2022 (7) TMI 469 - HC - Customs

Levy of penalty on Customs Broker - non-compliance of the formalities under Regulation 17 by which respondent Commissioner of Customs was required to issue a notice in writing to the Customs Broker within a period of ninety days from the date of the alleged offence - alleged violation of Regulation 10(o) of Customs Brokers Licensing Regulation 2018 - violation of basic principles of natural justice - HELD THAT - Hon ble Supreme Court in the case of UMA NATH PANDEY VERSUS STATE OF UP. 2009 (3) TMI 526 - SUPREME COURT where it was held that Natural justice is essence of fair adjudication and to be ranked as fundamental. Purpose of following principle of natural justice is to prevent miscarriage of justice. Notice and hearing required as per principle of natural justice. The impugned order of imposing of penalty being Annexure P4 to the writ petition is not sustainable in law and the same is accordingly set aside and the matter is remanded back to the respondent Customs Authority to pass a fresh order after giving an opportunity of hearing to the petitioner or its authorized representative - Petition allowed by way of remand.

Summary

Issues:
Challenge to penalty imposed by Customs authority for alleged violation of regulation 10(o) of Customs Brokers Licensing Regulation, 2018 without proper communication and opportunity of hearing.

Analysis:
The petitioner challenged the penalty imposed by the Customs authority for violating Regulation 10(o) of the Customs Brokers Licensing Regulation, 2018, claiming the penalty was not sustainable due to non-compliance with formalities under Regulation 17. The petitioner argued that the action was baseless and violated natural justice principles, emphasizing that penal actions must afford an opportunity for a hearing. Citing a Supreme Court decision, the petitioner highlighted the importance of principles of natural justice in preventing arbitrary procedures by authorities affecting individual rights.

The respondents, represented by Mr. Matiti, contended that the penalty was not penal in nature and did not necessitate a personal hearing for the petitioner. However, the Court, after considering both parties' submissions and the Supreme Court judgment referenced by the petitioner, concluded that the penalty order was not legally sustainable. The Court set aside the penalty order and remanded the matter to the Customs Authority for a fresh decision, directing them to provide an opportunity for a hearing to the petitioner or their authorized representative within four weeks from the date of the order's communication.

In the final judgment, the Court disposed of the writ petition, emphasizing the importance of adhering to principles of natural justice and ensuring a fair hearing before imposing penalties. The decision highlighted the need for procedural fairness and the right to be heard, ultimately leading to the setting aside of the penalty order and a fresh opportunity for the petitioner to present their case before the Customs Authority.