2010 (12) TMI 945 - HC - Customs

Confiscation - Cancellation of licence - violation of principles of natural justice - maintainability of the writ petition - Held that - The principle is well established that no writ would ordinarily lie if there is an effective and efficacious alternative remedy provided by the statute itself - Where the aggrieved party has an alternative remedy the High Court would be slow to entertain a petition challenging an order of a taxing authority, which is ex fade with jurisdiction - thus the High Court was right in dismissing the writ petition directing the Appellant to avail the statutory alternative remedy - it is well-settled that writ jurisdiction is discretionary jurisdiction and when there is an alternative remedy, ordinarily a party must resort to that remedy first before approaching this Court Regarding cancellation of licence - Held that - There is no dispute that while submitting explanation to the Show Cause Notice, the Petitioner did ask for personal hearing & there is no dispute that in response thereto the Respondent gave personal hearing on 19th March, 2010 when the Petitioner s sales executive Sri G.V.S. Kondala Rao appeared - The Adjudicating Authority granted more than three adjournments and when none appeared on 16th September, 2010, on behalf of the company, the incumbent Commissioner passed the impugned order. Thus it convincing that reasonable opportunity was not denied to the Petitioner. Alleged denial of natural justice is not reason enough to bypass the alternative remedy and approach this Court. As it is within the discretion of the High Court whether to exercise the jurisdiction or not. In this case, it is not a case where discretion under Article 226 of Constitution ignoring Section 122A of the Customs Act is to be exercised - writ petition is dismissed

Summary

Issues Involved:
1. Confiscation of sale proceeds of duty-free goods.
2. Imposition of penalty.
3. Cancellation of Private Bonded Warehouse licence.
4. Violation of principles of natural justice.
5. Maintainability of the writ petition in light of alternative remedies.

Detailed Analysis:

Confiscation of Sale Proceeds of Duty-Free Goods:
The Petitioner, operating duty-free shops, was found to have diverted non-duty paid goods to local markets, violating the Customs Act, 1962. The Respondent, exercising powers under the Act, ordered the confiscation of these goods.

Imposition of Penalty:
The Petitioner was penalized for unauthorized removal and sale of non-duty paid goods, manipulation of documents, and violation of licence conditions. The Respondent issued Show Cause Notices under Sections 72(1) and 28(1) of the Customs Act, demanding Customs Duty, interest, and penalties.

Cancellation of Private Bonded Warehouse Licence:
The Petitioner's licence, issued under Section 58(1) of the Customs Act, was cancelled due to violations. The Respondent provided multiple opportunities for the Petitioner to present their case, but the Petitioner failed to utilize these effectively.

Violation of Principles of Natural Justice:
The Petitioner argued that the impugned order was illegal as it was passed by a different Commissioner than the one who heard the case initially. The Court noted that the Petitioner was given multiple opportunities for a hearing, fulfilling the requirement of "reasonable opportunity" under Section 58(2)(b) and Section 122A of the Customs Act.

Maintainability of the Writ Petition:
The Court emphasized that judicial review under Articles 226 and 227 of the Constitution is discretionary and should not be exercised when an effective alternative remedy exists. The Customs Act provides an appellate mechanism, and the Petitioner should have availed this before approaching the High Court. The Court cited several precedents to support this principle, including decisions from the Supreme Court and other High Courts.

Conclusion:
The Court dismissed the writ petition, affirming that the Petitioner had adequate opportunities to present their case and that the principles of natural justice were not violated. The Petitioner was advised to seek remedy through the appellate mechanisms provided under the Customs Act. The judgment underscores the importance of exhausting alternative remedies before invoking the High Court's jurisdiction for judicial review.