Quick answer: In GKEM International Pvt Ltd & Ors. v. Commissioner of Customs ICD PPG and Others, decided on 7 September 2026, a Division Bench of the Delhi High Court — Anil Kshetarpal and Shail Jain, JJ. — upheld an Order-in-Original confirming a differential customs duty demand of over Rs. 20.18 crore against an importer under Advance Authorisation licences, rejecting the argument that the demand was time-barred under Section 28(9) of the Customs Act, 1962. The Court held that the pendency of the petitioners’ own writ petition, and the interim order restraining coercive recovery operating in it, fell squarely within the circumstance in Section 28(9A)(b) that suspends the adjudication clock — so the one-year period ran not from the date of the show cause notice but from the date that writ petition was dismissed. The administrative transfer of the notice to the department’s “Call Book” was, the Court held, the record of that statutory circumstance, not its source, and did not by itself require separate departmental communication to have legal effect once the assessee had itself invoked the circumstance. The Court also distinguished a contrary line of authority under a Supreme Court stay order and, independently, invoked the doctrine of approbation and reprobation to decline discretionary writ relief.
Key Takeaways
- A Section 28(9A) exclusion does not depend on the department’s Call Book paperwork; it depends on whether the statutory circumstance actually existed. The Court held that transferring a show cause notice to the Call Book is an administrative act that records a Section 28(9A) circumstance — here, the pendency of the assessee’s own writ petition and an operative interim stay — but is not itself the source of the limitation exclusion. Even non-compliance with the departmental circular governing Call Book intimation did not defeat the exclusion once the underlying statutory circumstance was established.
- An assessee who invokes a circumstance to defer adjudication cannot later be heard to say the department failed to communicate that same circumstance. Section 28(9A) ordinarily requires the proper officer to inform the noticee of the reason for non-determination. The Court found this purpose fully served where the petitioners themselves had raised the pendency of their writ petition as the ground for deferment — the object of the communication requirement was met by the noticee’s own conduct, even absent a formal departmental letter.
- The recomputed clock, not the original one, decided the case. Once the Court held that the circumstance in Section 28(9A)(b) applied, the one-year period under Section 28(9)(b) was reckoned afresh from the date the writ petition was dismissed — not from the date of the show cause notice. On that computation, the Order-in-Original fell within time, making it unnecessary to decide whether the earlier eight-month extension under the first proviso survived onto the freshly reckoned period.
- A precedent decided under the pre-2018 version of Section 28(9) does not transfer to a post-2018 notice merely because both involve delayed adjudication. The Court distinguished its own earlier ruling in Vos Technologies, which addressed notices predating the Finance Act, 2018 and its insertion of Section 28(9A), holding that a Supreme Court order deferring proceedings that rely on Vos Technologies did not require deferment here because the statutory framework governing this notice was materially different.
- The judgment turns on limitation and department procedure alone — it says nothing about the merits of the underlying Advance Authorisation dispute. The petitioners chose not to contest, at any stage, the finding that duty-free imported raw material had been diverted to the domestic market in breach of the “actual user” condition. That finding, and the correctness of the duty demand itself, remain open for the statutory appeal the Court left the petitioners free to pursue.
1. Introduction
Limitation provisions in fiscal statutes rarely announce themselves as significant, but they decide an outsized share of contested demands, because a taxpayer who cannot dispute the underlying liability will often argue that the demand arrived, or was confirmed, too late to be valid. Section 28 of the Customs Act, 1962 illustrates the structure well: it fixes a period within which the proper officer must adjudicate a show cause notice, but it also builds in an exception — Section 28(9A) — for circumstances genuinely outside the department’s control, such as a pending appeal or an operative court stay. GKEM International Pvt Ltd & Ors. v. Commissioner of Customs ICD PPG and Others, decided by the Delhi High Court on 7 September 2026, is a case about exactly that exception, and about who bears the consequence when the very litigation an assessee brings against a related decision ends up suspending the limitation clock running against it.
The case arose from a customs duty demand of over Rs. 20.18 crore against an importer that had availed duty-free import benefits under the Advance Authorisation Scheme and was found, on investigation, to have diverted the imported material into the domestic market without discharging its export obligation. The petitioners did not contest that finding. Their sole challenge was that the Order-in-Original confirming the demand was passed after the statutory period under Section 28(9) had expired, and was accordingly without jurisdiction. Answering it required the Court to work through the interaction between Section 28(9), Section 28(9A), and the department’s internal “Call Book” practice — and to decide whether a Supreme Court order staying reliance on an earlier Delhi High Court ruling required it to defer the present proceedings. This article sets out the facts, the Court’s reasoning on each issue it decided, and what the judgment means for taxpayers and advocates handling delayed adjudications under the Customs Act and, by the judgment’s own cross-reference, the Central Goods and Services Tax Act, 2017.
