2011 (7) TMI 291 - HC - Customs

Provisional assessments - No speaking order - principles of natural justice - Merely because there was a special drive to clear a backlog of matters, that would afford no justification for the department not to comply with fundamental principles of natural justice - During the course of the hearing, it has been stated before the Court by Counsel appearing on behalf of the Respondents that the Petitioners were not afforded an opportunity of being heard by the authority which passed the order - Held that adjudicating authority shall take necessary steps in accordance with law to finalize the assessment after furnishing to the Petitioners an opportunity of being heard and complying with the principles of natural justice, on an expeditious basis

Summary

Issues:
Violation of natural justice in finalization of provisional assessments without hearing the Petitioners.

Analysis:
The Petitioners challenged a communication from the Assistant Commissioner Customs informing them that the Deputy Commissioner had finalized provisional assessments without providing a hearing or passing a speaking order. The Court noted the lack of compliance with natural justice principles and rejected the suggestion to file an appeal, as the Petitioners were not given an opportunity to be heard. Citing the case of Automotive Tyre Manufactures Asson v. Designated Authority, the Court emphasized that a personal hearing is crucial, and failure to adhere to natural justice principles renders the order invalid. Despite the department's backlog clearance drive, efficiency cannot override fundamental legal principles.

The Court held that the impugned communication and assessment orders must be set aside. A direction was issued for the Deputy Commissioner to pass fresh orders after granting the Petitioners a hearing, ensuring compliance with natural justice principles. The Petitioners were instructed to appear before the Deputy/Assistant Commissioner with a copy of the order for expeditious assessment finalization. The Court made the rule absolute, indicating no costs to be awarded in the matter.