2006 (5) TMI 35 - HC - Customs

Customs - Suspension of Customs House Agent s Licence Interim Order pending investigation or enquiry - as warranted by exigencies of factual situation arising from the CHA s conduct there is no need to follow procedure as prescribed under rule 22. Petitioner may seek appropriate interim order before the appellate authority.

Issues Involved:
1. Suspension of the petitioner's Customs House Agent (CHA) license.
2. Compliance with principles of natural justice.
3. Applicability of Regulations 20 and 22 of the Customs House Agents Licensing Regulations (CHALR), 2004.
4. Availability of alternative remedy by way of appeal.

Issue-wise Detailed Analysis:

1. Suspension of the Petitioner's CHA License:
The petitioner, a partnership firm holding a CHA license under CHALR, 1984, was authorized to operate in Chennai and Coimbatore. The license was suspended by the first respondent on 15-2-2006 under Regulation 20(2) of CHALR, 2004, due to alleged irregularities found during an investigation. The suspension was based on the petitioner's failure to obtain authorization from clients, advise clients on compliance with the Customs Act, exercise due diligence, and maintain control over customs clearance work, thereby contravening Regulations 13(a), 13(d), 13(e), and 19(8) of CHALR, 2004.

2. Compliance with Principles of Natural Justice:
The petitioner challenged the suspension on the grounds that the impugned orders resulted in serious civil consequences and were issued without providing an opportunity to make a representation or explain the allegations. The petitioner argued that under Regulation 20 of CHALR, 2004, the power to suspend a license is subject to the procedure prescribed under Regulation 22, which mandates compliance with principles of natural justice.

3. Applicability of Regulations 20 and 22 of CHALR, 2004:
The court examined whether the procedure for suspending or revoking a license under Regulation 22 applies to actions under Regulation 20(2). It was noted that Regulation 20(2) allows for immediate suspension where necessary, without the need for prior notice or hearing, which is an interim measure pending investigation or inquiry. The court emphasized that if the procedure under Regulation 22 were to be followed before taking action under Regulation 20(2), it would frustrate the purpose of immediate suspension in appropriate cases. Therefore, the court concluded that Regulation 22 does not apply to actions under Regulation 20(2).

4. Availability of Alternative Remedy by Way of Appeal:
The respondent contended that the petitioner had an alternative remedy by way of an appeal under Regulation 22(8) of CHALR, 2004. The court agreed that pre-decisional natural justice is not required for interim orders pending investigation, but a post-decisional opportunity should be provided. The petitioner could either appeal to the Appellate Authority or make a representation to the respondents for review of the suspension order. The court directed that if the petitioner files an appeal or representation within two weeks, the respondents should consider it on merits and provide an opportunity for a hearing. The impugned order would remain suspended until the filing of the appeals.

Conclusion:
The court disposed of the writ petitions, directing that the petitioner could seek a review or file an appeal against the suspension order. If such actions are taken within the stipulated time, the respondents must consider them and provide a hearing. The impugned order would remain suspended until the appeals are filed. The court did not address other contentions on the merits of the case. No costs were awarded, and connected WPMPs were closed.

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