2019 (7) TMI 1361 - HC - Customs

Principles of Natural Justice - grievance of the petitioner is, the impugned order dated 13th July, 2018 passed by respondent no.2, Commissioner of Customs is an order passed in breach of principals of natural justice - demand of custom duty u/s 28 of the Act - HELD THAT - The objective of giving show cause notice is not an empty formality. The objective is to make the party aware of the case it has to meet. Thus time is given to respond to the same. The reduction of time as given in the notice, certainly causes prejudice to the party. The conduct of the petitioner in not attending the personal hearing would not absolve the Revenue from giving time of thirty days as stated in the notice, on serving the complete show cause notice on the parties. In these circumstances, there has been failure of principles of natural justice inasmuch as the petitioner has not been given sufficient opportunity to meet the show cause notice. In these circumstances, directing the parties to avail of alternative remedy would be unfair as original proceeding is itself in breach of natural justice. SCN restored to the file of Commissioner of Customs, respondent no.2, for fresh disposal in accordance with law - petition allowed.

Summary

Issues:
Challenge to order passed by Commissioner of Customs under Customs Act, 1962 for breach of natural justice principles.

Analysis:
The petition challenged an order passed by the Commissioner of Customs under the Customs Act, 1962. The order confirmed a show cause notice demanding custom duty, imposing penalty, and confiscating imported goods. The petitioner contended that the order was passed in breach of natural justice principles as the show cause notice served was incomplete without annexures 'A' and 'B'. The petitioner received the complete notice only on 4th June, 2018, and requested time to file a reply. However, the Commissioner confirmed the notice on 13th July, 2018 without waiting for the reply or a hearing. The petitioner argued that this violated natural justice and sought the court's intervention.

The respondent argued that there was an alternative remedy available under the Act, and the petitioner's conduct indicated a delay tactic. The respondent highlighted that the petitioner did not approach the Commissioner for soft copies of annexures 'A' and 'B' and did not attend three scheduled hearings. The respondent contended that the court should not entertain the petition due to lack of cooperation from the petitioner.

The court noted that the show cause notice required a response within 30 days but was incomplete when served. The complete notice, including annexures 'A' and 'B', was received by the petitioner on 4th June, 2018. The court emphasized that the 30-day period to respond starts only after the complete notice is served. The petitioner had requested additional time to respond, but the Commissioner proceeded ex-parte without granting the requested time. The court stressed that the objective of a show cause notice is to inform the party of the case and provide sufficient time to respond. Failing to provide the complete notice within the stipulated time causes prejudice to the party.

Concluding that there was a failure of natural justice principles, the court quashed the impugned order and restored the show cause notice for fresh disposal by the Commissioner of Customs. The petitioner was directed to file a reply within two weeks, and the Commissioner was instructed to provide a personal hearing and pass an order in accordance with the law. The petition was disposed of accordingly.