2021 (2) TMI 919 - HC - Customs

Service of relied on documents - Levy of penalty under Section 114(iii) and 114AA of the Customs Act, 1962 - principles of natural justice - HELD THAT - In the impugned order, though it is admitted that the reply was received in response to the show cause notice from the petitioner, this contention as regards the non-supply of the relied on documents was not dealt with or controverted - Nothing stopped the adjudicating authority from averring in the impugned order that the contention taken by the noticee/petitioner herein was false. He could have also furnished proof of having served the documents in question on the petitioner. Such an averment or finding is totally absent in the impugned order. The petitioner's counsel also drew my attention to yet another aspect. At page No.85 of the typed set of papers, the Speed Post cover in which the show cause notice was sent has been enclosed. It is seen therefrom that the said show cause notice was despatched on 26.02.2020. It is seen in the postal endorsement that the weight of the contents was 110 gms. and 50 Rupees stamp was affixed on the cover. The show cause notice runs to 36 pages. It is stated by the petitioner's counsel that the weight of the show cause notice alone would come to 110 gms. If all the 24 documents had been enclosed, the weight would have been much higher and that would have been reflected in the stamp value also. I find this circumstance to be quite interesting and indicative of the truth of the version projected by the petitioner herein. Thus, the writ petitioner was not served with copies of the documents relied upon by the department both in the show cause notice as well as in the impugned order - petition allowed - decided in favor of petitioner.

Summary

Issues:
1. Challenge to penalty imposed under Customs Act, 1962
2. Allegation of non-service of relied on documents
3. Jurisdiction to entertain writ petition when appealable before Tribunal

Analysis:
1. The petitioner challenged a penalty imposed under Sections 114(iii) and 114AA of the Customs Act, 1962, through a writ petition. The High Court highlighted the appealable nature of the order before the Tribunal, emphasizing the need for specific requirements under Article 226 of the Constitution of India to entertain such petitions.

2. The main issue revolved around whether the relied on documents were served on the petitioner. The petitioner contended that the documents were not furnished, citing a violation of natural justice principles. In response, the Standing counsel argued that the documents were indeed provided along with the show cause notice. The Court scrutinized the timeline of events, including the issuance of the notice, the petitioner's reply, and the absence of a response in the impugned order regarding the non-supply of documents.

3. The Court examined various aspects to determine the truth of the petitioner's claim. It noted discrepancies in the weight of the show cause notice and the absence of specific refutation in the impugned order. Based on these findings, the Court concluded that the petitioner was not served with the relied on documents, leading to the quashing of the impugned order. The directive was issued for the respondent to provide the documents, allowing the petitioner to respond within a specified period for fresh adjudication.

In conclusion, the writ petition was allowed solely on the grounds of non-service of documents, without delving into the merits of the case. The judgment emphasized the importance of procedural fairness and adherence to natural justice principles in administrative actions under the Customs Act, 1962.