Delhi High Court Refuses Common Adjudication of Three Zenlayer Customs Notices; Directs Company, Director and Co-Noticee to Pursue Statutory Appeals Against Customs Orders Instead
Delhi High Court Declines Article 226 Review of Zenlayer Customs Orders; Holds Statutory Appellate Authority Better Placed to Examine Evidence, Service and Limitation
Facts
The batch of writ petitions arose from a Directorate of Revenue Intelligence investigation into imports of information technology and networking equipment by Zenlayer Networks India Private Limited. The DRI alleged that networking equipment had been imported through third-party Importer Exporter Code holders by undervaluation, misdeclaration and without compliance with Bureau of Indian Standards requirements.
The investigation resulted in three separate show-cause notices. The first, dated 2 January 2023, concerned four live consignments intercepted at import and proposed confiscation, differential customs duty and penalties. The second, dated 20 November 2023, concerned 74 Bills of Entry relating to consignments already cleared and proposed differential duty under Section 28(4) of the Customs Act. The third, dated 21 November 2023, concerned networking equipment located at various data centres for which the Department alleged there was no lawful import documentation or evidence of customs clearance.
Zenlayer requested appointment of a Common Adjudicating Authority (CAA) for all three notices. CBIC, however, appointed a CAA only for the third notice. Zenlayer therefore filed W.P.(C.) 7091/2025 seeking a single authority for all three proceedings.
While that writ petition remained pending, the first two notices were adjudicated and culminated in Orders-in-Original dated 14 November 2025, confirming demands and penalties. Zenlayer challenged those orders separately in W.P.(C.) 1407/2026.
Amit Singh, Zenlayer’s former General Manager/Country Head and later Director, filed W.P.(C.) 1374/2026 alleging, among other things, that his detailed response to one of the notices had not been considered and that he was denied an effective personal hearing. Rahi Systems Private Limited, a co-noticee, filed W.P.(C.) 5470/2026 principally alleging violation of natural justice because subsequent hearing notices were not served at the email addresses it had specifically furnished.
The four petitions were heard together and disposed of by a common judgment.
Issues
The Delhi High Court considered whether Zenlayer was entitled to have all three show-cause notices adjudicated by a single CAA; whether the pendency of the earlier writ petition and the High Court’s interim order dated 19 August 2025 rendered the subsequent adjudication of two notices impermissible; whether the Orders-in-Original should be set aside for denial of an effective hearing to Zenlayer, Amit Singh or Rahi Systems; and whether these objections, including Zenlayer’s limitation challenge, ought to be examined under Article 226 despite the statutory appellate remedy under Section 128 of the Customs Act.
Petitioners’ Arguments
Zenlayer argued that all three notices emerged from the same DRI investigation, relied upon substantially overlapping material and concerned the same broad import transactions. It pointed out that several relied-upon documents were common to the notices.
It relied upon CBIC Circular No. 30/2015 dated 4 December 2015, submitting that cases involving identical issues and aggregate customs duty demands above the specified threshold ought to be placed before a common authority.
Zenlayer also relied upon Star Delta Exim (P) Ltd. v. Union of India, subsequently affirmed by the Supreme Court, to argue that connected show-cause notices based on common evidence should be adjudicated by one authority to prevent contradictory findings.
It further contended that the High Court, by its earlier order dated 19 August 2025, had already expressed the prima facie view that separate adjudication could result in contradictory outcomes. Zenlayer therefore argued that the customs authority ought not to have proceeded with adjudication of two notices while the common-authority writ petition was pending.
On the Orders-in-Original, Zenlayer alleged denial of an effective hearing and also raised a limitation objection concerning the determination under the show-cause notice dated 2 January 2023.
Amit Singh contended that he had submitted a detailed reply dated 27 March 2023, yet the adjudication order incorrectly recorded that no written submissions had been made by him. He also alleged that the final personal hearing notice was never received.
Rahi Systems argued that although it had furnished three alternative email addresses for future correspondence, later hearing notices were not sent to those addresses. It relied upon Jupiter Exports v. Commissioner of GST and Alaknanda Steel v. Commissioner for the proposition that an opportunity of hearing must be real and effective and that an ex parte order without proper service cannot stand.
