2008 (1) TMI 636 - HC - Customs

circular No. 206/2007 dated 22nd December, 2007 - Suspension of CHA licence - impugned circular suspending the petitioner No. 1 was issued by the Commissioner in exercise of the power vested under Regulation 20 - Non-disclosure of grounds or reasons in the circular was in violation of the principles of natural justice. In such circumstances alternative remedy provided under Sub-Regulation (8) of Regulation 22 is no bar from moving the writ petition under Article 226 of the Constitution of India - Non-disclosure of grounds or reasons in the circular was in violation of the principles of natural justice. In such circumstances alternative remedy provided under Sub-Regulation (8) of Regulation 22 is no bar from moving the writ petition under Article 226 of the Constitution of India - the writ application is allowed

Summary

Issues: Challenge to suspension of customs house agent license without providing reasons

Analysis:
1. The petitioners, a customs house agent partnership firm and its partners, challenged the establishment circular suspending the petitioner No. 1 with immediate effect due to alleged misconduct without providing reasons or grounds for the suspension.

2. The suspension was carried out under Regulation 20 of the Customs House Agents Licensing Regulations, 2004, which allows for suspension or revocation of a license based on specific grounds like failure to comply with bond conditions, regulatory provisions, or misconduct rendering the agent unfit for business.

3. Regulation 22 outlines the procedure for suspending or revoking a license, requiring the Commissioner of Customs to issue a written notice to the agent stating the grounds for suspension, allowing the agent to submit a defense within a specified time, and providing an opportunity for a hearing before passing orders.

4. The Court found that the impugned circular failed to state any grounds for the suspension, violating the principles of natural justice embedded in Regulation 22, which mandate informing the agent of the reasons for suspension to allow for a defense. Any breach of natural justice warrants judicial intervention under Article 226 of the Indian Constitution.

5. Even if the suspension was under Regulation 20(2) for cases requiring immediate action, the circular should have included reasons for the suspension. The lack of disclosure of grounds in the circular rendered it unsustainable, justifying setting it aside and quashing it through the writ petition under Article 226.

6. Consequently, the Court allowed the writ application, setting aside the impugned circular and quashing the suspension, emphasizing the importance of adhering to natural justice principles in administrative actions.

7. No costs were awarded, and all parties were instructed to act based on the operative portion of the order, underscoring the importance of following due process and providing reasons for administrative decisions to ensure fairness and transparency in regulatory actions.