Objective of giving show cause notice is not an empty formality: HC

Riddhi Siddhi Collection Vs Union of India and Ors (Bombay High Court)

HC held that The objective of giving show cause notice is not an empty formality. The objective is to make the party aware of the case it has to meet. Thus time is given to respond to the same. The reduction of time as given in the notice, certainly causes prejudice to the party. The conduct of the petitioner in not attending the personal hearing would not absolve the Revenue from giving time of thirty days as stated in the notice, on serving the complete show cause notice on the parties. In these circumstances, there has been failure of principles of natural justice inasmuch as the petitioner has not been given sufficient opportunity to meet the show cause notice. In these circumstances, directing the parties to avail of alternative remedy would be unfair as original proceeding is itself in breach of natural justice.

 In these circumstances, the impugned order dated 13^th July, 2018 is quashed and set aside.

FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT

At the request of the parties, the petition itself is taken up for final disposal at the stage of admission.

2. This Petition, under Article 226 of the Constitution of India, challenges the order dated 13^th July, 2018 passed by the Commissioner of Customs­respondent no.2 under the Customs Act, 1962 ( for sake of brevity “the Act”) . The impugned order dated 13^th July, 2018 has confirmed the show cause notice dated 15^th December, 2016 demanding custom duty under section 28 of the Act. Besides the impugned order dated 13^th July 2018 also imposes penalty and confiscates the imported goods with option to redeem the same on payment of redemption fine under Section 125 of the Act.

3. The grievance of the petitioner is, the impugned order dated 13^th July, 2018 passed by respondent no.2, Commissioner of Customs is an order passed in breach of principals of natural justice. This only for the reason that the show cause notice dated 15^th December, 2016 as served upon the petitioner was incomplete, inasmuch as annexture ‘A’ and ‘B’ to the show cause notice were not annexed nor accompanied with the show cause notice as served upon the petitioner. The petitioner time and again requested for copies of annexture ‘A’ and ‘B’ to the show cause notice as both these annextures were an integral part of the show cause notice as they are statements computing the demand. Annextures ‘A’ and ‘B’ were made available to the petitioner only on 4^th June, 2018 while fixing the personal hearing of the show cause notice dated 15^th December, 2016 on 27^th June 2018 . The petitioner by letter dated 26^th June, 2018 requested the Commissioner to grant four weeks’ time so as to file appropriate reply to the show cause notice dated 15^th December, 2016 and thereafter, fix a personal hearing. Notwithstanding the aforesaid request respondent no.2 confirmed the show cause notice by order dated 13^th July, 2018 without waiting for the petitioner’s reply or even hearing the petitioner. Thus, it is prayed that this Court should in exercise of its extra ordinary jurisdiction entertain the petition.

4 . On the other hand, Mr. Jetly, the learned Counsel appearing for respondent, submits that there is an alternative remedy available under the Act. Thus the petitioners should approach the Appellate Authority under the Act, if they are aggrieved by the impugned order dated 13^th July, 2018 passed by the Commissioner of Customs. It is further submitted that the conduct of the petitioner in not approaching the Commissioner of Customs and obtaining soft copies of Annextures ‘A’ and ‘B’ to the notice itself demonstrates that the conduct was only to somehow delay the proceedings. The fact that the time was given for personal hearing on three occasions but the petitioner chose not to remain present on all three occasions, is further evidence of non­cooperation by the petitioner. Therefore, it is submitted that this Court should not exercise its extraordinary jurisdiction and entertain this petition.

5. We note the fact that the show cause notice dated 15^th December, 2016 has called upon the petitioner to file its reply within a period of 30 days from the receipt of the notice. However, the show cause notice dated 15^th December, 2015 as served upon the petitioner did not have annextures ‘A’ and ‘B’ annexed to it nor did they accompany the notice. It is not disputed that annextures ‘A’ and ‘B’ were sent to the petitioner with the letter dated 30^th May, 2018 and same was received by the petitioner only on 4^th June, 2018.

6. The show cause notice dated 15^th December, 2016, itself, gave the petitioner thirty(30) days time to respond to the notice. In the aforesaid circumstances, it is only after a complete notice is served upon the petitioner that the period of 30 days to file a reply to the notice would commence. In this case, the complete notice was undisputedly received by the petitioner only on 4^th June, 2018 when annextures ‘A’ and ‘B’ were served upon the petitioner. The fact that the petitioner had not personally approached the revenue for soft copies of annextures ‘A’ and ‘B’ to the show cause notice would not in any way detract from the obligation of the Commissioner to serve the complete notice upon the petitioner so as to enable the petit oner to file its reply within 30 days from the receipt of the notic . In the facts of the case, the petitioner had on 26th June, 2018 reque ted the Commissioner to grant further time of four weeks to file eply to the show cause notice. The Commissioner after recor ing the aforesaid facts did not adjourn the hearing and proce ded to decide the issue ex­parte. The Commissioner could have ranted time of four weeks from 4th June, 2018 and given the petit oner time to file the reply upto 4th July, 2018 and thereafter given opportunity of personal hearing to the petitioner.

7. The objective of giving show cause notice is not an empty formality. The objective is to make the party aware of the case it has to meet. Thus time is given to respond to the same. The reduction of time as given in the notice, certainly causes prejudice to the party. The conduct of the petitioner in not attending the personal hearing would not absolve the Revenue from giving time of thirty days as stated in the notice, on serving the complete show cause notice on the parties. In these circumstances, there has been failure of principles of natural justice inasmuch as the petitioner has not been given sufficient opportunity to meet the show cause notice. In these circumstances, directing the parties to avail of alternative remedy would be unfair as original proceeding is itself in breach of natural justice.

8. In these circumstances, the impugned order dated 13^th July, 2018 is quashed and set aside. The show cause notice dated 15^th December, 2016 is restored to the file of Commissioner of Customs, respondent no.2, for fresh disposal in accordance with law. Mr. Prakash Shah, the learned Counsel appearing for the petitioners states that they would file a reply within a period of two weeks from today. Thereafter the Commissioner of Customs would give a personal hearing to the petitioner in respect of to show cause notice dated 15^th December, 2016 and pass an order in accordance with law.

9.  Petition disposed of in above terms.