2019 (1) TMI 384 - HC - Customs

Revocation of CHA license - time limitation for issuance of SCN - relevant date of filing Offence report - Maintainability of petition - alternative appellate remedy against the order under Regulation 22(7) of the CHALR 2004 - Held that - Though normally, the writ court would not interfere with the issuance of show cause notice, as per the judgment of the Apex Court in UOI vs. Vicco Laboratories 2007 (11) TMI 21 - SUPREME COURT OF INDIA , where a show cause notice is issued either without jurisdiction or in abuse of process of law, the writ court can interfere with the same. In the present case, perusal of Customs House Agents Licencing Regulations 2004 discloses that Regulation 20(1) of the CHALR 2004 provides for revocation of CHA licence granted to a CHA company after following the procedure prescribed under Regulation 22. Regulation 20(2) r/w 20(3) provides for immediate suspension of licence without following the procedures prescribed under Regulation 22. The proceeding under Regulation 20(1) and Regulation 20(2) are independent of one another by virtue of the non-obstante clause in Regulation 20(2). According to the petitioner, when any action is proposed under Regulation 20(1), then procedures prescribed under clauses (1) to (8) of Regulation 22 has to be necessarily followed and as per Regulation 22(1), the Commissioner of Customs shall issue a notice in writing to the Custom House Agent within 90 days from the date of receipt of offence report. In the present case also, the offence report was dated August 2010 and admittedly, the impugned show cause notice was issued only 18.12.2012 and therefore, there can be no doubt that the said show cause notice was issued well beyond the period of limitation of 90 days as per Regulation 22(1) of CHALR 2004 and therefore, the writ petition is maintainable - petition allowed.

Summary

Issues:
1. Alleged violation of Customs House Agents Licencing Regulations, 2004.
2. Suspension and revocation of CHA license without following due process.
3. Jurisdictional validity of the show cause notice.
4. Alternative appellate remedy against the order.

Issue 1: Alleged violation of Customs House Agents Licencing Regulations, 2004:
The petitioner, a Custom House Agent Licensee, faced allegations of violating Regulations of CHALR, 2004 by signing blank shipping documents, not verifying exporter antecedents, and allowing fraudulent export practices. The respondent charged the petitioner with violating Regulation 13(a), 13(b), 13(f), and 13(o) of CHALR, 2004 based on investigations and reports from CBI regarding exports made by specific companies. The petitioner challenged these allegations and subsequent actions taken against them.

Issue 2: Suspension and revocation of CHA license without following due process:
The Commissioner of Customs, Chennai, prohibited the petitioner from customs-related activities without issuing a show cause notice or granting a personal hearing, leading to the suspension of the CHA license. The petitioner contended that the suspension order was set aside in a previous writ petition, highlighting the lack of due process in the actions taken against them.

Issue 3: Jurisdictional validity of the show cause notice:
The petitioner argued that the impugned show cause notice issued on 18.12.2012 was based on a report from CBI in August 2010, exceeding the 90-day jurisdictional limit for issuing such notices under Regulation 20(1) of CHALR, 2004. Citing the Babu Verghese vs. Bar Council of Kerala case, the petitioner claimed that the notice should have been issued before November 30, 2010, and thus, the notice was liable to be set aside.

Issue 4: Alternative appellate remedy against the order:
The respondent contended that the petitioner had an alternative appellate remedy under Regulation 22(7) of CHALR, 2004, through an appeal before CESTAT, making the present writ petition non-maintainable. However, the court considered the validity of the show cause notice based on procedural grounds and the jurisdictional timeline for issuing such notices.

The court analyzed the provisions of CHALR, 2004, particularly Regulation 22(1), which mandates the issuance of a notice within 90 days from the receipt of an offense report for suspension or revocation of a CHA license. Referring to a previous judgment, the court emphasized the mandatory nature of the 90-day limitation period, stating that failure to issue a show cause notice within this timeframe renders subsequent proceedings unlawful. In this case, the show cause notice was issued well beyond the 90-day limit, making it invalid. Consequently, the court set aside the impugned show cause notice and allowed the writ petition, citing the precedence of law and the clear violation of procedural requirements.