The Supreme Court on Thursday (November 7) ruled that officers from the Directorate of Revenue Intelligence (DRI) have the authority to issue show-cause notices and collect duties under the Customs Act, 1962.
This ruling confirms that DRI officers qualify as “proper officers” under Section 28 of the Customs Act, enabling them to perform these functions. This decision is expected to allow the government to proceed with a significant number of pending tax recovery cases, collectively valued at over Rs 20,000 crore, which had previously been on hold due to legal disputes.
A bench led by Chief Justice DY Chandrachud, with Justices JB Pardiwala and Manoj Misra, made this ruling in response to a review petition filed by the Customs Department. This petition challenged a previous judgment in *Canon India Private Ltd. v. Commissioner of Customs*, which had held that DRI officers were not authorised to issue show-cause notices under the Customs Act.
Companies facing DRI notices
The companies facing DRI notices include Vedanta, Vodafone Idea, Adani Enterprises, TVS Motor Company, Samsung India, Godrej and Boyce Manufacturing, BSNL, Daikin, Sony India, Canon, Nikon India, Sennheiser and Yakult Danone. The DRI had issued notices to the firms seeking recovery of customs duties.
The court offered guidance on managing ongoing legal challenges to show-cause notices issued by DRI officers. For cases currently before High Courts, the Supreme Court instructed that High Courts should adjudicate these in alignment with this ruling. In cases where appeals are pending at the Supreme Court, they should similarly follow the new guidelines.
Case background
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The Supreme Court’s 2021 ruling in Canon India found that, in the absence of explicit assignment of duties by the Central Government, DRI officers lacked the authority to issue show-cause notices under the Act. The current ruling overturns this interpretation, now recognising DRI officers as authorised personnel under the Customs Act’s Section 28.
This decision by the Supreme Court reinstates DRI’s position as a key enforcement body in customs-related matters, enabling it to resume pending cases that had been paused due to jurisdictional debates.
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