2017 (8) TMI 1395 - HC - Customs

Principles of Natural Justice - case of petitioner is that the petitioner was never served any SCN as to why the assessment should not be finalized - Held that - As per Section 122A of CA, an opportunity of hearing to a party in a proceeding is required to be given before passing the order. If sufficient cause is shown at any stage of the proceeding, the adjudicating authority may grant more time to the party for reasons to be recorded in writing. In the present case, neither any show cause notice under the provisions of the Act was issued nor any opportunity of hearing was given to the petitioner before passing the impugned order, resulting in violation of principles of natural justice - Identical issue has been decided by this Court in R.V. General Trading v. Union of India, 2016 (9) TMI 673 - PUNJAB & HARYANA HIGH COURT , wherein in the absence of affording an appropriate opportunity of hearing, the impugned order was set aside and the matter was remitted back to the competent authority for fresh consideration - appeal allowed by way of remand.

Summary

Issues:
Violation of principles of natural justice in reassessment process without affording an opportunity of hearing or issuing a show cause notice to the petitioner.

Analysis:
In a bunch of 24 petitions, the petitioner sought to quash an order rejecting the declared classification and valuation of goods without following the prescribed procedure under the Customs Act, 1962. The petitioner, engaged in import and trading of Plain Plastic Film, imported goods and declared the value as per the invoice. Despite queries on undervaluation, the assessment was processed provisionally, and the duty was paid under protest. The petitioner requested a show cause notice and personal hearing, which were not provided. The respondent eventually rejected the declaration without proper adjudication, leading to the petition challenging the legality of the reassessment process.

The written statement argued that alternative remedies were available to the petitioner under the Act, and there was no need for a show cause notice or personal hearing as the classification had not changed. The respondent contended that the transaction value was rejected through the Electronic Data Interface System. The court heard arguments from both sides, with the petitioner citing Section 122A of the Act, which mandates an opportunity of being heard in proceedings.

The court noted that the petitioner was not given a proper opportunity of being heard before the final assessment was made, as required by Section 122A of the Act. The lack of a show cause notice and personal hearing before the impugned order was passed amounted to a violation of principles of natural justice. Citing a similar case precedent, the court set aside the impugned orders and remanded the matters to the competent authority for fresh consideration after affording the petitioner a proper opportunity of hearing in accordance with the law.

In conclusion, the court held that the respondents' actions in not providing an opportunity of hearing or issuing a show cause notice before the reassessment orders were passed were unjustified. The matters were remanded for fresh consideration with proper adherence to principles of natural justice, emphasizing that the decision should not be construed as an expression of opinion on the merits of the controversy. The writ petitions were disposed of accordingly.