Case Note & Summary
The petitioners, engaged in import of goods such as rechargeable torches and LED lights, were issued show cause notices by the Directorate of Revenue Intelligence alleging suppression of retail sale price and evasion of customs duty. The Additional Director General, DRI, passed a common order-in-original dated 24 October 2017 confirming the duty demands and imposing penalties under the Customs Act, 1962. Instead of filing an appeal before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) under Section 129A of the Act, the petitioners approached the Bombay High Court under Article 226 of the Constitution, challenging the adjudication order on the ground that it was passed in violation of the principles of natural justice and ignoring the mandate of Section 138B of the Act. They contended that the adjudicating authority failed to first examine the persons whose statements were recorded under Section 108 and form an opinion on admitting them in evidence, and that they were denied an effective opportunity of cross-examination. Alternatively, they sought waiver of the mandatory predeposit requirement under Section 129E for filing the appeal. The respondents opposed the petitions, asserting that adequate opportunities were afforded, that the petitioners’ own conduct showed a lack of serious pursuit of crossexamination, and that the alternate remedy should not be bypassed. The High Court, after considering the rival submissions and the correspondence between the parties, found that the petitioners had been offered an opportunity to cross-examine witnesses on a date fixed, but they failed to appear. The court formed a prima facie view that the complaint was not of total denial of opportunity but of ‘no adequate opportunity’, which would necessitate an indepth inquiry into facts and prejudice, better suited for appellate examination. Relying on precedents, the court held that mere allegation of breach of natural justice is insufficient without proof of resulting prejudice, and that the petitioners had not explained their absence on the crucial date. It also noted that the decisions relied upon by the petitioners in J & K Cigarettes Ltd. and Slotco Steel Products did not persuade it to entertain the writ petitions. The court declined to waive the predeposit condition, observing that the statutory remedy under Sections 129A and 129E must be exhausted. Accordingly, the writ petitions were dismissed, with liberty to file appeals in compliance with the statutory requirements. The judgment reinforces the principle that where an efficacious alternate remedy exists, writ jurisdiction should be exercised sparingly, particularly when factual and technical disputes can be resolved through the appellate mechanism.
Headnote
A) Constitutional Law – Writ Jurisdiction – Alternate Remedy – Constitution of India, Article 226 – Where a statutory appeal under Section 129A of the Customs Act, 1962 is available, the High Court may decline to entertain a writ petition in the absence of exceptional circumstances such as complete violation of natural justice or jurisdictional error – Petitioners failed to appear on the scheduled date for cross-examination and alleged no adequate opportunity rather than no opportunity – Court held that in depth examination of such allegations is better suited for appellate forum – Held: writ petitions dismissed with liberty to file statutory appeal (Paras 4, 5, 9, 14, 18) B) Customs – Procedure – Admission of Statements – Section 138B, Customs Act, 1962 – Alleged non-compliance with Section 138B regarding requirement to examine persons before admitting their statements in evidence – Court did not decide merits of this allegation, leaving it to be raised in the statutory appeal – Held: the appellate tribunal is the appropriate forum to examine such technical and factual issues (Paras 5, 13, 15, 16) C) Customs – Appeals – Pre-deposit – Section 129E, Customs Act, 1962 – Requirement of predeposit of 7.5% of duty demanded for filing an appeal is mandatory – Court declined to waive or reduce the predeposit condition as no exceptional circumstances were made out – Held: petitioners must comply with Section 129E while availing appellate remedy (Paras 4, 6, 7, 18) D) Natural Justice – Principles – Adequate Opportunity – Where petitioners were offered opportunity to cross-examine witnesses but remained absent on the scheduled date, the complaint of no adequate opportunity requires examination of prejudice – Court observed that mere technical breach of natural justice is insufficient; prejudice must be pleaded and proved – Held: such mixed questions of fact and law are appropriately decided in appellate proceedings rather than in writ jurisdiction (Paras 13, 14)
Issue of Consideration
Whether the writ petitions should be entertained under Article 226 of the Constitution of India despite the availability of alternate remedy of appeal under Section 129A of the Customs Act, 1962, and whether the requirement of pre-deposit under Section 129E of the Act should be waived
Final Decision
The writ petitions are dismissed. The court declined to exercise its discretion under Article 226, holding that the petitioners have an alternate and efficacious remedy of appeal under Section 129A of the Customs Act, 1962. The court refrained from making any observations on the merits of the allegations regarding breach of Section 138B or natural justice, leaving those contentions to be raised in the statutory appeal. The alternative prayer for waiver of pre-deposit under Section 129E was also rejected. The petitioners were directed to avail the appellate remedy in accordance with law.
Law Points
- availability of alternate remedy is not an absolute bar under Article 226 but court may decline to exercise jurisdiction in absence of exceptional circumstances
- mandatory pre-deposit under Section 129E for filing an appeal
- allegation of breach of natural justice requires pleading and proof of prejudice
- examination of adequacy of opportunity is better undertaken by appellate authority
