2024 (12) TMI 971 - HC - Customs

Maintainability of petition - exhaustion of alternative remedy - Levy of penalties u/s 114AA of the Customs Act, 1962 - order made without serving SCN - violation of principles of natural justice - HELD THAT - Though this order would be appealable, there is no point in relegating the Petitioners to the alternate remedy because this is a clear case where the impugned Order-In-Original has been made without serving any show cause notice upon the Petitioners Directors. The record shows that the show cause notice dated 08 June 2023 was addressed only to the Company, calling upon the Company to show cause inter alia why no penalty should be imposed on the Company. This notice was not addressed, marked or served on the Petitioners. No opportunity was ever granted to the Petitioners to show any cause or for a hearing before the order, which visits the Petitioners with serious consequences, was made. In a similar circumstance, this Court, in DEVANSHU DESAI VERSUS UNION OF INDIA AND ORS. 2024 (12) TMI 304 - BOMBAY HIGH COURT , quashed the order made against an independent Director without serving any show cause notice. Therefore, on the ground of violation of principles of natural justice and following the order in the case of Devanshu Desai, the impugned Order-In-Original dated 24 November 2023 in so far as it concerns the Petitioners herein, is quashed and set aside - petition allowed.

Summary

The High Court of Bombay quashed an Order-In-Original imposing a penalty of Rs. 20 crores under the Customs Act, 1962 on the Petitioners due to a violation of natural justice principles. The Court clarified that the Respondents can issue a show cause notice and act under the law. The rule was made absolute without any costs order.