2. Case summary and background
The petitioners were engaged in importing duty-free Electrolytic Copper Rods and exporting Copper Wire and Power Cables manufactured from them after value addition. To do so, they availed duty-free import benefits under Advance Authorisation Licences (AAL) issued by the Director General of Foreign Trade under Notification No. 18/2015-Cus dated 1 April 2015. Petitioner No. 2 held four such licences issued between 16 December 2019 and 3 June 2020; Petitioner No. 1 held five, issued between 12 March 2020 and 19 August 2020. Under the terms of the AAL, raw material had to be imported within one year of the licence, and the finished goods manufactured from it exported within eighteen months of import; the importers had also executed bonds undertaking to fulfil this Export Obligation (EO) and to furnish proof within thirty days of the expiry of the Export Obligation Period (EOP).
An investigation by the Customs Preventive Commissionerate, Delhi found that the petitioners had instead diverted the duty-free imported raw material into the domestic market, disguised as job work, without fulfilling the EO — in breach of the “actual user” condition attached to the licences under Notification 18/2015-Cus. The purported job-work firms, the investigation found, existed only on paper, and statements recorded under Section 108 of the Customs Act admitted that the imported material had not in fact been used to manufacture export goods.
Before the show cause notice at issue was even issued, the petitioners had twice approached the Delhi High Court on related grievances against the Director General of Foreign Trade. The first writ petition, filed in 2021, sought permission to make good the shortfall in raw material by purchasing copper on the open market and an extension of the licence period; it was dismissed as withdrawn on 23 March 2021, with liberty to make a representation to the DGFT. The second, W.P.(C) 5756/2021, sought an extension of the Export Obligation Period on account of the COVID-19 pandemic, together with a restraint on coercive recovery during the extended period. The Court’s interim order of 3 June 2021 directed that the DGFT take no coercive action against the petitioners pending a final decision; the DGFT rejected the underlying representations on 23 June 2021, and the writ petition itself was eventually dismissed on 8 December 2023, the Court finding the DGFT’s decision-making process fair.
The show cause notice under challenge was issued on 24 June 2022, under Section 28(4) read with Section 28AAA of the Customs Act, calling on the petitioners to show cause why a cumulative differential customs duty of approximately Rs. 20.18 crore — Rs. 11,11,45,550 against Petitioner No. 1 and Rs. 9,06,17,303 against Petitioner No. 2 — should not be recovered with interest under the bonds executed by them. On 12 July 2023 the petitioners were informed of an eight-month extension of the adjudication period granted under the first proviso to Section 28(9). At a hearing in mid-August 2023, the petitioners sought deferment of the proceedings on account of the pendency of W.P.(C) 5756/2021 and its operative interim order; the show cause notice was accordingly transferred to the department’s Call Book on 18 August 2023 under Section 28(9A)(b). After that writ petition was dismissed on 8 December 2023, the adjudication proceedings resumed, culminating in the Order-in-Original of 29 November 2024, which confirmed the demand along with interest, redemption fine and penalty under Sections 28(4), 28AA and 28AAA. The petitioners’ representations of 11 February 2025 seeking recall of that order — on the ground that the notice had become non-est and the adjudication was time-barred — were unsuccessful, and they approached the High Court by way of the writ petition decided in this judgment.
Significantly, at no stage — not in their reply to the show cause notice, not in their representations seeking recall, and not before the High Court — did the petitioners dispute the substantive finding that the imported material had been diverted in breach of the actual user condition. The challenge before the Division Bench rested entirely on limitation.
3. Legal analysis
The statutory scheme. Section 28(9) of the Customs Act requires the proper officer to determine the duty or interest payable within six months of the notice for cases under Section 28(1)(a), or within one year for cases under Section 28(4) — the provision engaged here. The first proviso permits an officer senior to the proper officer to extend this period by a further six months or one year respectively, having regard to the circumstances that prevented timely determination; the second proviso, inserted by the Finance Act, 2018, deems the proceedings concluded as if no notice had been issued if determination does not occur even within the extended period. Section 28(9A) is a non-obstante provision operating independently of this scheme: where the proper officer is unable to determine the duty or interest because, among other listed reasons, an appeal in a similar matter is pending before the Tribunal, High Court or Supreme Court, or an interim stay has been issued by any of those forums, the officer must inform the person concerned of the reason for non-determination, and the period under Section 28(9) then runs not from the date of the notice but from the date that reason ceases to exist.