Respondents’ Arguments
The Customs authorities principally relied upon the availability of the statutory appellate remedy under Section 128 of the Customs Act.
They argued that the writ challenges required examination of the adjudication record, disputed questions concerning service of notices, opportunities of hearing, evidence and the substantive findings in the Orders-in-Original. Such issues, according to the respondents, were properly matters for the statutory appellate authority rather than Article 226 proceedings.
On the common-adjudication issue, the respondents submitted that although the three notices originated from the same DRI investigation, their subject matter differed materially.
One concerned live consignments intercepted at import; another concerned 74 already-cleared consignments; and the third concerned equipment discovered at data centres allegedly without proper import documentation.
The respondents therefore maintained that the fact of a common investigation did not compel adjudication by one authority.
They also argued that the High Court’s order dated 19 August 2025 merely adjourned a particular hearing before the Commissioner of Customs, Mumbai. It contained no stay restraining the New Delhi adjudicating authority from proceeding with the other two notices.
Analysis of the Law
Common Adjudication Is Useful but Not Mandatory in Every Connected Case
The Court acknowledged that Zenlayer’s request for common adjudication was not without basis.
All three show-cause notices arose from the same DRI investigation and there was substantial overlap in the material relied upon by the Department.
However, common origin was not conclusive.
The notices dealt with distinct categories of transactions at different stages: live intercepted consignments, already-cleared consignments and goods subsequently located at data centres without alleged proof of lawful import.
The Court therefore rejected the proposition that every set of notices emanating from a single investigation must necessarily be decided by one adjudicating authority.
Precedent Analysis
Star Delta Exim (P) Ltd. v. Union of India
Zenlayer relied strongly upon the Rajasthan High Court’s decision in Star Delta Exim, which was subsequently affirmed by the Supreme Court.
The Delhi High Court accepted the principle that common adjudication can be highly appropriate where related show-cause notices are founded upon substantially identical material and separate proceedings may produce inconsistent findings.
However, the Court declined to transform that principle into an absolute rule.
It held that Star Delta could not be understood to mean that every notice emanating from a common investigation must be adjudicated by one authority irrespective of differences in the transactions, allegations and statutory consequences involved.
Further, by the time the Court finally decided the case, two of the three notices had already been adjudicated. A direction for a common authority at that stage would require disturbing completed adjudication, making the relief considerably less useful or effective.
Jupiter Exports and Alaknanda Steel
Rahi Systems relied upon these Delhi High Court decisions to emphasise the necessity of a real and effective opportunity of personal hearing and proper service of hearing notices.
The High Court did not dispute those principles. Instead, it held that the factual question whether Rahi Systems had actually been denied such an opportunity required scrutiny of the complete adjudication record.
The precedents therefore remained legally applicable, but whether their principles had been violated in the particular case was left to the statutory appellate authority.
Effect of the High Court’s Earlier Order
The Court rejected Zenlayer’s argument that its earlier order dated 19 August 2025 prohibited continued adjudication.
The observations regarding desirability of common adjudication were merely prima facie observations at an interlocutory stage.
The operative direction was confined to postponing a personal hearing before the Commissioner of Customs, Mumbai to a date beyond 10 November 2025.
There was no express stay against adjudication of the other two notices before the competent authority in New Delhi.
Consequently, the pendency of W.P.(C.) 7091/2025 did not render the subsequent Orders-in-Original without jurisdiction.
Alternative Statutory Remedy Under Section 128
The Court reiterated that existence of an alternative remedy is not an absolute bar to jurisdiction under Article 226.
However, writ jurisdiction may properly be declined where the impugned decision has been passed by a competent statutory authority and the challenge requires examination of disputed facts, the adjudication record, evidence and other matters that can effectively be considered in a statutory appeal.
That principle proved decisive.
The Orders-in-Original represented a consolidated adjudication involving 23 firms and individuals. The Court found no overarching jurisdictional defect apparent on the face of the record.
Instead, the petitioners’ objections concerned their individual factual circumstances.
