2019 (1) TMI 11 - HC - Customs

Revocation of CHA License - forfeiture of security deposit - imposition of penalty - principles of natural justice - case of petitioner is that the respondent is not justified in holding that the petitioner is guilty of such charge also, without informing the petitioner about his disagreement on the enquiry report in respect of such charge and and without calling upon the petitioner to file his objection on such disagreement - Held that - The respondent neither disclosed his mind or decision of disagreement with the findings of the Inquiry Officer with regard to the charge made in respect of Regulation 11(m) nor called upon the petitioner to file their objection with regard to such disagreement - Needless to say that when the charges are levelled and an enquiry is conducted based on such charges, the enquiry report filed by the Inquiry Officer is a crucial document and if the disciplinary/punishing authority intends to disagree with the whole or any of the findings rendered by the Inquiry Officer, in respect of the whole or any of the charges, he has to necessarily put the person, against whom such charges are made, on notice, by specifically expressing his disagreement and call upon such person to give objection on such disagreement. The petitioner should be given an opportunity to place their objections as against the disagreement of the respondent in respect of the charge levelled in relation to Regulation 11(m) - petition allowed.

Summary

Issues:
Violation of principles of natural justice in revoking Customs Broker License.

Analysis:
The petitioner, a Customs Broker License holder, filed a Bill of Entry for clearance of consignment on 24.07.2018. Subsequently, a show cause notice was issued proposing a penalty under the Customs Act. An Order-in-Original was passed imposing a penalty on the petitioner. Another notice was issued under Customs Broker License Regulations, 2013, for non-compliance with certain provisions. An Inquiry Officer was appointed, who found one charge sustainable and another not. However, the respondent passed an order revoking the license without informing the petitioner about the disagreement on the charges. The petitioner contended a violation of principles of natural justice citing a Delhi High Court decision.

During the proceedings, the Standing counsel for the respondent argued that the Inquiry Officer's report was forwarded to the petitioner for representation, but it did not disclose the respondent's disagreement on one of the charges. The communication lacked transparency in expressing disagreement with the findings, depriving the petitioner of the opportunity to respond to the disagreement. The Court emphasized the importance of disclosing disagreement and allowing the concerned party to present objections in such cases, citing a Delhi High Court decision.

In light of the above, the Court held that the petitioner must be given an opportunity to present objections regarding the disagreement on one of the charges. The punishments imposed were set aside, and both parties were directed to treat the communication as reasons for disagreement, with the petitioner required to submit objections within two weeks. The respondent was instructed to pass a fresh order based on merits and in compliance with the law within four weeks. No costs were awarded, and the connected miscellaneous petition was closed.