M/s Kuku Overseas vs Commissioner Of Customs & Anr.

ANIL KSHETARPAL, J.:

The present Writ Petition has been filed by the Petitioner, M/s Kuku Overseas, invoking the jurisdiction of this Court under Articles 226 and 227 of the Constitution of India. The Petitioner initially approached this Court complaining of prolonged non-finalisation of nine Bills of Entry which, according to the Petitioner, had remained provisionally assessed under Section 18 of the Customs Act, 1962 [the ‘Act’] for several years. The principal grievance of the Petitioner was that, despite the passage of more than nine years, the provisional assessments had not been finalised and the bank guarantees furnished by the Petitioner in connection therewith continued to remain outstanding.

The Petitioner, accordingly, seeks the following reliefs:-

The controversy, however, has undergone a material change during the pendency of the present proceedings. An Order-in-Original dated 21.01.2022 had already been passed in respect of one of the Bills of Entry, namely, Bill of Entry No. 7101786 dated 17.10.2014. Further, during the pendency of the present Writ Petition, two separate Orders-in-Original dated 31.03.2026 and 15.06.2026 have also been passed in respect of the remaining Bills of Entry.

Thus, the very premise on which the Petitioner approached this Court, namely, that the assessments continued to remain pending without adjudication, no longer survives in the same form. More importantly, the Order-in-Original dated 21.01.2022, which had already been passed prior to the institution of the present Writ Petition, was not disclosed by the Petitioner in the Writ Petition.

In these circumstances, the principal question before this Court is whether the present Writ Petition ought to be kept pending in view of the order dated 02.05.2025 passed by the Supreme Court in Petition for Special Leave to Appeal (C) No. 5392/2025, titled Union of India & Ors. v. GMR Airport Infrastructure Ltd., or whether, in view of the subsequent adjudication orders and the availability of an efficacious statutory appellate remedy, the Petitioner ought to be relegated to such remedy.

The Petitioner was engaged in the business of import of goods. During the relevant period, the Petitioner imported, inter alia, Christmas lights, sunlight bulbs, rope lights, LED rope lights, LED strips and assorted iron buckles from China.

In respect of the imported goods, the Petitioner filed nine Bills of Entry under Section 46 of the Act. The particulars of the Bills of Entry are as follows:

According to the Petitioner, the goods were examined by the Customs authorities and the assessments were made provisionally under Section 18(1) of the Act. The Petitioner furnished personal bonds as well as bank guarantees as security in connection with the provisional assessments, whereupon the goods were cleared for home consumption.

The total value of the bank guarantees furnished by the Petitioner is stated to be Rs.19,19,400/-.

The Petitioner claims that despite the passage of several years, the provisional assessments were not finalised and the bank guarantees continued to remain outstanding. The Petitioner asserts that it repeatedly approached the Customs authorities seeking information regarding the status of the assessments and release of the bank guarantees.

The Petitioner submitted an RTI application dated 19.07.2022 seeking information regarding the status of the bank guarantees. As no response was received, the Petitioner preferred an appeal dated 30.08.2022 before the first appellate authority under the Right to Information Act, 2005. The Petitioner thereafter received a response stating, inter alia, that the matter relating to the bank guarantees was pending as the Bills of Entry were provisional. The Petitioner thereafter addressed a communication dated 14.05.2024 to the Customs authorities seeking, inter alia, release of the bank guarantees and issuance of the requisite No Objection Certificate.

The present Writ Petition was thereafter instituted in the year 2024.

It is, however, material to notice that an Order-in-Original dated 21.01.2022 had already been passed by the Joint Commissioner of Customs (Adjudication) in respect of Bill of Entry No. 7101786 dated 17.10.2014.

By the said Order-in-Original, the adjudicating authority ordered absolute confiscation of the goods imported under Bill of Entry No. 7101786 dated 17.10.2014 under Sections 111(d) and 111(m) of the Act. Penalties were also imposed upon the concerned persons under Section 112(b)(i) and Section 114AA of the Act.

The operative portion of the Order-in-Original dated 21.01.2022 reads as under:

Thus, when the present Writ Petition was instituted, an adjudication order had already been passed in respect of at least one of the Bills of Entry forming the subject matter of the present proceedings. The aforesaid fact, however, was not disclosed in the Writ Petition.