Amit Singh’s Natural Justice Challenge
Amit Singh alleged that his written reply dated 27 March 2023 had not been considered and that he was denied a proper personal hearing.
The Court held that determining whether the reply had been received, whether it formed part of the adjudication record, whether it had been considered, and what hearing opportunities were actually afforded would require examination of the complete record.
The statutory appellate authority was fully competent to undertake that exercise and, where appropriate, permit him to present his case.
The High Court therefore declined to set aside the consolidated order against him through writ jurisdiction merely on the basis of disputed factual assertions.
Rahi Systems’ Notice-Service Challenge
Rahi Systems similarly alleged that later hearing notices were not sent to the three email addresses specifically furnished by it and had instead been sent to an account belonging to a former employee.
The Revenue disputed that position.
The Court held that questions concerning whether notices were properly served, how they were transmitted, whether an effective opportunity was available and whether prejudice resulted required scrutiny of the complete administrative record.
A mere assertion of breach of natural justice does not automatically justify bypassing a statutory appeal where the existence and effect of the alleged procedural violation themselves depend upon disputed facts.
Court’s Reasoning
The Delhi High Court essentially drew two conclusions.
First, while a single CAA can prevent inconsistent decisions in genuinely overlapping customs proceedings, a common investigation does not create an automatic right to common adjudication. The three notices here concerned materially different stages and categories of imports. More importantly, two had already been adjudicated by the time of final hearing.
Second, the challenges to the November 2025 Orders-in-Original were better suited to the statutory appeal mechanism.
The allegations concerning non-service, non-consideration of written replies, limitation and lack of effective hearing were not pure jurisdictional defects apparent on the face of the record. They required detailed examination of evidence and the adjudication file.
The High Court also noted that, in Zenlayer’s own case, the material before it showed that sufficient notices and opportunities had been afforded during adjudication.
Accordingly, the statutory appellate authority was considered better placed to determine the parties’ individual procedural and substantive grievances.
Conclusion
The Delhi High Court dismissed all four writ petitions, while expressly preserving the petitioners’ rights to pursue statutory appeals.
In W.P.(C.) 7091/2025, Zenlayer’s request for appointment of a single CAA for all three notices was declined. The Court held that neither the pendency of that writ nor its earlier order dated 19 August 2025 rendered the later adjudication of the first two notices without jurisdiction.
W.P.(C.) 1407/2026 filed by Zenlayer against the Orders-in-Original was dismissed without the High Court entertaining the merits. Zenlayer was permitted to raise all available grounds in its statutory appeal, including limitation and the effect of the 19 August 2025 order.
Amit Singh’s W.P.(C.) 1374/2026 was dismissed with liberty to raise his contentions regarding non-consideration of his written reply and denial of effective hearing before the appellate authority.
Rahi Systems’ W.P.(C.) 5470/2026 was also dismissed with liberty to raise its objections regarding service of hearing notices, the three email addresses supplied by it and denial of an opportunity to present its defence before the statutory forum.
The High Court expressly clarified that it had expressed no opinion on the merits of the customs allegations, valuation, liability to duty or penalty, limitation or the individual procedural objections.
Key Ratio
Common origin of multiple customs show-cause notices does not automatically require adjudication by one authority; and where challenges to customs orders depend upon disputed facts concerning service, hearing, evidence or limitation, the statutory appellate remedy should ordinarily be pursued instead of Article 226 jurisdiction.
Case Details
Case: Zenlayer Networks India Private Limited v. Union of India & Ors., with Amit Singh v. Union of India & Ors. and Rahi Systems Private Limited v. Union of India & Ors.
Court: High Court of Delhi at New Delhi
Case Numbers: W.P.(C.) Nos. 7091/2025, 1374/2026, 1407/2026 and 5470/2026
Judges: Justice Anil Kshetarpal and Justice Shail Jain
Judgment by: Justice Anil Kshetarpal
Reserved on: 29 July 2026
Date: 19 August 2026
Result: All four writ petitions dismissed. Common CAA relief declined; challenges to the customs Orders-in-Original not entertained in writ jurisdiction, with Zenlayer, Amit Singh and Rahi Systems left free to pursue their statutory appellate remedies and raise all substantive and procedural objections.
