2017 (10) TMI 988 - HC - Customs

Principles of Natural Justice - only ground for assailing the said order before this Court under Article 226 of the Constitution of India is, the breach of principles of natural justice by the Respondent, a Quasi Judicial Authority - Held that - this Court is satisfied that the principles of natural justice have not been followed in the present case and Respondent Authority appears to have passed the said order in a hot haste without giving a reasonable and breathing time to the petitioner Company for taking its defence before the said Authority and verify the relevant evidence produced by them. The said order, therefore, cannot be sustained and deserves to be set aside. The Quasi Judicial Revenue Authorities while assigned the job of collection of Revenue in accordance with law need not act in a rash manner and throw the principles of natural justice to winds like it has been done in the present case and this Court does not find any justification for fixing three consecutive dates for personal hearing on 06/10/2015, 07/10/2015 and 08/10/2015 and then closing the opportunity for the petitioner Company to defend its case and passing an ex- parte order. The ends of justice cannot be met merely because an order raising a demand of tax or duty is passed by the Authority concerned but such orders also have to show that not only the adequate opportunity has been given to the assessee concerned but also there has been due and reasonable application of mind on the part of the Authority concerned before raising such demand. Petition allowed with costs - matter on remand.

Summary

Issues:
1. Breach of principles of natural justice by the Respondent - Additional Commissioner of Customs.

Analysis:
The petitioner, an assessee, filed a writ petition challenging the order passed by the Respondent - Additional Commissioner of Customs, raising a demand of Customs Duty and confiscation of goods. The only ground for challenging the order was the alleged breach of principles of natural justice by the Respondent, a Quasi Judicial Authority. The petitioner contended that they were not given a fair opportunity to present their case before the Authority. Despite the petitioner's Factory being taken over by Banks, the notices for personal hearings were served through the bank's watchman, leading to a delay in the petitioner's response. The Authority passed an ex-parte order without considering the petitioner's defense, prompting the petitioner to approach the Court.

The Court, after hearing arguments from both parties, found that the principles of natural justice were indeed violated in this case. The Court criticized the Authority for not providing a reasonable opportunity to the petitioner to present their defense and verify the evidence produced by them. The Court emphasized that Revenue Authorities must not act hastily and must adhere to principles of natural justice. Passing orders without due consideration and adequate opportunity to the assessee only adds to unnecessary litigation, which goes against the interests of justice and the Government. The Court highlighted the importance of fair procedures and reasoned decision-making by the Authorities.

Consequently, the Court allowed the petition, directing the Respondent Authority to set aside the impugned order and pass fresh orders after giving a fair opportunity of hearing to the petitioner and considering the relevant evidence. The Authority was instructed to pass a speaking order in the matter. Additionally, the Court imposed costs on the Respondent Authority for the petitioner's legal expenses. The petitioner was granted a period of three months to appear before the Authority for further proceedings, emphasizing the need for a just and thorough review of the case.