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Judgment
By this Writ Petition under Article 226 of the Constitution of India, the Petitioners a Government of Gujarat undertaking have challenged three communications and under which the Petitioners have been directed to pay certain sums. The demand is arising in the following circumstances.
The Petitioners do not dispute that during the course of the business it imported certain materials and that was during the years 2005-2006, 2006-2007, 2007-2008. The Bills of Entry were filed with the Department of Customs and the case of the Petitioners is that it paid the customs duty at the prevailing rates and in terms of the provisional assessment. The Bills of Entry were pending for 3 to 5 years. The claim of the Petitioners is that two show cause notices dated 22nd February, 2010 and 4th March, 2010 were issued and on receipt of which a Reply was send by letters at Annexures ''D'' and ''E''.
The Petitioners are complaining that the assessments were finalized during the year December 2010 to January 2011 under special drive carried out as per instructions of the Joint Secretary, Central Board of Excise and Customs, whereunder an order was passed on 13th October, 2010 nominating an Officer. However, the nominated officer did not comply with the principles of natural justice and confirmed the assessment. The Petitioners complain that the differential duty liability of Rs.50 Crores is fastened on the Petitioners. It is in these circumstances that the present Writ Petition is filed and specifically aggrieved by the letters of demand which according to the Petitioners threaten to recover the sums coercively.
Mr. Shah appearing on behalf of the Petitioners reiterated the submissions based on the above facts and particularly that there is complete failure to comply with the principles of natural justice. In these circumstances, he submits that the ordinary remedy of filing an Appeal against the orders would not be efficacious. Even if that remedy is resorted to it would be wholly frustrated if the amounts are recovered forcibly. Therefore, the Writ Petition deserves to be entertained. Reliance is placed upon several orders passed by this Court and which Mr. Shah claims to have been passed in similar circumstances.
On the other hand, Mr. Jetly appearing for the Respondents relies upon the provisions of the Customs Act, 1962 and particularly of Appeals to submit that all the contentions as are raised in the present Petition can be raised, considered and decided therein, Therefore, the Writ Petition be not entertained and dismissed.
After hearing both sides and findings that the Writ Petition is pending in this Court from 25th November, 2013, now, no useful purpose would be served by relegating the Petitioners to a remedy and which may be barred by limitation. In the given facts and circumstances and when there is no denial that the hearing was not given to the Petitioners as is clear from the statements made in Affidavit-in-Reply, that we are inclined to exercise writ jurisdiction.
The tenor of the orders passed by this Court in such matters is that an adjudication is serious exercise and business. It cannot be concluded light heartedly, casually and hastily. Merely because show cause notices have been issued and are pending adjudication would not justify a wholesale clearance of the matters pending adjudication and without complying with the minimum requirement of fairness, equity and justice. The foundation or the basic requirement of rule of law is that no adverse order is passed and visiting the party like the Petitioners with civil consequences, unless their defence is considered and the parties given an opportunity of hearing. In this case, the requirement of oral hearing has admittedly not been complied with. Merely because after the Petitioners responded the matter was pending for 14 months would not justify taking it up suddenly and disposing it of in the above manner. The authority could have fixed a date of hearing and given advance notice of the same to the Petitioners so as to enable the Petitioners to remain present and put forward its case effectively and properly. That has not been admittedly done. We do not see how a notice to recover the money could have been issued unless that was preceded by an order and in terms of the Act. That the proceedings are quasi-judicial and, therefore, a reasoned order was required to be passed is apparent. We do not find any such order and being passed after hearing the Petitioners. In such circumstances, we are of the opinion that the Writ Petition deserves to be entertained. In the peculiar facts of this case and without laying down a general rule or principle, we entertain this Writ Petition and dispose it off by the following order:
i) In the event, the Petitioners deposit a sum of Rs.5 Crores with the Respondents within a period of eight weeks from the date of receipt of a copy of this order, the Petitioners shall be given a personal hearing and thereafter a reasoned order shall be passed and duly communicated to the Petitioners. The opportunity of oral/personal hearing shall be given to the Petitioners after a notice in that behalf is duly send to the Petitioners'' registered office. The Petitioners shall make arrangement and appear at such hearing and thereafter, the authority will pass a reasoned order.
ii) However, this opportunity given to the Petitioners years after the demand was raised cannot be unconditional. Hence, in the event, the amount is deposited and proof thereof is produced only then the direction as aforesaid will come into force. In the event, there is a default committed then, the Petitioners shall not be entitled to any benefit of this order and thereafter the recovery by coercive means can proceed in accordance with law. We clarify that in the light of this opportunity being given and since the Petition is entertained, failure to deposit the money will not mean that the Petitioners can then resort to the statutory remedy of filing an Appeal. It is because the Petitioners are now not inclined to file Appeal and in the light of the admitted facts that we have entertained the Petition and passed the above order. Any default therefore will not mean that the Petitioners can resort to legal proceedings and to delay the recovery.
iii) However, if compliance is made with the above and the amount is deposited, then, the personal hearing shall be given and a reasoned order be passed within a period of 12 weeks from the date the deposit is made.
iv) In order to enable the Petitioners to deposit the sum of Rs.5 Crores, no coercive measures be initiated and if initiated shall not be proceeded with to recover the amount under the letters which are impugned in the Writ Petition for a period of eight weeks.
8 Writ Petition is disposed of accordingly.
Needless to clarify that in the event the compliance is made the adjudication order shall be passed after hearing the Petitioner and on its own merits so also uninfluenced by the order passed in the Writ Petition.
We clarify that we have not expressed any opinion on the merits of the show cause notices. All contentions in relation thereto are kept open.