural: other connected Special Leave Petitions were to be brought before the Supreme Court, and proceedings before the Tribunal or High Courts concerning the subject could be deferred pending an appropriate decision by the Supreme Court.
The Delhi High Court’s judgment therefore remains the substantive decision reflected in the supplied material, while the Supreme Court order represents the subsequent challenge and interim procedural directions rather than a final determination of the merits.
Read Delhi HC order in this case: Adjudication proceedings cannot be kept pending for years: Delhi HC
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
1. This matter has come up today for hearing the parties on interim relief.
2. Notice in the main matter had already been issued on 7-3-2025.
3. We take notice of the fact that the High Court by way of its impugned judgment and order disposed of hundreds of petitions.
4. One of the matters has come up before us.
5. It is difficult to hear the Revenue on interim relief in the absence of other assesses before us.
6. We request Mr. N. Venkataraman, the learned Additional Solicitor General to see that the other Special Leave Petitions also come up before us at the earliest so that we can issue notice in all the matters.
7. According to Mr. N. Venkataraman, the impugned judgment and order passed by the High Court of Delhi needs to be suspended from its operation as the same is creating lot of problems for the Revenue.
8. He pointed out that almost 250 matters came to be disposed of by the Tribunal following the judgment of the High Court of Delhi.
9. Since we are looking into the larger issues involved in this matter, we may only say that if any matter comes up for hearing before the Tribunal or any of the High Courts on the subject in question, the hearing may be deferred till we take an appropriate call in the matter.
10. List the matter after Summer Vacation.
