2019 (2) TMI 1261 - HC - Customs

Principles of natural justice - non-consideration of the reply dated 17.01.2019, given by the petitioner to the show cause notice dated 17.10.2018 - Section 28 of the Customs Act, 1962 - Validity of SCN - Held that - Only in cases where the show cause notice was issued without jurisdiction, this Court can exercise the power under Article 226 of the Constitution of India - In the instant case, after receipt of the reply from the petitioner, the respondent has fixed a date for personal hearing on 14.02.2019. Whatever defences available to the petitioner, including the additional defence than what was stated in the reply dated 17.01.2019, can be placed during the personal hearing before the respondent also. Ultimately, if the respondent fails to consider the submission of the petitioner in its final order under Section 124 of the Act, the petitioner has got alternate efficacious statutory remedy under the Act to redress his grievance. This Court is of the considered view that the Writ Petition filed by the petitioner is too premature and is devoid of any merits - this Court is inclined to direct the respondent to duly consider the reply dated 17.01.2019 to the show cause notice issued under Section 28 of the Customs Act, in accordance with law by giving the petitioner adequate opportunity during the personal hearing - petition disposed off.

Summary

Issues:
Challenge of non-consideration of reply to show cause notice under Customs Act, 1962.

Analysis:
The Writ Petition was filed challenging the respondent's non-consideration of the petitioner's reply to a show cause notice issued under Section 28 of the Customs Act, 1962. The petitioner contended that according to a proviso introduced to Section 124 of the Act, the authority must consider the reply before calling for a personal hearing. It was argued that the respondent's action of calling for a personal hearing without considering the reply was improper.

The petitioner also raised the issue that a third party, from whom the petitioner had obtained a license, should have been issued a show cause notice as well, which the respondent failed to do in this case. However, the court noted that the petitioner had only challenged the show cause notice and final orders had not been passed by the respondent. It was emphasized that challenging a show cause notice is not permissible under Article 226 of the Constitution unless there is a violation of natural justice principles or lack of jurisdiction.

The court clarified that a show cause notice is a preliminary stage of adjudication and not an order. The discretion to consider the petitioner's representation to the notice before passing final orders under Section 124 of the Act lies with the adjudicating authority. The court highlighted that unless a show cause notice is issued without jurisdiction, it cannot be challenged under Article 226. The petitioner was advised that if the respondent fails to consider their submissions in the final order, statutory remedies like appeal to the Commissioner [Appeals] or Customs Excise and Service Tax Appellate Tribunal are available.

In conclusion, the court found the Writ Petition premature but directed the respondent to consider the petitioner's reply to the show cause notice in accordance with the law during the upcoming personal hearing. The court emphasized that the petitioner's rights are adequately protected under the Act through various statutory remedies to address any grievances. The Writ Petition was disposed of with the mentioned direction, without any costs incurred.