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2018 Supreme(Raj) 271
IN THE HIGH COURT OF RAJASTHAN
K.S. JHAVERI, VIJAY KUMAR VYAS, JJ.
SONI MEDICALS LTD., — Appellant
Vs.
UNION OF INDIA THROUGH COMMISSIONER CUSTOMS NEW DELHI — Respondent
Civil Writ Petition No. 517 of 1998
Decided on : 21-02-2018
For the Appellant :Mr. K.K. Sharma, Senior Counsel with Ms. Alankrita Sharma, Advocate
For the Respondent:Mr. R. D. Rastogi, ASG with Mr. C. S. Sinha, Mr. Anuroop Singhi with Mr. Sourabh Jain, Advocates
Headnote:
CUSTOMS ACT - SHOW CAUSE NOTICE - JURISDICTION - NATURAL JUSTICE - ALTERNATE REMEDY - LIMITATION - [CUSTOMS ACT, 1962] - [ARTICLE 226 OF THE CONSTITUTION OF INDIA] - [ARTICLE 32 OF THE CONSTITUTION OF INDIA] - The High Court quashed the show cause notice issued to the petitioner by the Commissioner of Customs, holding that the petitioner was not given an opportunity to be heard before the issuance of the notice and that the notice was issued without jurisdiction. The Court also held that the petitioner was not required to exhaust the alternate remedy of filing an appeal before the Commissioner of Customs (Appeals) or the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) before approaching the High Court, as the show cause notice was issued without jurisdiction and the petitioner had been waiting for a decision on the show cause notice for over two decades.
Fact of the Case:
The petitioner, a hospital, was issued a show cause notice by the Commissioner of Customs alleging that the petitioner had violated the conditions of a notification issued by the Central Government, which allowed the petitioner to import a medical machine without paying customs duty. The petitioner challenged the show cause notice by filing a writ petition in the High Court, contending that the notice was issued without jurisdiction and that the petitioner was not given an opportunity to be heard before the issuance of the notice.
Finding of the Court:
The High Court held that the show cause notice was issued without jurisdiction and that the petitioner was not given an opportunity to be heard before the issuance of the notice. The Court also held that the petitioner was not required to exhaust the alternate remedy of filing an appeal before the Commissioner of Customs (Appeals) or the CESTAT before approaching the High Court, as the show cause notice was issued without jurisdiction and the petitioner had been waiting for a decision on the show cause notice for over two decades.
Issues: 1. Whether the show cause notice was issued without jurisdiction? 2. Whether the petitioner was given an opportunity to be heard before the issuance of the notice? 3. Whether the petitioner was required to exhaust the alternate remedy of filing an appeal before the Commissioner of Customs (Appeals) or the CESTAT before approaching the High Court?
Ratio Decidendi: 1. The show cause notice was issued without jurisdiction because the Commissioner of Customs did not have the authority to issue the notice. 2. The petitioner was not given an opportunity to be heard before the issuance of the notice, which violated the principles of natural justice. 3. The petitioner was not required to exhaust the alternate remedy of filing an appeal before the Commissioner of Customs (Appeals) or the CESTAT before approaching the High Court, as the show cause notice was issued without jurisdiction and the petitioner had been waiting for a decision on the show cause notice for over two decades.
Final Decision: The High Court quashed the show cause notice issued to the petitioner by the Commissioner of Customs.
K.S.Jhaveri, J
By way of this petition the petitioner has challenged the show cause notice dated 24.1.1998.
2. While considering the case, this Court vide order dated 2th November, 2017 passed the following order:-
"1. By way of these writ petitions, the petitioners have challenged the show cause notice along with the other proceedings by way of Writ Petition No.1439/2001. Time and again the matter was heard on merits. Notice was issued on 28.01.1998 and the following order was passed:-
"It has been submitted by Mr. Sharma, that the Commissioner of Customs has no jurisdiction to investigate in to the matter as to whether the petitioner herein i.e. Soni Hospital is treating the required number of patients as laid-down in the Notification No.64/88 free of costs or not as was the condition laid-down in the said Notification, on the basis of which the petitioner had been granted exemption from paying customs duty for importing "City Scan Machine".
Issue notice to the respondents and be given dasti to the learned counsel for the petitioner.
The petitioner in the mean time is directed to appeal before the Commissioner of Customs and to explain his bonafide seeking exemption. If any final order is passed, that will be made effective until further order by this Court. Put up on 05.02.1998."
2. This Court after hearing both the sides admitted the matter and fixed for hearing on 31.08.2006. However, after almost a decade when the matter has come, counsel for the respondent has raised preliminary objections relying on following decisions that the petitioner is required to be relegated to alternate remedy:
1. Rajasthan State Industrial Development and Investment Corporation and Anr. v. Diamond & Gem Development Corporation Limited and Anr., (2013) 5 SCC 470, wherein it has been observed as under:-
6. The Appellant vide notice dated 4.7.1992, informed the Respondent-company, that as per Clause 2(n) of the lease deed, all construction had to be completed within a stipulated time period of 5 years. The Respondent-company began asking the Appellant to provide it accessibility via road, from the Jaipur Tonk main road and, as the same was provided, the Respondent-company filed Writ Petition No. 5481 of 1994 before the High Court, seeking the issuance of a direction to the Appellant to provide to it, the aforesaid road.
7. During the pendency of the aforesaid writ petition, the Appellant expressing its dis satisfaction with regard to the progress of the development of the said land by the Respondent-company, filed a reply to the said writ petition before the High Court stating that it was under any obligation to provide to the Respondent-company the aforementioned approach road, as the lease deed had been executed between them, on the basis of an "asis-where is" agreement. Further, the Appellant issued a show cause notice dated 29.8.1996, to determine the lease in light of the lease agreement, in lieu of the fact that the Respondent-company had made any progress regarding the completion of the project, and even after the expiry of a period of 5 years, only 10% of the total construction stood completed. In pursuance thereof, the lease deed was cancelled vide order dated 1.10.1996, and possession of the land in dispute was taken back by the Appellant on 3.10.1996.
9. The High Court vide its impugned judgment and order, allowed both the writ petitions quashing the order of cancellation, and directed the restoration of possession of the aforesaid land to the Respondent-company, and further, also directed the Appellant to provide to the Respondent-company, the approach/access road demanded by it.
Hence, these appeals.
13. Before proceeding further, it may be pertinent to refer to the relevant statutory provisions, and certain terms of the lease deed.
13.1 Rule 11-A of the Rules 1959 read:
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Clause (iv) of Rule 11-A.- The Rajasthan State Industrial Development and Investment Corporation Ltd. may sublease the leased land or part thereof for industri
