2022 (2) TMI 1082 - HC - Customs

Principles of natural justice - It is the case of the petitioner that the Inquiry Officer neither furnished any documents nor granted any personal hearing - HELD THAT - In this case, the record indicates that since 2009 when the regular inquiry was ordered by the Commissioner, hardly any steps are taken by the respondents to proceed with the regular inquiry ordered by the Commissioner. The petitioner had repeatedly called upon the respondents to produce the documents. Neither any documents were produced till 1st July, 2021 nor any regular date of hearing was conveyed to the petitioner except once. In these circumstances, the petitioner was not expected to preserve the evidence/record intact for such a long period of more than 11 years. We are not inclined to accept the submission made by the learned counsel for the respondents that there was no violation of principles of natural justice. In our view, the inaction on the part of the respondents in not adjudicating upon the show cause notice for a period of 11 years and proposing to pass an order would cause serious prejudice to the petitioner - there is no substance in the submission of the learned counsel for the respondents that no prejudice would be caused to the petitioner, if the inquiry is allowed to be proceeded with at this stage. In view of the gross delay on the part of the respondents, if at this stage the respondents are allowed to proceed with the inquiry, there would be gross injustice to the petitioner. Petition disposed off.

Summary

Issues:
1. Delay in conducting the inquiry against the petitioner.
2. Allegation of violation of principles of natural justice.
3. Prejudice caused to the petitioner due to the delay.
4. Application of legal principles from a similar case.

Analysis:

Issue 1: Delay in conducting the inquiry against the petitioner
The petitioner, holding a Custom House Agent License, faced allegations of illegally sub-letting the license, leading to the suspension of its operations in 2009. Despite orders for an inquiry, the process was marred by delays. The initial Inquiry Officer failed to provide necessary documents or grant a personal hearing. Subsequently, a new Inquiry Officer was appointed, but the inquiry remained stagnant for years. The petitioner, after repeated requests for documents, filed a writ petition in 2021 seeking to quash the proceedings due to the prolonged delay.

Issue 2: Allegation of violation of principles of natural justice
The petitioner argued that the delay in conducting the inquiry amounted to a violation of principles of natural justice. The petitioner's counsel highlighted the failure of the respondents to provide essential documents and the lack of progress in the inquiry process. The petitioner contended that the inaction on the part of the respondents in adjudicating the matter for over 11 years would cause serious prejudice.

Issue 3: Prejudice caused to the petitioner due to the delay
The Court noted that the petitioner had repeatedly requested the necessary documents for over a decade without significant progress in the inquiry. The Court emphasized that expecting the petitioner to maintain evidence for such a prolonged period was unreasonable. The delay in the inquiry process, coupled with the lack of document provision, was deemed prejudicial to the petitioner's interests.

Issue 4: Application of legal principles from a similar case
The Court referred to a previous judgment involving gross delays in adjudicating show cause notices to establish a precedent. Drawing from the legal principles outlined in the prior case, the Court concluded that the gross delay in the present matter warranted quashing the proceedings to prevent injustice to the petitioner. The Court rejected the respondent's argument that allowing the inquiry to proceed at this stage would not prejudice the petitioner, emphasizing the gravity of the delay and its impact on the petitioner's rights.

In conclusion, the Court found in favor of the petitioner, quashing the proceedings and ordering relief in line with the petitioner's prayers, highlighting the significance of timely and fair adjudication in legal processes to uphold the principles of natural justice and prevent undue prejudice to parties involved.