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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SONIA GOKANI, GITA GOPI, JJ.
Aziz Fakirmohamed Sumbhaniya – Petitioner
Versus
Union Of India & Others – Respondents
R/Special Civil Application No. 13091 of 2018 With R/Special Civil Application No. 6936 of 2019 With R/Special Civil Application No. 6938 of 2019 With R/Special Civil Application No. 6937 of 2019 With R/Special Civil Application No. 6939 of 2019
Decided On : 03-02-2023
Customs Act - Violation of Principles of Natural Justice - Section 112, Section 111, Section 108, Section 129E - The court found that the show cause notice issued by the Directorate of Revenue Intelligence (DRI) was invalid as only a specific officer of Customs could issue such a notice. The court also emphasized the violation of principles of natural justice in the adjudication process, including the denial of the right to cross-examine witnesses and the lack of participation by the petitioner. The court allowed the petitioners to approach the appellate authority by furnishing the required pre-deposit and permitted the consideration of attached properties as adequate security.
Fact of the Case:
The petitioner, an Indian citizen working in Dubai, was issued a show cause notice proposing a penalty under section 112 of the Customs Act for his involvement in a gold smuggling case. The petitioner alleged that the notice was served on his wife and that he was not given an opportunity to defend himself. The adjudication process was found to have violated principles of natural justice, including the denial of the right to cross-examine witnesses and the lack of participation by the petitioner.
Finding of the Court:
The court found that the show cause notice issued by the DRI was invalid and emphasized the violation of principles of natural justice in the adjudication process. The court allowed the petitioners to approach the appellate authority by furnishing the required pre-deposit and permitted the consideration of attached properties as adequate security.
Issues: Violation of principles of natural justice, validity of show cause notice, denial of right to cross-examine witnesses, lack of participation by the petitioner
Ratio Decidendi: The court held that the show cause notice issued by the DRI was invalid and emphasized the violation of principles of natural justice in the adjudication process. The court allowed the petitioners to approach the appellate authority by furnishing the required pre-deposit and permitted the consideration of attached properties as adequate security.
Final Decision: The court allowed the petitioners to approach the appellate authority by furnishing the required pre-deposit and permitted the consideration of attached properties as adequate security.
JUDGMENT :
(Sonia Gokani, J.)
1. This group of matters since raise identical questions of law, they are being decided by a common order.
2. The facts are drawn from Special Civil Application No. 13091 of 2018 for the purpose of adjudication.
3. The petitioner herein is an Indian citizen and was working in Dubai since the year 2010 as an Agent for various companies like UNI Globe Tourism, Fardan Tourism LLC and Universal Holidays since the year 2010.
4. A show cause notice came to be issued in relation to the seizure of gold weighing 46.3 kgs being F.No./DRI/AZU/GRU/Gold Bar/INT-12/2014 dated 09.04.2015 2014 on 09.04.2015 by the Additional Directorate General, DRI to various persons including the petitioner proposing to impose personal penalty under section 112 of the Customs Act, 1962. So far as the present petitioner is concerned, on the basis of the statement of various persons, the show cause notice is issued to the petitioner, namely, Shri Juma Khamisa Bhokal, Shri Hasim Tito, Shri Rakesh Karmata, Shri Mobin Amad Sanghar and Shri Abid Mamad Subhania. The show cause notice reveals that Shri Juma Bhokal in coordination with Shri Hasam Tito have initiated the activity of smuggling. Gold which was arranged through one Shri Ghani. Gold would come from Dubai through one Shri Gulam and 46.3 kgs of gold was smuggled through Shri Mobin in a vessel named Al Habibi through Tuna Port and when the petitioner was going along with Shri Bhokal to deliver the gold, they were intercepted by the DRI officers.
5. According to Rakesh Karanta 21.3 kgs of the gold was seized from his hotel room, which was to be supplied to someone in the same hotel. However, before it was delivered, DRI officers seized the same.
6. Shri Juma Bhokal stated that out of the total six consignments of gold smuggled into India, 46.3 kgs of gold was seized at Surendranagar. Out of this, the total quantity of gold of 21.3 kgs was delivered to Shri Ramesh Kalabhai. 24 kgs was to be delivered to Ahmed Miya and one kg of gold was delivered to the petitioner's contact.
7. According to the petitioner from the passport details and the Visa issued by the Dubai Government, it is quite apparent that the petitioner during the period from 2014 to 2016 was staying at Dubai.
8. On 19.04.2016 the petitioner came to India from Dubai. He was initially arrested at New Delhi by the officers of DRI in connection with another case pertaining to Jamnagar. The Court in April, 2016 granted him bail. It is the say of the petitioner that statement under section 108 of the Customs Act, 1962 was recorded, which was never shared with the petitioner and, therefore, he would not be in a position to know about the pending proceedings against him.
9. The Principal Commissioner of Customs passed Order in Original (OIO) being OIO KDL/COMMR/PVRR/123/2016-17 on 31.01.2017, which was ex parte without availing any opportunity of hearing. The petitioner also did not receive a copy of the show cause notice nor any notice for personal hearing. The penalty was imposed by the Principal Commissioner of Customs to the tune of Rs. 1, 27,00,000/-. It is the grievance of the petitioner that additional penalties have been imposed considering further quantities of gold assumed to have been imported in the past. The said quantity was never found to have been brought in India and, therefore, the figure given is on an assumption basis. The petitioner came to know about the imposition of this penalty only after the same had been proposed to be recovered.
10. The petitioner after receiving the copy of the OIO filed an appeal before the appellate Tribunal. The condition of pre-deposit of 7.5% penalty as per the Clause-II of section 129E of the Customs Act has been substituted from 06.08.2014, which is also another grievance made by the petitioner. According to him, the amount equal to 7.5% would come to about Rs.9,52,500/- and t
AI
The judgment emphasizes the importance of adhering to principles of natural justice in adjudication processes and highlights the requirement for a specific officer of Customs to issue show cause noti....
The denial of cross-examination in quasi-judicial proceedings does not inherently violate natural justice, especially when alternative remedies are available.
Failure to adhere to principles of natural justice, including denial of cross-examination and opportunity to present defense evidence, warranted quashing of confiscation order and re-evaluation of th....
Quasi-judicial proceedings require strict adherence to principles of natural justice, including the right to cross-examine witnesses, which was violated in this case, rendering the confiscation order....
The main legal point established in the judgment is the requirement of notice and participation in the proceedings under Section 110(1D) of the Customs Act, based on the principles of natural justice....
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