2018 (5) TMI 454 - HC - Customs

Principles of natural justice - main grievance of the Writ Petitioner before the Writ Court is that they were not given an opportunity to cross-examine any witness - under-valuation - Held that - When the show-cause notice was issued with certain allegations of mis-declaration of the value, reply to the show-cause notice should meet the such allegations and state specifically as to how such allegations are factually and legally not correct or sustainable - In this case, the Adjudicating Authority has pointed out that no such contention was raised in the reply to the show-cause notice as well as in the written submission made during the personal hearing. Whether the contentions raised by the Petitioner before Adjudicating Authority are sufficient and consequently, based on those reply and the written submission whether the Petitioner is entitled to cross-examination of witnesses is certainly a matter for the next fact finding authority viz., The Tribunal to consider and decide and not for this court while exercising the discretionary jurisdiction of Article 226 of the Constitution of India - the question of violation of principles of natural justice as raised in this case, cannot be decided without going into the merits of the matter, more particularly, without appreciation of the materials placed before the Adjudicating Authority and hence, the contention of the writ petitioner that, in this case, there is a clear-cut violation of principles of natural justice, cannot be accepted. Maintainability of petition - alternative remedy - Held that - It is well settled that in a case involving fiscal nature, availing of statutory appellate remedy has to be first exhausted and hence, the party cannot come to this Court directly and file a petition under Article 226 of the Constitution of India - the filing of the very writ petition itself against the order of the Adjudicating Authority is not maintainable, as the appellant/writ petitioner is having statutory and efficacious appellate remedy before the appellate Tribunal, in this case, CESTAT. Appeal disposed off.

Summary

Issues:
1. Violation of principles of natural justice regarding the opportunity to cross-examine witnesses.
2. Maintainability of the writ petition against the order of the Adjudicating Authority.

Issue 1: Violation of Principles of Natural Justice - Opportunity to Cross-Examine Witnesses

The case involved the import of Dyed Polyester Woven Fabric, with the appellant alleged to have undervalued the goods by 75%. The Adjudicating Authority passed an order of adjudication, rejecting the declared value and ordering payment of duty, confiscation of goods, and imposing penalties. The appellant contended that they were not given the opportunity to cross-examine any witness, leading to a violation of principles of natural justice.

The Writ Court found that the appellant did not provide an explanation to the show-cause notice, thus not entitling them to cross-examine witnesses. The Court emphasized that the appellant needed to substantiate their stand taken in the reply to the notice to be eligible for cross-examination. The Court allowed the appellant to appeal before the Appellate Tribunal to address the issue of cross-examination.

The appellant argued that they had submitted a written submission during the personal hearing, which should have granted them the right to cross-examine witnesses. However, the respondents contended that the appellant did not address the allegations in the show-cause notice adequately in their responses, thus not warranting the right to cross-examine.

The High Court held that the issue of violation of principles of natural justice could only be determined by the Appellate Tribunal, as it required a detailed examination of the materials presented before the Adjudicating Authority. The Court clarified that the appellant could raise the issue of cross-examination before the Tribunal, leaving the matter open for further consideration.

Issue 2: Maintainability of the Writ Petition

The Adjudicating Authority had issued the impugned order after providing a show-cause notice and an opportunity for a personal hearing to the appellant. The appellant argued that the lack of opportunity to cross-examine witnesses constituted a violation of natural justice. However, the Court found that the reasons for not allowing cross-examination were factual issues to be determined by the Appellate Tribunal.

The Court referenced previous judgments emphasizing that in cases of fiscal nature, the statutory appellate remedy must be exhausted before approaching the High Court under Article 226 of the Constitution. Therefore, the Court concluded that the writ petition against the Adjudicating Authority's order was not maintainable, as the appellant had a statutory right to appeal before the Appellate Tribunal.

The High Court disposed of the Writ Appeal, granting the appellant four weeks to file an appeal before the Appellate Tribunal. The Tribunal was directed to consider the appeal on its merits and in accordance with the law, without being limited by the period of limitation. No costs were awarded, and the connected Civil Miscellaneous Petition was closed.

This detailed analysis of the judgment addresses the issues of violation of natural justice and the maintainability of the writ petition comprehensively, outlining the court's reasoning and conclusions on each matter.