Thereafter, during the pendency of the present Writ Petition, two further Orders-in-Original dated 31.03.2026 and 15.06.2026 came to be passed by the Additional Commissioner of Customs in respect of the remaining Bills of Entry.

Consequently, the factual position as it obtains today is materially different from the position projected in the Writ Petition at the time of its institution. The assessments which were alleged to have remained pending for several years have since culminated in adjudication orders.

In view of the aforesaid submissions, the following questions arise for consideration:

This Court has considered the submissions advanced on behalf of the parties and carefully perused the record.

The principal submission advanced on behalf of the Petitioner is that the present Writ Petition ought to be kept pending in view of the order dated 02.05.2025 passed by the Supreme Court in Union of India & Ors. v. GMR Airport Infrastructure Ltd.

It would, therefore, be apposite to notice the relevant portion of the said order. The Supreme Court, while considering the petition for special leave against the judgment of this Court, recorded that the High Court had disposed of hundreds of petitions on the subject in question and that several matters had come up before the Supreme Court. The Supreme Court observed that, since the larger issues were being examined, if any matter came up before the Tribunal or any High Court on the subject in question, the hearing of such matter may be deferred until the Supreme Court took an appropriate call.

The aforesaid direction has to be understood in the context in which it was made. The Supreme Court was considering the challenge to the judgment of this Court on the issue of delay in adjudication and was seized of a large number of connected matters arising from that controversy. The order was passed in that backdrop and cannot be construed as a direction that every proceeding before every High Court or Tribunal in which an allegation of delay had at any earlier stage been raised must necessarily be kept pending irrespective of the subsequent developments in that proceeding.

In the present case, there is a fundamental factual distinction.

The grievance projected in the Writ Petition was that the provisional assessments of the nine Bills of Entry had not been finalised. The Petitioner sought, on that basis, a direction for release of the bank guarantees and a prohibition against the Customs authorities from initiating proceedings for finalisation of the provisional assessments.

However, the adjudication proceedings have since culminated in Orders-in-Original.

Even prior to the filing of the present Writ Petition, an Order-in-Original dated 21.01.2022 had been passed in respect of Bill of Entry No. 7101786 dated 17.10.2014. The Petitioner did not disclose the said order while instituting the present proceedings.

The non-disclosure assumes significance because the central grievance of the Petitioner in the Writ Petition was that the assessment relating to the aforesaid Bill of Entry continued to remain pending without adjudication. Once an adjudication order had already been passed, that factual assertion was no longer correct insofar as the said Bill of Entry was concerned.

This Court is conscious that the relief sought by the Petitioner also relates to the bank guarantees. However, the question whether the Petitioner is entitled to consequential relief in respect of the security furnished in connection with the import transactions has to be considered in the context of the adjudication orders which now govern the rights and liabilities of the parties.

The position has been further altered by the passing of two additional Orders-in-Original dated 31.03.2026 and 15.06.2026 during the pendency of the present Writ Petition. Thus, the remaining Bills of Entry have also been subjected to adjudication.

The present proceedings, therefore, cannot now be examined as though the provisional assessments continue to remain at the stage at which they stood when the Petitioner approached this Court.

Once an adjudication order has been passed, the Act itself provides a statutory appellate mechanism. Section 128(1) of the Act provides for an appeal to the Commissioner (Appeals) against, inter alia, a decision or order passed by an officer of Customs lower in rank than a Commissioner of Customs.

The availability of such statutory remedy assumes particular significance in the facts of the present case. The adjudication orders are not merely formal orders recording finalisation of the provisional assessments. In the case of Bill of Entry No. 7101786, the adjudicating authority has ordered absolute confiscation of the imported goods under Sections 111(d) and 111(m) of the Act and has also imposed penalties under Sections 112(b)(i) and 114AA of the Act.

Consequently, the controversy now involves the legality and validity of adjudicatory determinations made by the competent Customs authorities. Such determinations are ordinarily required to be examined in the first instance by the statutory appellate authority constituted under the Act.

The Court is also of the view that the question of delay, which constitutes the principal grievance of the Petitioner, is not rendered incapable of examination merely because the adjudication orders have now been passed. The Petitioner would be entitled to urge, before the competent appellate forum, such grounds as may be available to it in law, including the effect, if any, of the delay in the proceedings leading to the adjudication orders.

The statutory appellate forum would also be competent to examine the consequential issues arising from the adjudication orders in accordance with law.