The Court noted, as a preliminary point going to the applicability of its own earlier authority, that this framework — the deletion of the words “where it is possible to do so” from Section 28(9), the deeming second proviso, and the whole of Section 28(9A) — dates from the Finance Act, 2018. Notices issued before 29 March 2018 continue, by virtue of Explanation 4 to Section 28, to be governed by the unamended provision and the judicially developed “reasonable period” doctrine rather than by Section 28(9A) itself.
Distinguishing Vos Technologies and declining to defer. The petitioners sought to rely on the Delhi High Court’s own decision in Vos Technologies Private Limited v. Principal Additional Director General (2024 SCC OnLine Del 8756), and on a Supreme Court order of 2 May 2025 in Union of India & Ors. v. GMR Airport Infrastructure Ltd. (SLP(C) No. 5392/2025) directing that hearings before any Tribunal or High Court relying on Vos Technologies be deferred pending the Supreme Court’s consideration, in its words, of “the larger issues involved in this matter”. The Supreme Court’s order recorded that “almost 250 matters came to be disposed of by the Tribunal following the judgment of the High Court of Delhi” and directed that any matter on the subject “may be deferred till we take an appropriate call in the matter.”
The Division Bench read Vos Technologies closely before applying that deferment order, and found it inapposite. Vos Technologies concerned a batch of notices — under both the Customs Act and the Central Goods and Services Tax Act, 2017 — that had remained “dormant for approximately 15 to 18 years,” transferred repeatedly and mechanically to the Call Book “without contemporaneous reasons being recorded or communicated to the noticees.” Those notices predated the Finance Act, 2018, and so were governed by the unamended Section 28(9) and the “reasonable period” doctrine, not by Section 28(9A). GKEM’s notice, issued in June 2022, falls within the post-2018 regime, so neither Vos Technologies nor the Supreme Court’s deferment order — limited, on its own terms, to matters actually relying on Vos Technologies — required deferment here. The case law under the older “reasonable period” test and under the codified Section 28(9A) exclusions is not interchangeable; a notice’s vintage relative to 29 March 2018 determines which line applies.
Call Book transfer versus the statutory circumstance. The petitioners argued that even if the eight-month extension were valid, it expired on 24 February 2024, well before the Order-in-Original of 29 November 2024, and that the Call Book transfer on 18 August 2023 could not extend time because they had not been separately informed of the transfer under paragraph 9.4 of Master Circular No. 1053/02/2017-CX dated 10 March 2017, nor furnished reasons for non-determination as Section 28(9A) itself requires.
The Court rejected this as resting on “a conflation of the administrative act of transferring a matter to the Call Book with the statutory consequence flowing from Section 28(9A) of the Act of 1962.” The circumstance in clause (b) of Section 28(9A) — an operative interim stay issued by a High Court in a similar matter — was squarely attracted, because the petitioners’ own writ petition concerned their entitlement to an extended Export Obligation Period, directly germane to their liability for the duty now demanded. That interim order was the circumstance that in fact prevented the proper officer from proceeding to a final determination; the Call Book entry was consequential to it, not its source. An administrative circular regulating Call Book administration — intended, the Court said, “to secure transparency and accountability” — “cannot override or displace the statutory consequence which follows upon the existence of a circumstance expressly contemplated by the Legislature.”
On the separate requirement that the officer inform the noticee of the reason for non-determination, the Court held that its underlying purpose was independently satisfied here: it was the petitioners themselves who had brought the pendency of their writ petition and the interim order to the department’s notice, and who had identified that circumstance as the very ground for seeking deferment. The Court was careful to note the limits of this finding — “the position would undoubtedly be different where the Department sought to rely upon an undisclosed circumstance or where proceedings were kept dormant for years without the noticee being apprised of the reason for such inaction” — but held that on the facts before it, the object of the requirement stood “fully achieved by the noticee’s own conduct” even without a formal letter from the proper officer.
