1985 (4) TMI 187 - HC - Customs

Summary

Issues involved:
The issues involved in this case include the validity of an import licence obtained by misrepresentation, the cancellation of the said licence, the legality of importing goods under such a licence, compliance with principles of natural justice in cancellation proceedings, and the right to clear imported goods.

Validity of Import Licence Obtained by Misrepresentation:
The petitioner, acting as an agent, imported goods under an import licence obtained by M/s. General Spares Industries Pvt. Ltd. The licence was subsequently cancelled due to alleged misrepresentation by the original licence holder. The respondents contended that the goods were imported under an invalid licence. However, legal precedent, including a Supreme Court decision, establishes that a licence obtained by misrepresentation remains valid until properly cancelled. The court held that the licence in this case was valid at the time of importation.

Cancellation of Import Licence and Compliance with Principles of Natural Justice:
The original import licence was cancelled without notice to the petitioners, leading to a show cause notice alleging contravention of import laws. Subsequent legal proceedings resulted in the cancellation being maintained after due process was followed. However, the petitioners were not granted a hearing as promised by the respondents, raising concerns about procedural fairness.

Legality of Importing Goods under a Questioned Licence:
The petitioners sought clearance of goods imported under the now-cancelled licence. The court ruled that since the goods were imported before the licence cancellation, they were lawfully imported under a valid licence. The court emphasized that a licence remains valid until properly cancelled, even if obtained through misrepresentation.

Right to Clear Imported Goods:
The court granted the petitioners the right to clear the imported goods upon payment of necessary charges, including customs duty and warehousing fees. The respondents were directed to release the goods to the petitioners in accordance with the law.

Conclusion:
The court found in favor of the petitioners, upholding the validity of the import licence at the time of importation and granting them the right to clear the goods. The respondents were directed to release the goods to the petitioners, and the rule was made absolute with costs.