2016 (3) TMI 770 - HC - Customs

Writ petition - Validity of show cause notice - Issued with pre-judged mind - Held that - by following the judgment of Hon ble Supreme Court in the case of Oryx Fisheris Private Limited v. Union of India 2010 (10) TMI 660 - SUPREME COURT OF INDIA , being a quasi-judicial authority, while, acting in exercise of its statutory power, must act fairly and must act with an open mind, while initiating show cause proceeding. When the first respondent had issued the show cause notices with pre-judged mind, there is no purpose in issuing show cause notices at all. The first respondent should have taken utmost care to manifestly keep an open mind, as they have to act fairly in adjudging the guilt of the petitioners and especially when he has a power to take punitive steps against the petitioners after giving them a show cause notice. Therefore, the show cause notice in question liable to be set aside. - Decided in favour of appellant

Summary

Issues:
Challenging show cause notices issued under Customs Act, 1962 on grounds of pre-judgment by the first respondent.

Analysis:
The petitioners filed writ petitions seeking a Writ of Certiorarified Mandamus to challenge show cause notices dated 08.05.2015 issued by the first respondent under sections 112 and 114AA of the Customs Act, 1962. The petitioners contended that the first respondent pre-judged the issue, violating the requirement to act fairly in adjudging guilt. The show cause notices contained statements indicating pre-determination, as highlighted by the petitioners' counsel, referencing specific paragraphs in the notices. The petitioners relied on a Supreme Court judgment emphasizing the need for quasi-judicial authorities to act fairly with an open mind when initiating show cause proceedings.

The petitioners argued that the show cause notices were issued with a pre-determined mind, rendering them invalid. The respondents' counsel contended that the writ petitions were not maintainable as the challenge to the show cause notices was based on their erroneous issuance. The court, considering the precedent set by the Supreme Court, held that the first respondent should have maintained an open mind and acted fairly while issuing the show cause notices. The court found that the contents of the notices indicated a pre-judged mind on the part of the first respondent, leading to the decision to set aside the show cause notices. The court allowed the writ petitions, setting aside the notices, but granted the authorities the option to issue fresh notices following due process as outlined by the Supreme Court.

In conclusion, the High Court of Madras ruled in favor of the petitioners, setting aside the show cause notices due to the first respondent's pre-judgment, in line with the principles of fairness and open-mindedness required in quasi-judicial proceedings. The judgment highlighted the importance of adhering to legal standards and providing individuals with a reasonable opportunity to defend themselves against proposed charges.