Facts of the Case

The petitioners, M/s. Goyal Impex and Industries Limited, M/s. Goyal Exports, and M/s. Diamond Mink Blankets Limited, challenged the Order-in-Original dated 28.10.2022 passed by the Principal Commissioner of Customs, Hyderabad, whereby various customs duty demands and penalties were imposed under the Customs Act, 1962.

The petitioners approached the Telangana High Court under Article 226 of the Constitution of India, contending that they had not been provided a reasonable opportunity of personal hearing before the impugned order was passed. Being based in Punjab, they submitted that the notices of personal hearing were served either on the scheduled date of hearing or thereafter, making it impossible for them to attend proceedings at Hyderabad.

 

Issues Involved

  1. Whether the Order-in-Original was passed in violation of the principles of natural justice.
  2. Whether service of personal hearing notices on or after the scheduled hearing date amounts to denial of reasonable opportunity.
  3. Whether the High Court should interfere under Article 226 despite the availability of an appellate remedy under the Customs Act, 1962.

 

Petitioners' Arguments

  • The petitioners contended that they never received effective advance notice of personal hearing.
  • Notices were allegedly served either on the date fixed for hearing or after the hearing had already taken place.
  • Since all petitioners were located in Punjab, it was impossible to appear before the adjudicating authority at Hyderabad without prior notice.
  • Consequently, the adjudication proceedings were conducted in violation of the principles of natural justice.
  • Therefore, the Order-in-Original deserved to be quashed.

 

Respondent's Arguments

The respondent submitted that, according to departmental records, notices of personal hearing had been served upon the petitioners on the date of personal hearing or thereafter.

However, the respondent did not dispute that advance notice enabling effective participation in the proceedings had not been provided.

 

Court Order / Findings

The Telangana High Court held that:

  • The petitioners were admittedly based in Punjab.
  • Service of hearing notices on the date fixed for hearing or thereafter could not be regarded as a reasonable opportunity of hearing.
  • Since the hearing was scheduled to take place at Hyderabad, the petitioners were effectively denied an opportunity to participate.
  • The adjudication proceedings therefore violated the principles of natural justice.
  • The Order-in-Original dated 28.10.2022 was accordingly set aside.
  • The Court directed the petitioners to appear before the Principal Commissioner of Customs on 29.12.2022 at 11:00 A.M., after which the authority was directed to conduct fresh adjudication in accordance with law after granting reasonable opportunity of hearing.
  • The writ petition was disposed of without costs.

 

Important Clarification

This judgment reiterates that:

  • Mere issuance of a notice is not sufficient compliance with the principles of natural justice.
  • The notice must be served sufficiently in advance to enable effective participation.
  • Service of notice on the hearing date or after the hearing date is legally inadequate.
  • Even where an alternative statutory appeal exists, the High Court may exercise writ jurisdiction when there is a clear violation of natural justice.
  • Adjudicating authorities under the Customs Act must ensure meaningful opportunity of hearing before passing adverse orders.

 

Sections Involved

  • Article 226 of the Constitution of India
  • Customs Act, 1962 (Adjudication and penalty provisions involved in the impugned Order-in-Original)
  • Principles of Natural Justice (Audi Alteram Partem)

 

Link to download the order:https://www.mytaxexpert.co.in/uploads/1783931999_193compressed.pdf

 

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