The Patna High Court, while allowing a petition filed by the petitioners aggrieved with the seizure of goods and the adjudication order passed dated 13.03.2015, held that there is a violation of principles of natural justice by reason of the denial of cross-examination of the seizing officer, especially on the contradiction coming out from the seizure memo and the show-cause notice.
Brief Facts:
The seizure was made purportedly for violation of provisions of a notification dated 22.01.1996, issued under Section 11 of the Customs Act. The notification was with respect to import of goods into India from Nepal; goods which have been imported into Nepal from other countries. However, the show-cause notice and the adjudication order proceeded on the basis that there was illegal export attempted by the petitioners. The goods seized were sugar, which was not notified under Section 11 of the Act. Further, the petitioners had specifically sought for cross-examination of the officer who made the seizure, which request though recorded in the adjudication order, was not permitted.
Contentions of the Petitioner:
The Learned Counsel for the Petitioner submitted that the reason for seizure or detention was not the ground on which the adjudication proceedings were initiated; which vitiates the seizure. Section 100 of the Customs Act, 1962 requires ‘reasons to believe’ for making seizure of goods. He argued that when the foundation itself is removed, i.e. the seizure is vitiated, the superstructure falls. If the ‘reason to believe’ is found to be not valid then necessarily there can be no valid seizure or further adjudication on the basis of the invalid seizure.
Contentions of the Respondent:
The Learned Counsel for the Respondent submitted that earlier the petitioners had approached this Court and they were relegated to the statutory authority. There is a statutory remedy of appeal available to the petitioners, which the petitioners have not chosen to avail. He argued that as per the export policy, sugar can be exported by a merchant, importer/exporter only after obtaining an export release order from the Chief Director (Sugar) i.e. through export licensing.
Observations of the Court:
The Court noted that the show-cause notice is for illegal export in violation of the provisions of the Customs Act read with Section 3 of the Foreign Trade (Development and Regulation) Act, 1992 and notification issued thereunder. If an assessee approaches the High Court without availing the alternate remedy, it should be ensured that the assessee has made out a strong case or that there exist good grounds to invoke the extraordinary jurisdiction under Article 226. The High Court can exercise the power if it comes to the conclusion that there has been a breach of principles of natural justice or due procedure required for the decision has not been adopted.
The Court observed that the petitioners had specifically sought for cross-examination of the Inspector of Customs who seized the goods. But there is nothing to show that such cross-examination was permitted. There is a violation of principles of natural justice by reason of the denial of cross-examination of the seizing officer, especially on the contradiction coming out from the seizure memo and the show-cause notice. There is clear lack of jurisdiction in so far as the adjudication proceedings initiated on the ground of ‘illegal export’ when the seizure was on the belief that there is ‘illegal import’.
The decision of the Court:
The Patna High Court, allowing the petition, held that the impugned order is set aside.
Case Title: Raj Kumar Agrawal & Anr. v UOI & Ors.
Coram: Hon’ble Justice K. Vinod Charan and Hon’ble Justice Partha Sarthy
Case no.: Civil Writ Jurisdiction Case No.6377 of 2015
Advocate for the Petitioner: Mr. Prabhat Ranjan
Advocate for the Respondents: Dr. K.N. Singh
Read Judgment @LatestLaws.com
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