'Prolonged Inaction' Cannot Be Rewarded: Delhi High Court Upholds CESTAT Refusal To Condone 968-Day Delay In Filing Customs Appeal

"The explanation offered is, therefore, not merely required to account for the time taken in obtaining the copy of the order after February 2024, it must also satisfactorily explain the prolonged period of complete inaction preceding the appellants' alleged first knowledge of the order." Delhi High Court, in a significant ruling, held that a litigant cannot claim the benefit of limitation by feigning ignorance of an adjudication order when they have shown gross negligence and prolonged inaction for nearly three years following the conclusion of proceedings.

A division bench comprising Justice Anil Kshetarpal and Justice Shail Jain observed that the subsequent receipt of an order cannot retrospectively cure years of deliberate or negligent silence by a party fully aware of the ongoing customs proceedings.

The proceedings emanated from a show cause notice issued on December 22, 2020, to M/s Radhey Shyam Rishipal Factory, its partner Deepak Kumar, and Radhey Shyam concerning certain imports. Although represented by counsel during initial hearings, the appellants failed to file a written defence, culminating in an Order-in-Original dated December 7, 2021, which re-determined import values and imposed differential duty and penalties. The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) dismissed their belated appeals and applications seeking condonation of a 968-day delay, prompting the present customs appeals under Section 130 of the Customs Act, 1962.

The primary question before the court was whether the refusal by the CESTAT to condone the 968-day delay suffered from any perversity or error of law giving rise to a substantial question of law under Section 130 of the Customs Act. The court was also called upon to determine whether service of an adjudication order upon the erstwhile counsel via electronic mail constitutes valid communication when the litigant claims absolute lack of personal knowledge.

Jurisdiction Under Section 130

The court opened its doctrinal analysis by reiterating the limited scope of appellate interference under Section 130 of the Customs Act, 1962. The bench emphasized that the jurisdiction is strictly confined to determining whether the case involves a "substantial question of law" as expounded in Santosh Hazari v. Purushottam Tiwari.

"The jurisdiction so conferred is distinct from ordinary appellate jurisdiction and does not ordinarily permit reappreciation of findings of fact recorded by the Tribunal merely because another view may also be possible."

Test Of "Sufficient Cause"

Analyzing the statutory mandate under Section 129A(5) of the Customs Act, the court noted that while the expression "sufficient cause" must receive a liberal and justice-oriented construction, it does not dispense with the essential requirements of bona fides and due diligence. Citing the Supreme Court's dictum in Basawaraj v. Special Land Acquisition Officer, the bench reiterated that the law of limitation must be applied with all its rigour when prescribed by statute.

"The court has no power to extend the period of limitation on equitable grounds. A result flowing from a statutory provision is never an evil."

Absence Of Enquiry For Three Years

The bench closely scrutinized the conduct of the appellants, observing that they were admittedly aware of the adjudication proceedings and had engaged counsel throughout. The court pointed out that the appellants offered no explanation for their complete failure to make any enquiries regarding the outcome of the proceedings between December 2021 and February 2024.

"Even assuming, for the sake of consideration, that the appellants themselves did not receive the Order-in-Original in December 2021, the fact remains that the adjudication proceedings had concluded and the appellants had been represented through counsel throughout the material period."

Conduct Of Counsel And Withholding Of Facts

Addressing the appellants' contention that they should not suffer due to the failure of their erstwhile counsel, the court distinguished the ruling in Rafiq v. Munshilal. The bench noted that the same counsel who received the order via email in December 2021 subsequently instituted the appeals before CESTAT and withheld disclosure of the email communication in the initial delay condonation applications.

"When the order dated 07.12.2021 was sent to the learned counsel by the Principal Commissioner by e-mails on 15.12.2021 and 22.12.2021, the least that should have been stated in the applications is about the receipt of this order by e-mail, but this fact was withheld."

The court concluded that the CESTAT had rightly evaluated the cumulative effect of the Department's electronic dispatch, the display of the order on the notice board, the appellants' failure to notify any change of address, and their prolonged inaction. Finding no perversity or legal error in the Tribunal's exercise of discretion, the High Court affirmed the impugned order.

"The subsequent receipt of the Order-in-Original on 02.07.2024 and the steps taken thereafter do not satisfactorily explain the prolonged period of inaction preceding such receipt."

Finding no substantial question of law warranting interference under Section 130 of the Customs Act, 1962, the Delhi High Court dismissed the batch of customs appeals along with all pending interlocutory applications.

Date of Decision: 18 August 2026