2013 (5) TMI 831 - HC - Customs

Issuance of SCN - the petitioners had waived the right of reply and issuance of show cause notice, however, petitioners stated that they were compelled to do so by the authority - Held that - It is the mandate of law that before imposing any penalty and confiscation of goods, show cause notice with adequate opportunity of hearing must be given. Provisions of law cannot be said to have been waived by the petitioners - petitions are disposed of providing that the petitioners would be entitled to furnish reply to the impugned orders treating the same to be show cause notice.

Summary

Issues:
Violation of procedural fairness - Failure to issue show cause notice before imposing penalty and confiscation of goods.

Analysis:
The judgment by B.K. Sharma, J. of the GAUHATI HIGH COURT addresses the issue of procedural fairness in two writ petitions where the petitioners challenged orders passed by the Assistant Commissioner, Customs Division, Dhubri. The orders, dated 22.12.2004, seized 88 bales and 102 bales respectively under Section 111(b) of the Customs Act, 1962, and imposed penalties without issuing a show cause notice. The petitioners contended that they were not given an opportunity to respond before the orders were issued, although they had allegedly waived their right to reply under duress. The court emphasized that the law mandates the provision of a show cause notice and an adequate opportunity to be heard before imposing penalties and confiscating goods, which cannot be waived by the petitioners.

The judgment highlights that the petitioners, through their counsel, argued that despite making payments pursuant to the impugned orders, they still had the right to a hearing and, if successful, should be entitled to a refund. In response, the court disposed of both writ petitions by allowing the petitioners to treat their replies as show cause notices. The petitioners were granted an opportunity to provide their responses by the 10th of June, 2013. The court directed the Authority to consider these replies and pass appropriate orders in accordance with the law, ensuring that the petitioners' right to be heard and contest the penalties imposed is upheld.

In conclusion, the judgment underscores the significance of procedural fairness in administrative actions, particularly in matters involving penalties and confiscation of goods under the Customs Act, 1962. It reaffirms that the right to a show cause notice and a fair hearing is fundamental and cannot be waived arbitrarily. The court's decision to allow the petitioners to respond and have their cases reconsidered based on their submissions upholds the principles of natural justice and due process in the adjudication of such disputes.