The recomputation. Having found Section 28(9A)(b) applicable, the Court held that the circumstance ceased to exist on 8 December 2023, when the petitioners’ writ petition was dismissed, and that the one-year period under Section 28(9)(b) accordingly ran afresh from that date — not from the original notice date of 24 June 2022. On that computation, the unextended one-year period would have expired on 8 December 2024; the Order-in-Original, passed on 29 November 2024, fell within it. The Court expressly declined to decide whether, and on what basis, the earlier eight-month extension under the first proviso would attach to this freshly reckoned period, holding that question unnecessary once the unextended recomputed period itself covered the date of adjudication.
The independent, alternative ground. Having disposed of the limitation challenge on its merits, the Court went on to record — “as an independent and alternative ground,” distinct from and not necessary to its limitation finding — that it would in any event have declined discretionary relief under Article 226 of the Constitution. The petitioners had not, at any stage, controverted the substantive findings of diversion and breach of the actual user condition. More pointedly, the Order-in-Original recorded, and the department’s counter-affidavit confirmed, that the dismissal of the petitioners’ own writ petition on 8 December 2023 was never communicated to the adjudicating authority by the petitioners; the department discovered it only through its own review of pending Call Book matters. Having invoked the pendency of that petition as the ground for deferring their substantive reply — and having expressly reserved the right to file that reply once the petition was decided — the petitioners never filed it even after the petition was dismissed. The Court characterised this as attracting “the principle of approbate and reprobate”: a party cannot invoke a circumstance to keep adjudication in abeyance, decline to answer the substantive allegations during that period, and then derive an equitable advantage from the very passage of time its own deferment request occasioned.
What the judgment leaves open. The petition was dismissed with liberty to pursue the statutory appeal available under the Customs Act, and the Court was explicit that no observation in its judgment should prejudice the Appellate Authority’s consideration of any contention on the merits — including, presumably, the correctness of the duty demand itself and the quantum of interest, redemption fine and penalty confirmed. The ruling is confined to the limitation and Call Book question; it says nothing about whether the diversion finding or the duty computation would survive appellate scrutiny.
4. Practical significance
For importers and advisors with Advance Authorisation or similar export-obligation disputes pending before customs authorities, the judgment has several immediate consequences. First, an assessee who seeks deferment by invoking a pending writ petition or an operative stay in a related matter should recognise that doing so is likely to bring the notice within Section 28(9A), suspending rather than helping any eventual limitation argument — the deferment request itself supplies the statutory reason for non-determination that the assessee cannot later credibly say went uncommunicated. Seeking deferment now and arguing limitation later carries real risk after this ruling.
Second, once a related writ petition or appeal is disposed of, the assessee has a positive interest in promptly notifying the adjudicating authority — both to discharge any residual doubt about proper communication and, more practically, because failing to do so while the department discovers the fact independently through its own Call Book review can be used against the assessee on the separate question of discretionary relief, as it was here.
Third, for notices issued after 29 March 2018, counsel should not rely on delayed-adjudication precedent developed under the pre-2018 “reasonable period” doctrine — including Vos Technologies itself — without first confirming that the notice in question is not instead governed by the codified exclusions in Section 28(9A). The distinction is not cosmetic: it changes the analytical framework from an open-ended reasonableness inquiry to a mechanical, if fact-sensitive, computation keyed to enumerated statutory circumstances. The same caution applies where the pending Supreme Court reference in GMR Airport Infrastructure is invoked to seek deferment of a hearing; that order defers matters that actually rely on Vos Technologies, not every case involving delayed customs or GST adjudication.
Fourth, the judgment’s cross-reference to Vos Technologies — which addressed notices under both the Customs Act and the Central Goods and Services Tax Act, 2017 — is a reminder that delayed-adjudication litigation is not confined to customs. The CGST Act has no direct equivalent of Section 28(9A)’s enumerated exclusions, so the reasoning here on the interaction between the exclusion and the Call Book cannot simply be transposed to a GST show cause notice; practitioners handling stalled GST proceedings should examine the specific provisions and circulars applicable to CGST adjudication timelines rather than assuming this judgment answers the question for that regime as well.
Finally, taxpayers considering a writ challenge confined to limitation, while leaving the merits of a demand unaddressed, should weigh the discretionary consequences illustrated here. Even a technically arguable limitation point may not translate into relief where the assessee’s own conduct — silence on the merits, failure to communicate a change in the circumstance it had itself invoked — invites the court to treat the writ as an attempt to convert self-induced delay into a jurisdictional defect.
