2011 (4) TMI 1085 - HC - Customs

Conversion of their free shipping bills to DEPB shipping bills - conversion disallowed in view of the supersession of Circular NO.6/2003-cus dated 28.1.2003 by Circular No.04/2004-Cus dated 16.1.2004 Held that - order has been passed without affording any opportunity of hearing to the petitioners, without going into the merits of the petitioners claim for conversion of their free shipping bills to DEPB shipping bills, the petition is allowed

Summary

Issues:
Challenge to the action of respondents in refusing to convert shipping bills, Violation of principles of natural justice in passing the impugned order.

Analysis:
The petition sought writs to quash the action of the respondents in refusing to convert shipping bills and to direct issuance of DEPB licenses based on the bills. The petitioner argued that the impugned order was passed without granting a hearing, violating principles of natural justice. The respondents contended that the petitioners were not entitled to the conversion. The High Court noted that the impugned order disallowed the conversion without a hearing, breaching natural justice principles. The court held that the order was unsustainable due to this violation.

The court found that the petitioners' applications for conversion were rejected without affording them a hearing, contrary to natural justice. The impugned order disallowed the conversion based on a circular without providing an opportunity for the petitioners to present their case. The court emphasized that before passing an adverse order, the principles of natural justice must be followed. As the impugned order failed to comply with these principles, it was deemed violative of natural justice and unsustainable.

The judgment quashed and set aside the impugned order and directed the competent authority to reconsider the applications within six weeks, ensuring a fair hearing for the petitioners. The court ruled in favor of the petitioners on the grounds of the violation of natural justice, without delving into the merits of the conversion claim. The rule was made absolute with no order as to costs, granting relief to the petitioners based on the procedural irregularity in the decision-making process.