2022 (11) TMI 113 - HC - Customs

Validity of final assessment orders passed by the Customs authorities - it is alleged that the assessment order is passed by the Customs authorities in respect of Bills of Entry submitted by the Petitioner without following the mandatory provisions of the Customs Act, 1962 and the relevant Regulations - violation of principles of natural justice - HELD THAT - The petitioner points out that not only was no hearing afforded to the Petitioner prior to finalizing the assessment but even the letter/order dated 19th September, 2019 does not provide the reasons for determining the short payment of duty. Since there is obvious violation of the principles of natural justice and Regulation 6 (3) of the Regulations, the Court has no hesitation in setting aside the impugned letter/order dated 19th September, 2019 and remanding the matter to the Assistant Commissioner, Dhamra Customs Division, Dhamra for fresh adjudication after giving the Petitioner an opportunity of being heard and by passing a reasoned order. The orders in respect of each of the 36 bills of entry (enclosed as Annexure-5 series to the petition) are likewise set aside and are remanded to the Assistant Commissioner, Dhamra Customs Division for a fresh reasoned decision after hearing the Petitioner. The matter will now be listed before the Assistant Commissioner, Dhamra Customs Division, Dhamra on 19 th December, 2022 on which dated, the authorized representative of the Petitioner will remain present together with a downloaded copy of this order - petition disposed off.

Summary

Issues:
1. Final assessment orders passed by Customs authorities without following mandatory provisions of Customs Act, 1962 and relevant Regulations.
2. Compliance with principles of natural justice and requirement for authority to pass a reasoned order.

Analysis:
1. The High Court addressed the grievance raised in the writ petition regarding the final assessment orders passed by Customs authorities without adhering to the mandatory provisions of the Customs Act, 1962 and relevant Regulations. The petitioner contended that the orders were issued without following the principles of natural justice and lacked a reasoned decision, which is essential for proper adjudication before the Appellate forum.

2. The Court observed that the final assessment orders were issued without compliance with the Customs (Finalization of Provisional Assessment) Regulations, 2018, specifically Regulation 6(3) which mandates passing a speaking order following principles of natural justice when the final assessment differs from the provisional assessment. The petitioner highlighted the lack of reasons provided in the assessment order dated 19th September, 2019, concerning a short payment of duty, emphasizing the necessity for a fair hearing and a reasoned decision.

3. During the hearing, the Senior Standing Counsel for the Department could not dispute the non-compliance with Regulation 6(3) but suggested that the petitioner could seek remedy through an appeal. However, citing the decision in M/s. Zuari Agro Chemicals Ltd. v. Union of India, the petitioner argued that without a reasoned order, pursuing an appeal would be futile. Consequently, due to the evident violation of natural justice principles and the Regulations, the Court set aside the impugned order and remanded the matter for fresh adjudication, emphasizing the importance of hearing the petitioner and issuing reasoned decisions.

4. The Court ordered the matter to be listed before the Assistant Commissioner for fresh adjudication, directing the official to pass final reasoned orders for re-assessment of the Bills of Entry within three months after hearing the petitioner. The writ petition was disposed of with the above directions, ensuring compliance with the principles of natural justice and the requirement for reasoned decisions in the assessment process.