5. Conclusion
GKEM International resolves a narrow but recurring question: when an assessee’s own litigation against a related decision produces a stay that stalls a customs adjudication, does that stall count against the department for limitation purposes, or does the statute treat it as a circumstance outside the department’s control? The Delhi High Court’s answer — that Section 28(9A) excludes such periods regardless of whether the Call Book paperwork was perfectly executed, and that an assessee who invokes the circumstance cannot complain of a communication failure regarding that same circumstance — is a straightforward application of the post-2018 statutory text, but its significance lies in disentangling that text from both the department’s internal Call Book practice and the pre-2018 “reasonable period” jurisprudence that a pending Supreme Court reference might otherwise have imported into every delayed-adjudication case. The judgment leaves the merits of the underlying Advance Authorisation demand for the statutory appeal, and confines itself to holding that, on this timeline, the department acted within the period the statute allowed it.
Authorities
Applied and distinguished by the Court:
| Authority | Treatment |
|---|---|
| Vos Technologies Private Limited v. Principal Additional Director General, 2024 SCC OnLine Del 8756 (Delhi HC) | Distinguished — addressed pre-Finance Act, 2018 notices governed by the unamended Section 28(9) “reasonable period” doctrine, not Section 28(9A) |
| Union of India & Ors. v. GMR Airport Infrastructure Ltd., SLP(C) No. 5392/2025 (Supreme Court order dated 2 May 2025) | Considered and held not to require deferment, being confined to matters relying on Vos Technologies |
Cited by counsel (not the basis of the Court’s ratio):
| Authority | Cited by | Proposition |
|---|---|---|
| State of Punjab v. Bhatinda District Coop. Milk P. Union Ltd., (2007) 11 SCR | Petitioners | Limitation goes to jurisdiction and may be examined in writ proceedings despite an alternate remedy |
| Shri Ram Agro Chemical Pvt. Ltd. v. Union of India & Ors., 2019 SCC OnLine P&H 4918 (Punjab & Haryana HC) | Petitioners | An extension under Section 28(9) requires disclosed reasons, a hearing, and communication |
| Collector of Central Excise, New Delhi v. Bhagsons Paint Industry (India), 2003 (158) E.L.T. 129 (S.C.) | Respondents | Delay alone does not bar adjudication absent a specific limitation period |
| Commissioner, GST, Central Excise, Commissionerate-II, Chandigarh v. Swati Menthol and Allied Chemicals Ltd., 2023 (385) E.L.T. 642 (S.C.) | Respondents | Reasonable time to be assessed on the facts of each case |
| CCE v. M/s Gujarat Ambuja Exports Ltd., (2016) 15 SCC 208 | Respondents | Same |
Legislation and notifications:
- Customs Act, 1962, ss. 28, 28(4), 28(8), 28(9), 28(9A), 28AA, 28AAA, 108, and Explanation 4 to s. 28 — https://www.indiacode.nic.in/
- Finance Act, 2018 (amendments to Section 28)
- Notification No. 18/2015-Cus, dated 1 April 2015 (Advance Authorisation Scheme conditions)
- Notification No. 96/2009-Cus, dated 11 September 2009
- Master Circular No. 1053/02/2017-CX, dated 10 March 2017, para 9.4 (Call Book administration)
- Constitution of India, Article 226
FAQ
Does transferring a show cause notice to the Call Book automatically extend the limitation period under Section 28(9)? No. The Court held that the Call Book entry is only the administrative record of a circumstance falling within Section 28(9A); the exclusion depends on whether that statutory circumstance actually existed, not on whether the Call Book transfer was itself properly documented or communicated.
If an assessee asks the department to pause adjudication pending its own litigation, can it later argue the notice became time-barred? On facts like these, no. Because the assessee itself invoked the pending writ petition and its interim stay as the reason for deferment, the Court held the purpose of Section 28(9A)’s communication requirement was satisfied by the assessee’s own conduct, and the exclusion applied against it.
Does this judgment apply to delayed adjudication of GST show cause notices as well? Not directly. Section 28(9A) is a Customs Act provision; the CGST Act, 2017 has its own limitation architecture. The judgment does note that its own earlier ruling in Vos Technologies concerned notices under both statutes, but that ruling addressed pre-2018 notices under the “reasonable period” doctrine, which is a different framework from the one applied here.
This article is not legal advice and does not create an attorney–client relationship. Readers should verify the certified copy of the judgment and any subsequent clarificatory orders before relying on it, and consult a qualified advocate on the facts of their matter.