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2023 Supreme(Del) 2020
IN THE HIGH COURT OF DELHI AT NEW DELHI
Vibhu Bakhru, Amit Mahajan, JJ.
M/s Sun Aviation Pvt. Ltd. – Appellant
Versus
Commissioner of Customs (Export) – Respondent
W.P.(C) 17189 of 2022
Decided On : 07-02-2023
Dr. G. K. Sarkar, Ms. Malabika Sarkar and Mr. Prashant Srivastava, Advocates, for the Petitioner.
Mr. Rajesh Gogna, CGSC with Ms. Priya Singh and Mr. Rahul, Advocates, for the Respondent.
Violation of principles of natural justice and the mode of service of notices under Section 153 of the Customs Act.
Headnote:
Violation of Principles of Natural Justice - Customs Act - Section 114AA, Section 153 - The court discussed the violation of principles of natural justice and the mode of service of notices under Section 153 of the Customs Act. It highlighted the requirements for service of notices and the deeming provisions under Section 153(3) of the Customs Act. The court emphasized that the petitioner was not served with the Show Cause Notice and set aside the impugned order imposing penalty.
Fact of the Case:
The petitioner, an International Air Transport Association (IATA) Agent, challenged an order imposing a penalty under Section 114AA of the Customs Act, alleging violation of principles of natural justice and lack of opportunity to contest the allegations.
Finding of the Court:
The court found merit in the contention that the impugned order was passed in violation of principles of natural justice and set it aside. It clarified that the respondent could issue a Show Cause Notice afresh and pass an appropriate order after affording the petitioner sufficient opportunity to be heard.
Issues: Violation of principles of natural justice, mode of service of notices under Section 153 of the Customs Act, lack of opportunity to contest the allegations.
Ratio Decidendi: The court emphasized the requirements for service of notices under Section 153 of the Customs Act and the deeming provisions under Section 153(3). It held that the petitioner was not served with the Show Cause Notice, leading to a violation of principles of natural justice.
Final Decision: The impugned order imposing penalty on the petitioner was set aside, and the respondent was allowed to issue a Show Cause Notice afresh and pass an appropriate order after affording the petitioner sufficient opportunity to be heard.
JUDGMENT
Vibhu Bakhru, J. The petitioner has filed the present petition impugning an order dated 31.08.2022 (Order-in-Original No.22/JA/JC/ACE/2022 - hereafter `the impugned order') passed by the Joint Commissioner of Customs imposing a penalty of Rs.2,70,00,000/- (Rupees two crore seventy lacs) on the petitioner under Section 114AA of the Customs Act, 1962 (hereafter `the Customs Act').
2. The petitioner is an International Air Transport Association (IATA) Agent and is engaged in booking air freight for exporters and sub-agents through various airlines. The petitioner claims that in the normal course of its business, it receives bookings for air freight from clearing agents (CHAs), sub-agents, importers/exporters and brokers.
3. The petitioner has been penalized in respect of consignments exported by M/s Manisha Enterprises (proprietorship concern of Smt. Manish Garg) under five shipping bills (Shipping Bill Nos. 1128723, 1128800, 1128824, 1128828 and 1128884, all dated 15.04.2021). It is alleged that on an examination, it was found that the exporter was non-existent and the exports under the said Shipping Bills, were to fraudulently avail export benefits.
4. The petitioner claims that it had not received any Show Cause Notice and, therefore, was not afforded sufficient opportunity to contest the allegations against it. It claims that it was not involved in the exports; it had merely booked air freight and therefore, cannot be held responsible for the exports in question.
5. The principal question that falls for consideration of this Court, is whether the principles of natural justice have been violated, and whether the impugned order had been passed without serving a Show Cause Notice, without affording the petitioner sufficient opportunity to respond to the same.
6. The petitioner claims that it had received a notice dated 29.07.2022 fixing a personal hearing on 16.08.2022. The said notice referred to a Show Cause Notice dated 10.05.2022. However, the said notice was not served on the petitioner. Accordingly, the petitioner sent a letter dated 08.08.2022 requesting for a copy of the Show Cause Notice, but received no response to its request. It is stated that the personal hearing before the concerned authority was again fixed on 23.08.2022. However, the petitioner did not receive a copy of the Show Cause Notice. Once again, on 23.08.2022, the petitioner sent a letter requesting the respondent to provide a copy of the Show Cause Notice. However, the same pattern followed; the respondent deferred the personal hearing and fixed the same on 26.08.2022, but did not provide a copy of the Show Cause Notice as requested by the petitioner.
7. The petitioner reiterated its request for a Show Cause Notice again, by its letter dated 26.08.2022 but a copy of the Show Cause Notice was not provided.
8. The respondent has filed the counter affidavit claiming that the Show Cause Notice was served in the petitioner. It claims that the Show Cause notice was issued in the normal course and was served by the modes as stipulated. It is contended that the Show Cause Notice was dispatched by speed post and the tracking website (www.indiapost.gov.in) indicates that the Show Cause Notice was delivered on 17.05.2022. The notice for personal hearing was also dispatched by speed post and the tracking website of Speed Post reflects that the same was delivered on 26.08.2022.
9. Mr. Gogna, learned counsel appearing for the respondent, also relied on the decision of the Supreme Court in N. Parameswaran Unni v. G. Kannan and Anr., (2017) 5 SCC 737 and contended that once a notice is sent by registered post at the correct address, the same deemed to have been served in terms of Section 27 of the General Clauses Act, 1897 and Section 114 of the Indian Evidence Act, 1872. He submitted that in terms of Section 153(3) of the Customs Act, a notice sent by registered post or speed post is deemed to be received by the addressee at the expiry of the period no
