Mohit Minerals Ltd Vs Union of India (Gujarat High Court)
In the case of Mohit Minerals Ltd vs Union of India, the Gujarat High Court delivered a judgment on the principles of natural justice in customs law, specifically regarding the finalization of a provisional duty assessment. The petition, filed by Mohit Minerals Ltd., challenged an ex parte final assessment order and a subsequent demand notice for differential duty and interest, totaling over Rs. 32 lakh.
The core of the dispute originated from an import of steam coal by Mohit Minerals in September 2017. The company filed a Bill of Entry, which was provisionally assessed by the Deputy Commissioner of Customs, Jamnagar, under Section 18 of the Customs Act, 1961. After paying the provisionally assessed duty, the petitioner was allowed to clear the cargo.
Almost two years later, in June 2021, Mohit Minerals discovered through the ICEGATE portal that the provisional assessment had been finalized ex parte back in January 2019, with an additional duty demand. They received a formal demand notice from the customs authorities in July 2021, prompting them to file a writ petition with the Gujarat High Court.
Arguments of the Parties
Petitioner’s Submissions:
Mohit Minerals, represented by advocate S.S. Iyer, argued that the final assessment was carried out without informing the company, thereby violating both the provisions of the Customs Act and the fundamental principles of natural justice. The petitioner contended that as per Section 17(5) of the Customs Act and CBEC Circular No. 17 of 2011, customs authorities were required to issue a show-cause notice and provide a personal hearing to the importer before finalizing a provisional assessment that resulted in a higher duty demand. The absence of a speaking order, which provides reasons for the assessment, was also highlighted as a critical failure. The petitioner argued that without a reasoned order, an appeal would be a futile exercise, rendering the alternative remedy under the law ineffective.
