2021 (9) TMI 1278 - HC - Customs

Principles of natural justice - Smuggling - Gold - proper opportunity to respond to the show cause notice was not provided - extended lock down period up to 31.05.2021 - confiscation - penalty - HELD THAT - In this case, on 30.04.2021, personal hearing notice was given, whereby, a date was fixed as 10.05.2021 at 10.00 a.m. to 5.00 p.m. for personal hearing. It is also to be noted that, the said personal hearing was through video conference. In response to the same, the learned counsel appearing for the petitioners did appear through video conference on 10.05.2021 and, it seems that he had sought further time up to 31.05.2021 to respond to the show cause - Though time was given upto 31.05.2021, that was also accepted on behalf of the petitioners to respond to the show cause notice, they could not make it. The reason for not responding to the show cause notice, on or before 31.05.2021, is obvious that, during the said period, there has been a complete lock down throughout the State, and in this regard, the lock down already imposed had been extended from 24.05.2021 to 31.05.2021. In this case, after the 10.05.2021 notice, that is, record of personal hearing, whereby, the time was given up to 31.05.2021, no further time was given or no extension of time was given to the petitioners to respond and thereafter, the impugned order of confiscation of goods had been passed on 03.08.2021. Therefore, this Court feel that such order can be said to be vitiated, in view of the lock down period, where, the expected time since was not given by the respondents, beyond 31.05.2021. This Court feel that the impugned order can be interfered with only for the limited purpose of remitting the matter to the respondents to give one more chance to the petitioners to respond to the show cause notice and for personal hearing and thereafter, they can proceed to pass final orders - petition allowed by way of remand.

Summary

Issues:
1. Proper opportunity to respond to the show cause notice during lockdown period.
2. Violation of principles of natural justice in issuing confiscation order and penalty.

Analysis:
1. The case involved two Writ Petitions arising from a common incident where customs authorities intercepted a bus and found smuggled gold. The petitioners were given a show cause notice under the Customs Act, 1962, with a personal hearing scheduled via video conference on 10.05.2021. The petitioners sought an extension to respond to the notice until 31.05.2021 due to the lockdown. However, the impugned order of confiscation and penalty was issued on 03.08.2021, leading to a challenge by the petitioners on grounds of inadequate opportunity to respond during the extended lockdown period.

2. The learned Standing Counsel for the respondents argued that sufficient opportunities were provided to the petitioners, and they failed to utilize the time granted for responding to the show cause notice. The Counsel contended that the impugned order was valid and passed following due procedure and principles of natural justice. The Court considered both parties' submissions and the circumstances of the case.

3. The Court noted that the lockdown restrictions severely impacted the petitioners' ability to respond to the show cause notice within the given timeframe. Given the extended lockdown period and the practical challenges faced during the pandemic, the Court found that the petitioners were justified in seeking more time to prepare their response. The Court emphasized the importance of ensuring a fair opportunity for the petitioners to present their case.

4. Consequently, the Court set aside the impugned orders concerning the petitioners and remitted the matter back to the respondents for reconsideration. The respondents were directed to provide a fresh opportunity for a personal hearing and to respond to the show cause notice within two weeks from the date of the Court's order. The petitioners were instructed to appear for the personal hearing and submit their reply with any supporting documents without further delay.

5. The Court clarified that no additional time would be granted beyond the specified personal hearing date for responding to the show cause notice. It was emphasized that if the petitioners failed to participate in the personal hearing or submit their reply, the respondents could proceed with the decision without further delays. The Court concluded the judgment with specific directions for the parties and closed the writ petitions without imposing any costs.