2021 (3) TMI 1015 - HC - Customs

Violation of principles of natural justice - petitioner has been put under the Denied Entity List (DEL) - despite sending a detailed objection to the show cause notice issued by the respondents, the same has not been considered and without affording a fair hearing, the impugned order has been passed - HELD THAT - In the case on hand, the petitioner has been put under the Denied Entity List (DEL) by the respondents by exercising the power under Rule 7 of Foreign Trade (Regulation) Rules, 1993. However, as seen from the impugned order, no reasons have been given for putting the petitioner under the Denied Entity List (DEL). The petitioner has admittedly given a reply to the show cause notice, dated 20.07.2020 issued by the respondents on 05.02.2020. The same has been admitted by the respondents. In the reply to the show cause notice dated 05.02.2020, the petitioner has contended that they have not violated the provisions of Foreign Trade (Regulations) Rules, 1993 in view of the fact that the imports were made by them, pursuant to interim stay order granted by this Court in respect of the notifications issued by the respondents. As seen from the reply dated 20.07.2020, the petitioner has raised several contentions. Under the impugned Communication, dated 05.10.2020, none of the objections raised by the petitioner has been considered by the 1st respondent. The impugned communication is a non speaking order. Rule 7 of the Foreign Trade (Regulation) Rules, 1993 makes it clear that reasons will have to be given for putting the petitioner under the Denied Entity List (DEL) - Since, no reasons have been given, this Court is of the considered view that principles of natural justice has been violated by the respondents. The petitioner ought to have been afforded a fair hearing before such an order could have been passed. The matter remanded back to the respondents for fresh consideration on merits and in accordance with law after affording a fair hearing to the petitioner - Petition allowed by way of remand.

Summary

Issues:
Challenge to impugned Communication under Foreign Trade (Regulation) Act, 1993 on grounds of natural justice violation.

Analysis:
The writ petition challenges a Communication placing the petitioner firm under the "Denied Entity List" (DEL) under the Foreign Trade (Regulation) Act, 1993. The petitioner alleges a violation of natural justice principles, claiming their objections were not considered, and the order was passed without a fair hearing. They argue that imports were made during a stay order on notifications by the Court. The respondents contend that there is an alternative remedy available under the Foreign Trade Policy 2015-20 and that the Communication was issued in accordance with law. The impugned Communication was passed under Rule 7 of the Foreign Trade (Regulation) Rules, 1993, which requires reasons to be recorded in writing for any order. However, the Communication did not provide reasons, leading to a violation of natural justice.

The Court notes that the petitioner's objections were not considered in the non-speaking order of the impugned Communication. Rule 7 mandates providing reasons for placing an entity under the "Denied Entity List" (DEL). As reasons were not given, the Court finds a violation of natural justice by the respondents. The Court orders the impugned Communication to be quashed and remanded to the respondents for fresh consideration with a fair hearing. The Court clarifies that it does not express any view on the merits of the case, leaving it to the petitioner to present all contentions before the respondents. The respondents are directed to pass final orders within four weeks, affording the petitioner a fair hearing, including the right to a personal hearing.

In conclusion, the Court quashes the impugned Communication and remands the matter for fresh consideration by the respondents. The respondents are instructed to decide on the matter in accordance with law, granting a fair hearing to the petitioner within a specified timeframe. No costs are awarded, and the writ petition is disposed of, with the connected miscellaneous petition closed.