The Madurai Bench of the Madras High Court has come down strongly on the Customs Department, setting aside its order that revoked the license of a Tuticorin-based customs broker. Justice G.R. Swaminathan, while allowing the writ petition filed by M/s. ACS Shipping & Logistics, held that the action of the Customs Commissioner was "hopelessly barred by limitation" and therefore unsustainable in law.
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The order, passed on October 22, 2025, marks yet another instance where the court emphasized strict adherence to procedural timelines under the Customs Brokers Licensing Regulations, 2018 (CBLR).
Background
The petitioner, ACS Shipping & Logistics, a licensed customs broker in Tuticorin, faced disciplinary action after one exporter, M/s. J. Tex India, was found to have availed fraudulent IGST refunds and other export incentives using fake GST registration.
The Customs Commissioner of Tuticorin, treating ACS as the broker who had filed shipping bills for the errant exporter, issued an order in February 2022 revoking the company’s license, forfeiting its security deposit, and imposing a penalty of ₹50,000.
The company challenged the order before the High Court, alleging that it was issued long after the permissible period under CBLR and without following due procedure.
The fraud was detected as early as 2018. The authorities in Mumbai had already prohibited the petitioner from operating in their jurisdiction in November 2020. Yet, the Tuticorin Customs chose to issue the show-cause notice only in September 2021 - far beyond the 90-day limit, argued counsel for the petitioner.
Court's Observations
Justice Swaminathan examined in detail the scope of Regulation 17(1) of the CBLR, 2018, which mandates that any notice to revoke a customs broker’s license must be issued within ninety days of receiving the offence report.
The judge clarified that under the 2018 Regulations, an 'offence report' is not limited to a penal document but includes any official communication or order setting out allegations of misconduct.
"The prohibitory order dated 18.11.2020 issued by the Principal Commissioner of Customs (General), Mumbai Zone–I clearly qualifies as an offence report," the court observed.
He further added,
"It is well settled that all official acts are presumed to have been done regularly. Hence, it is safe to conclude that the Tuticorin Commissioner received a copy of this report in the normal course."
The bench noted that the Customs Department had not furnished any proof showing when exactly the offence report was received, nor did it deny the petitioner’s contention that the report was available much earlier.
"In the absence of material to prove that the report was received only in June 2021, I have no hesitation to hold that the proceedings are barred by limitation," Justice Swaminathan remarked.
He criticized the department’s lack of diligence, saying that the burden to establish compliance with limitation lies solely on the authority initiating such punitive action.
Decision
The High Court ultimately quashed the Customs Commissioner's order dated 25 February 2022, terming it 'time-barred and unsustainable.'
"The impugned proceeding is time-barred and I quash the same," Justice Swaminathan declared, allowing the writ petition filed by ACS Shipping & Logistics.
No costs were awarded, and the connected miscellaneous petition was also closed.
With this ruling, the court reaffirmed that authorities cannot override statutory limits, even in cases involving alleged fraud, unless they act within the prescribed timeframe and provide fair opportunity to the affected parties.
The decision serves as a reminder to enforcement bodies to uphold both procedural discipline and the principles of natural justice - values that the judiciary continues to safeguard with consistency.
Case Title: M/s. ACS Shipping & Logistics vs The Commissioner of Customs, Tuticorin
Case Number: W.P.(MD) No. 4416 of 2022 and W.M.P.(MD) No. 3727 of 2022
Date of Judgment: 22 October 2025
Petitioner's Counsel: Mr. S. Baskaran
Respondent's Counsel: Mr. R. Gowrishankar, Standing Counsel
