2017 (9) TMI 136 - HC - Customs

Principles of Natural justice - Absolute confiscation - gold - the petitioners have an effective alternative remedy by way of an appeal to the Commissioner of Customs (Appeals), Chennai. However the petitioners, without availing such remedy, have approached this Court, challenging the impugned order on the ground of violation of principles of natural justice - Held that - in the communication dated 27.02.2016, the Superintendent of Customs informed the petitioners counsel that they can examine the documents referred to in the show cause notice at the time of personal hearing. This opportunity has not been given though the counsel pointed out that most of the documents requested from the department have not been supplied to them and this seriously hampers the defence of the case - the statement made in counter affidavit is of little worth and it does not substantiate that principles of natural justice have been complied with and thus for the above reasons the impugned order is liable to be set aside for De novo jurisdiction - the impugned order is set aside and the matter is remanded back to the second respondent for fresh consideration - petition allowed by way of remand.

Summary

Issues involved:
Violation of principles of natural justice in an Order-in-Original passed under the Customs Act.

Detailed Analysis:
The petitioners challenged an Order-in-Original issued by the 2nd respondent, which included absolute confiscation of gold bars, penalties under various sections of the Customs Act, and confiscation of material objects. The petitioners did not utilize the alternative remedy of appealing to the Commissioner of Customs (Appeals) before approaching the High Court. The challenge was based on the alleged violation of principles of natural justice, focusing solely on this ground and not the merits of the case.

The petitioners had received a show cause notice in 2015, to which they responded through their counsel, requesting relied upon documents. The Superintendent of Customs provided some documents but did not allow the petitioners to examine all the requested documents before the personal hearing. The petitioners were detained under the COFEPOSA Act, and their detention was challenged separately. The petitioners, through their counsel, requested an adjournment of the personal hearing due to their detention.

The Division Bench had previously found that a copy of the declaration card was not supplied to the detenu despite specific requests, which contradicted the assertion of the second respondent that all relied upon documents were provided during detention under COFEPOSA Act. The High Court held that the petitioners were not permitted to peruse all relied upon documents, as required by principles of natural justice. The Court referred to a Supreme Court decision emphasizing the importance of applying natural justice principles in Customs cases.

The High Court set aside the impugned order, remanding the matter back to the second respondent for fresh consideration. The second respondent was directed to allow the petitioners to peruse all relied upon documents, provide an opportunity for additional objections, conduct a personal hearing, and pass fresh orders on merits. The Court emphasized the need for compliance with principles of natural justice and ordered no costs to be imposed.

In conclusion, the High Court's judgment focused on the violation of principles of natural justice in the Order-in-Original under the Customs Act, leading to the setting aside of the impugned order and a remand for fresh consideration with strict adherence to natural justice principles.