2018 (12) TMI 510 - HC - Customs

Suspension of CHA License - Regulation 16 of the Customs Brokers Licensing Regulations 2018 - principles of natural justice - Held that - Indeed, the Ext.P4 order of suspension was passed on 26.11.2018. It is an interim measure, and no doubt the Commissioner of Customs has the power to do so. That said, I may also add that suspending a trade license-rhetorically put, an economic death sentence-visits upon the licensee with severe financial consequences. So it offends the notions of justice and constitutional morality if the authorities take too technical a view of the provisions dealing with suspension of license. To meet the ends of justice, as mandated under the Regulation 16, the Customs Department will immediately inform MBK Logistics, through a detailed notice, about the grounds of suspension, and hear its representative - petition disposed off by way of remand.

Summary

Issues: Suspension of trade license without proper notice and grounds

The judgment by the High Court of Kerala dealt with the suspension of a trade license held by MBK Logistics Pvt. Ltd., a steamer agent, by the Commissioner of Customs through the Ext.P4 order. The petitioner challenged this suspension through a writ petition, arguing that the suspension lacked proper reasons and violated principles of natural justice. The petitioner's counsel, Sri P.G. Jayashankar, contended that the Ext.P4 order did not provide reasons for the suspension and was not preceded by any notice informing the petitioner of the grounds for suspension. On the other hand, the learned Additional Solicitor General, Sri Natraj, argued that the suspension was in accordance with Regulation 16 of the Customs Brokers Licensing Regulations 2018, which allows for an interim suspension without the need for detailed reasons upfront. The court considered the arguments presented by both sides and examined Regulation 16, which outlines the procedure for suspending a license and the requirement to provide an opportunity for a hearing within fifteen days of suspension.

The court acknowledged the authority of the Commissioner of Customs to issue an interim suspension under Regulation 16 but emphasized the importance of adhering to principles of natural justice, especially when such suspensions could have severe financial consequences for the licensee. The court held that the Customs Department must inform MBK Logistics of the grounds for suspension through a detailed notice, provide an opportunity for a hearing, and pass orders expeditiously within two weeks of the judgment. The court emphasized that MBK Logistics could present its defense and relevant records once notified of the grounds for suspension. Ultimately, the writ petition was disposed of with the court's directions for the Customs Department to follow the procedures outlined in Regulation 16 to ensure a fair and just process in dealing with the suspension of the trade license.