2014 (9) TMI 521 - HC - Customs

Prohibiting the petitioner from operating as customs broker - invoking Regulation 23 of Customs Brokers Licensing Regulation 2013 - minimum principle of natural justice of affording an opportunity - Held that - even if Regulation 2013 does not provide in express term for providing an opportunity of hearing the cumulative reading of the various Regulations envisage that an opportunity of hearing should be given before such a harsh decision is taken by the authorities. Even a suspension under Regulation 19 has a limited life and therefore this Court feels that the petitioner has made out a prima facie case and the exigency requires an interim order to be passed.

Summary

Issues:
Challenge to Customs Broker's License Prohibition Order under Regulation 23 of Customs Brokers Licensing Regulation, 2013; Invocation of Regulations 11, 18, 19, and 20; Adherence to Principles of Natural Justice; Judicial Review under Article 226 of the Constitution; Non obstante clause in Regulation 23; Opportunity of Hearing Requirement; Interim Order for Suspension of Prohibition Order.

Analysis:
The petitioner contested the Order prohibiting them from operating as a customs broker at specific customs stations, citing Regulation 23 of the Customs Brokers Licensing Regulation, 2013. The petitioner argued that the Order was based on alleged past actions and lacked retrospective applicability without explicit regulatory provisions. The Order invoked misconduct under Regulation 11, with provisions for revocation, suspension, and penalties under Regulations 18, 19, and 20. Notably, Regulation 23 did not include an opportunity for a hearing, contrary to other related regulations.

The petitioner relied on legal precedents emphasizing the importance of natural justice principles before license cancellation or revocation. The court referred to cases like M/s. Raj Restaurant & Another v. Municipal Corporation of Delhi and M.P. State Agro Industries Development Corpn. Ltd. v. Jahan Khan to support the necessity of affording a fair hearing before adverse actions. The court highlighted that natural justice is crucial to prevent miscarriage of justice, citing the judgment in Kesar Enterprises Ltd. v. State of Uttar Pradesh and Others.

In response, the Revenue's advocate argued that the Order referenced both the 2013 and 2004 Regulations, suggesting validity despite the latter's supersession. The non obstante clause in Regulation 23 was highlighted to support the lack of a hearing requirement. However, the court observed that the Order referenced misconduct from both Regulations without providing an opportunity for a personal hearing, as required by Regulation 19 of the 2013 Regulation. The court inferred that while Regulation 2013 did not explicitly mandate a hearing, a holistic reading of related Regulations implied the necessity of a fair hearing before severe decisions.

Consequently, the court granted an interim order suspending the prohibition Order for a specified period, pending further proceedings. The respondents were directed to submit affidavits-in-opposition within a week after the vacation period, with subsequent replies to follow. The case was scheduled for a hearing two weeks after the vacation, emphasizing the need for a fair and comprehensive legal process in the matter.