Saha Traders Vs Zonal Joint Director General of Foreign Trade(CLA) (Delhi High Court)
Delhi High Court ruled against the Directorate General of Foreign Trade (DGFT) for canceling Saha Traders’ Duty Entitlement Pass Book (DEPB) licenses 15 years after issuing a Show Cause Notice (SCN). The case stemmed from allegations that Saha Traders, in connection with M/s Ceean Commerce Pvt. Ltd., fraudulently obtained DEPB benefits for exports to Bangladesh. The SCN issued in 2005 accused the petitioner of criminal conspiracy under the Foreign Trade (Development & Regulation) Act, 1992. However, the court noted that despite multiple hearings and requests for supporting documents, no adjudication had taken place. In 2019, the DGFT canceled 38 DEPB licenses without providing the petitioner a fair hearing. The court found this action arbitrary and a gross violation of natural justice.
During the proceedings, the court highlighted that administrative inaction for decades could not justify penal actions against the petitioner. The DGFT failed to provide a valid explanation for the delay, and its cancellation order relied on conclusions from an unadjudicated SCN. Citing past judgments, the court emphasized that legal matters with financial or penal consequences cannot be kept unresolved indefinitely. It rejected the DGFT’s argument that alternative appellate remedies were available, affirming that judicial intervention was necessary in cases of procedural unfairness. Consequently, the court quashed the SCN, the 2019 cancellation order, and the related DEPB license cancellations, ensuring the petitioner’s rights remained protected. However, it clarified that actions taken by the Customs Department were beyond the scope of this ruling.
