Case Note & Summary
The petitioner, Shri Bipin Badani, filed a writ petition under Article 226 of the Constitution of India before the Bombay High Court challenging the order-in-original dated 6 June 2017 passed by the Commissioner of Customs, Pune. The background of the case involves a show cause notice dated 29 March 2000 issued to the petitioner demanding differential customs duty of Rs.2,45,83,219/- under Section 28 of the Customs Act, 1962. The petitioner had invoked the jurisdiction of the Settlement Commission, which initially admitted the application on 20 February 2001 but later rejected it on 17 October 2003 on the ground of lack of jurisdiction. The petitioner challenged this rejection before the Bombay High Court in Writ Petition No.2 of 2004, which was disposed of on 21 July 2005, remitting the case to the Settlement Commission with the observation that it had jurisdiction. The Revenue appealed to the Supreme Court, which dismissed the appeal on 19 August 2015, upholding the High Court's order. Thereafter, the Settlement Commission passed an order on 31 March 2016 rejecting the petitioner's application on merits. The petitioner then filed a writ petition before the Bombay High Court challenging the Settlement Commission's order, which was disposed of on 20 June 2016, directing the Commissioner of Customs to decide the show cause notice afresh. Pursuant to this direction, the Commissioner of Customs passed the impugned order-in-original dated 6 June 2017. The main legal issue before the High Court was whether the impugned order was vitiated due to breach of principles of natural justice, specifically the denial of opportunity to cross-examine the persons whose statements were recorded during investigation. The petitioner argued that under Section 138B of the Customs Act, such statements are admissible only if the person making the statement is tendered for cross-examination, and since no such opportunity was given, the order is unsustainable. The respondents raised a preliminary objection that the petitioner had an alternative remedy of appeal under Section 129A of the Customs Act before CESTAT. The court, after considering the rival submissions, held that the breach of natural justice is a well-recognized exception to the rule of alternative remedy, and therefore, the writ petition was maintainable. On merits, the court found that the petitioner was indeed denied the opportunity to cross-examine the persons whose statements were relied upon, which is a fundamental flaw. Consequently, the court quashed and set aside the order-in-original dated 6 June 2017 and remitted the matter back to the Commissioner of Customs for fresh adjudication, after providing the petitioner a reasonable opportunity of being heard, including the opportunity to cross-examine the persons whose statements are sought to be relied upon.
Headnote
A) Customs Law - Principles of Natural Justice - Right to Cross-Examination - Section 138B, Customs Act, 1962 - The petitioner was denied the opportunity to cross-examine persons whose statements were recorded during investigation, which is a fundamental breach of natural justice. The court held that such denial vitiates the proceedings and the order-in-original is liable to be quashed. (Paras 1-20) B) Customs Law - Alternative Remedy - Section 129A, Customs Act, 1962 - The objection that the petitioner has an alternative remedy of appeal before CESTAT is not sustainable when the impugned order suffers from a breach of principles of natural justice. The court held that in such cases, the writ court can entertain the petition. (Paras 2-20)
Issue of Consideration
Whether the impugned order-in-original passed by the Commissioner of Customs is liable to be quashed on the ground of breach of principles of natural justice as the petitioner was not provided an opportunity to cross-examine the persons whose statements were recorded during investigation.
Final Decision
The writ petition is allowed. The order-in-original dated 6 June 2017 passed by the Commissioner of Customs, Pune, is quashed and set aside. The matter is remitted back to the Commissioner of Customs for fresh adjudication, after providing the petitioner a reasonable opportunity of being heard, including the opportunity to cross-examine the persons whose statements are sought to be relied upon.
Law Points
- Principles of natural justice
- Right to cross-examination
- Section 138B Customs Act
- 1962
- Section 129A Customs Act
- Alternative remedy not a bar when breach of natural justice
