2010 (7) TMI 529 - HC - Customs

Exported clandestinely - Suspension of license - Regulation 20(2) of the Regulations - power under Regulation 20(2) is more drastic compared to power under Regulation 22, but both the Regulations operate in different situations - In the present case, reason given for immediate action is that investigation was pending which could be hampered and further irregularities could take place unless licence was suspended - under Regulation 20(3) of the Regulations, opportunity of hearing is required to be given within 15 days of the order of suspension - No doubt where a party is affected, normal rule of natural justice is that hearing is to be given to the affected party before passing an order, but in emergent situation, order can be permitted to be passed, subject to the hearing being given within reasonable time - The petition is disposed of

Summary

Issues:
Quashing of order suspending license under Customs House Agents Licensing Regulations, 2004.

Analysis:
The petitioner sought the quashing of an order suspending their license under the Customs House Agents Licensing Regulations, 2004. The order was based on allegations that prohibited goods were being exported clandestinely with the involvement of an individual claiming to be an employee of the petitioner. The Commissioner of Customs suspended the license under Regulation 20(2) to prevent further irregularities during the investigation. The petitioner argued that action could not be taken solely based on the statement of the individual involved and that Regulation 22 should have been applied after a prior hearing. However, the court held that the power under Regulation 20(2) could be invoked for immediate action when necessary, as in this case where investigation was ongoing and potential irregularities could occur if the license was not suspended.

The court emphasized that the power under Regulation 20(2) is more drastic compared to Regulation 22, but both regulations serve different purposes. The decision to suspend the license was based on the assessment of the situation by the concerned authority, and interference was only warranted if the exercise of power was arbitrary or mala fide. The court found that there was a valid reason for taking action under Regulation 20(2) and declined to interfere with the decision. Additionally, under Regulation 20(3), the petitioner was entitled to an opportunity for a hearing within 15 days of the suspension order. While natural justice dictates that a party should be heard before an order is passed, in emergent situations, the order can be issued subject to a subsequent hearing within a reasonable time frame. The court clarified that the petitioner could present their case within the specified timeframe, and if the authority was convinced, the suspension could be revoked.

In conclusion, the court disposed of the petition, stating that there were no grounds for interference at that stage. It was clarified that no opinion on the merits of the case was expressed, leaving room for further proceedings based on the petitioner's presentation during the hearing within the stipulated time frame.