It would, therefore, not be appropriate for this Court to retain the present Writ Petition merely because the Supreme Court is examining the larger issue concerning delay in adjudication in Union of India & Ors. v. GMR Airport Infrastructure Ltd.

The controversy before the Supreme Court in the said proceedings and the controversy which now survives in the present Writ Petition are not identical.

In Union of India & Ors. v. GMR Airport Infrastructure Ltd., the Supreme Court was considering the challenge to the judgment of this Court dealing with the effect of substantial delay in adjudication proceedings and, in that context, directed that matters on the subject be deferred. The present case, however, has travelled considerably beyond the stage of mere pendency of adjudication. In the present case, adjudication orders have already been passed, including one order which had been passed even before the institution of the Writ Petition.

The distinction is material. The issue before this Court is not whether an adjudicating authority should now be directed to adjudicate proceedings which have remained pending for an inordinate period. Rather, the adjudication orders have already been made and the statutory appellate remedy against those orders is available to the Petitioner.

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.

It is equally relevant that the Petitioner seeks, by way of a writ of prohibition, to restrain the Customs authorities from initiating or completing the finalisation/adjudication process. That prayer has substantially become infructuous in view of the Orders-in-Original which have already been passed.

The relief of mandamus seeking release of the bank guarantees cannot be considered in isolation from the subsequent adjudication orders. The rights and liabilities of the parties have now to be examined in the light of those orders. It would not be appropriate for this Court, in exercise of its writ jurisdiction, to adjudicate upon the consequential relief without first permitting the statutory appellate forum to examine the legality and correctness of the adjudication orders.

There is another aspect which weighs with this Court.

The Petitioner approached this Court complaining that the Customs authorities had failed to finalise the provisional assessments for more than nine years. However, as noticed above, an Order-in-Original dated 21.01.2022 had already been passed in respect of Bill of Entry No. 7101786 dated 17.10.2014. The said order was not disclosed in the Writ Petition.

A party invoking the extraordinary jurisdiction of this Court under Article 226 of the Constitution is expected to make a full and candid disclosure of all material facts having a bearing on the relief sought. Where the very factual premise on which the writ jurisdiction is invoked has undergone a material change, such change must be brought to the notice of the Court.

In the present case, the non-disclosure of the Order-in-Original dated 21.01.2022 is material because the Petitioner sought a writ of prohibition against finalisation of the provisional assessment relating to the very Bill of Entry in respect of which the adjudication order had already been passed.

This Court is, therefore, not inclined to exercise its discretionary writ jurisdiction for the purpose of examining a grievance on the basis of a factual position which was not complete even at the time of institution of the proceedings and which has, in any event, subsequently undergone further material changes.

This Court has not examined, and expresses no opinion on, the merits of the Orders-in-Original dated 21.01.2022, 31.03.2026 and 15.06.2026. Likewise, no opinion is being expressed on the question whether the delay preceding the passing of the aforesaid orders has any legal consequence.

These questions are expressly left open to be urged by the Petitioner before the competent statutory appellate forum in accordance with law.

The Petitioner would also be at liberty to raise, before the appellate authority, all permissible contentions regarding the period during which the provisional assessments remained pending, the applicability and effect of the relevant statutory provisions, rules, regulations or administrative instructions, and the consequences, if any, of the delay in adjudication.

The fact that the present Writ Petition has been pending before this Court shall not preclude the Petitioner from availing the statutory remedy. The competent appellate authority shall consider any application for condonation of delay in filing the appeal, if such application is made, in accordance with law and on its own merits. Nothing stated in the present judgment shall be construed as an expression of opinion on such application or on the merits of the appeals.

For the aforesaid reasons, this Court is of the considered view that no useful purpose would be served by keeping the present Writ Petition pending merely to await the outcome of the proceedings before the Supreme Court in Union of India & Ors. v. GMR Airport Infrastructure Ltd. The factual and procedural position in the present case is materially different, particularly in view of the adjudication orders which have already been passed.

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.

It is clarified that this Court has not expressed any opinion on the merits of the aforesaid Orders-in-Original or on the Petitioner's contentions concerning the delay in finalisation/adjudication. All such contentions are left open to be urged before the Competent Appellate Authority.

If the Petitioner avails the statutory remedy, the Appellate Authority shall consider the same 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 Writ Petition, along with all pending applications, is disposed of in the aforesaid terms.