2020 (11) TMI 196 - HC - Customs

Withdrawal of customs broker license to petitioner - Legality and validity of public notice No.29/2020-21 dated 07.09.2020 - HELD THAT - Since the impugned order withdrawing customs brokerage license of the petitioners would admittedly lead to adverse civil consequences upon the petitioners, the same ought to have been preceded by a notice and a reasonable opportunity of hearing. Intimating the petitioners about nine months back that because of the new regulations (2018 Regulations), its license may be withdrawn if there is no compliance, may not meet the requirement of principles of natural justice in so far the impugned action is concerned. Besides, the order must speak in itself. An order withdrawing a benefit must give reasons why the benefit has been withdrawn. Non-furnishing of reasons would vitiate such an order. Matter remanded back to respondent No.2 i.e., Principal Commissioner of Customs (General), Mumbai who shall give an opportunity of hearing to the petitioners and thereafter pass an appropriate order in accordance with law within a period of 3 weeks from the date of receipt of a copy of this order - petition allowed by way of remand.

Summary

Issues:
Challenge to the legality and validity of a public notice withdrawing a customs broker license.

Analysis:
The petition challenged the legality and validity of a public notice issued by the Deputy Commissioner of Customs, Customs Broker Station, Mumbai, withdrawing the customs broker license of the petitioners. The petitioners, a company engaged in logistics and freight services, had been granted a license to transact business as a customs broker all over India. The license was issued on the basis of the qualification of one of the petitioners from the Bangalore Customs Commissionerate. The impugned public notice dated 07.09.2020 withdrew this license, prompting the filing of the writ petition seeking relief.

The respondents contended that the petitioners had applied for a new customs broker license under the Customs Broker Licensing Regulations, 2018, based on the qualification of one of the petitioners from the Bangalore Customs Commissionerate. The Central Board of Indirect Taxes and Customs clarified the eligibility criteria for obtaining a customs broker license. The petitioners were granted a provisional license, and were given time to appoint a qualified person failing which the license would be withdrawn. The respondents argued that the petitioners could work as customs brokers in all customs stations, including Mumbai, after two years as per the regulations.

During the hearing, the petitioners argued that the impugned order violated the principles of natural justice as they were not heard before the withdrawal of the license, and no reasons were provided in the order. They relied on a Supreme Court decision and provisions of the Customs Act, 1962, to support their contention that the new regulations should not be applied retrospectively to nullify their rights accrued under the previous regulations.

The Court, after considering the submissions, held that the withdrawal of the customs brokerage license without a notice and a reasonable opportunity of hearing was against the principles of natural justice. The Court emphasized that an order withdrawing a benefit must provide reasons for the withdrawal, and the lack of reasons would vitiate the order. Therefore, the Court set aside the impugned order and remanded the matter back to the Principal Commissioner of Customs (General) to provide an opportunity of hearing to the petitioners and pass an appropriate order within three weeks. The fresh order should be a speaking order and communicated to the petitioners, with the maintenance of status quo until a new decision is made.

In conclusion, the writ petition was disposed of, emphasizing the importance of principles of natural justice and the requirement for reasons in orders withdrawing benefits.