2018 (6) TMI 1026 - HC - Customs

Penalty u/s 112(a) and 112(b) of the CA 1962 - denial of cross-examination - principles of natural justice denied - Whether the impugned order stands vitiated by breach of principles of natural justice? - Held that - The petitioner was denied the right of cross-examination by the adjudicating authority without cogent ground. Consequently, the impugned order suffers from the vice of breach of principles of natural justice. Whether provisions of Section 112 of the Customs Act, 1962 allow the adjudicating authority to impose a penalty of an amount of his choice? - Held that - In view of the first issue being answered in the negative, the impugned order is required to be set aside. In such circumstances, the answer to the second issue becomes academic. Moreover, the second issue is pending for consideration before the Division Bench in the appeal carried from Gopal Saha 2016 (5) TMI 83 - CALCUTTA HIGH COURT - this issue is therefore not discussed in the present writ petition. Petition disposed off.

Summary

Issues:
1. Whether the impugned order stands vitiated by breach of principles of natural justice?
2. Whether provisions of Section 112 of the Customs Act, 1962 allow the adjudicating authority to impose a penalty of an amount of his choice?

Analysis:

Issue 1:
The petitioner challenged an order imposing a penalty under Sections 112(a) and 112(b) of the Customs Act, 1962. The petitioner claimed a breach of natural justice principles as he was denied the opportunity to cross-examine witnesses. Despite requests for cross-examination, the petitioner was not allowed to do so on multiple occasions. The adjudicating authority failed to address the petitioner's application for cross-examination, leading to a denial of natural justice. The right of cross-examination is crucial for a fair hearing, allowing the adjudicating authority to form an informed opinion based on the facts presented.

Issue 2:
The judgment focused on the breach of natural justice, rendering the discussion on the authority's power to impose penalties under Section 112 of the Customs Act, 1962 as academic. The impugned order was set aside due to the violation of natural justice principles. The second issue was not elaborated upon as it was pending consideration in a separate appeal. The order directed authorities to proceed with the show-cause notice and reply stages in accordance with the law, keeping all other points raised by the parties open for future consideration.

In conclusion, the High Court of Calcutta found the impugned order to be vitiated by a breach of natural justice principles, leading to its setting aside. The judgment highlighted the importance of adhering to fair procedures in adjudicating processes and emphasized the right to cross-examination as a fundamental aspect of a just hearing.