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1996(3) Supreme 92
SUPREME COURT OF INDIA
N.P. Singh and K. Venkataswami, JJ.
Union of India & Anr. -Appellants
versus
M/s. Jesus Sales Corporation -Respondent
Civil Appeal No. 3597 of 1995
Decided on 26-3-1996
Held : When principles of natural justice require an opportunity to be heard before an adverse order is passed on any appeal or application, it does not in all circumstances mean a personal hearing. The requirement is complied with by affording an opportunity to the person concerned to present his case before such quasi-judicial authority who is expected to apply his judicial mind to the issues involved. Of course, if in his own discretion if he requires the appellant or the applicant to be heard because of special facts and circumstances of the case, then certainly it is always open to such authority to decide the appeal or the application only after affording a personal hearing. But any order passed after taking into consideration the points raised in the appeal or the application shall not be held to be invalid merely on the ground that no personal hearing had been afforded. This is all the more important in the context of taxation and revenue matters. When an authority has determined a tax liability or has imposed a penalty, then the requirement that before the appeal is heard such tax or penalty should be deposited cannot be held to be unreasonable. Normal rule is that before filing the appeal or before the appeal is heard, the person concerned should deposit the amount which he has been directed to deposit as a tax or penalty. The non-deposit of such amount itself is an exception which has been incorporated in different Statutes including the one with which are concerned. Second proviso to sub-section (1) of Section 4-M says in clear and unambiguous words that an appeal against an order imposing a penalty shall not be entertained unless the amount of the penalty has been deposited by the appellant. Thereafter the third proviso vests a discretion in such Appellate authority to dispense with such desposit unconditionally or subject to such conditions as it may impose in its discretion taking into consideration the undue hardship which it is likely to cause to the appellant. As such it can be said that the statutory requirement is that before an appeal is entertained, the amount of penalty has to be deposited by the appellant; an order dispensing with such deposit shall amount to an exception to the said requirement of deposit. In this background, it is difficult to hold that if the Appellate authority has rejected the prayer of the appellant to dispense with the deposit unconditionally or has dispensed with such deposit subject to some conditions without hearing the appellant, on perusal of the petition filed on behalf of the appellant for the said purpose, the order itself is vitiated and liable to be quashed being violative of principles of natural justice. (Para 5)
JUDGMENT
N.P. Singh, J.-This appeal has been filed on behalf of the Union of India against the judgment of a Full Bench of Delhi High Court holding that an oral hearing had to be given to the respondent by the Appellate authority before taking a decision under third proviso to sub-section (1) of Section 4-M of the Imports and Exports (Control) Act, 1947 (hereinafter referred to as the Act ). On the aforesaid finding the writ petition filed on behalf of the respondent was allowed and the order passed by the Appellate authority was quashed. A direction was given to afford an opportunity to the said respondent to be heard on the question as to whether the appeal filed on behalf of the respondent should be entertained without deposit of the penalty imposed.
2. The respondent obtained an advanced licence for import of brass scrap on certain conditions, under the Duty Exemption Scheme. The said licence was issued subject to the respondent s exporting 78 MT Brass Artware for approximate FOB value of Rs. 14,00,420. A show cause notice was issued to the respondent under Section 4-M of the said Act on basis of the report of investigation. Ultimately a penalty of Rs. 6 lakhs was imposed against the said respondent. An appeal was filed on behalf of the respondent along with an application for dispensing with the pre-deposit. By a communication dated 18.2.1993 issued on behalf of the Appellate authority, the respondent was directed to deposit 25% of the penalty amount or bank guarantee for the same amount. The validity of this communication was questioned before the High Court saying that before rejecting the prayer made on behalf of the respondent to dispense with the whole amount of penalty an opportunity should have been given to the said respondent of being heard in terms of the proviso to Section 4-M of the Act. Section 4-M of the Act provides :
"(1) Any person aggrieved by any decision or order made under this Act may prefer an appeal, -
(a) where the decision or order has been made by the Chief Controller or Additional Chief Controller, to the Central Government;
(b) where the decision or order has been made by any officer below the rank of the Additional Chief Controller, to the Chief Controller or where he so directs, to the Additional Chief Controller,
within a period of forty-five days from the date on which the order is served on such person :
Provided that the Appellate authority may, if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal within the aforesaid period of forty-five days, allow such appeal to be preferred within a further period of forty-five days :
Provided further that in the case of an appeal against an order imposing a penalty, no such appeal shall be entertained unless the amount of the penalty has been deposited by the appellant :
Provided also that, where the Appellate authority is of opinion that the deposit to be made will cause undue hardship to the appellant, it may, at its discretion, dispense with such deposit either unconditionally or subject to such conditions as it may impose.
(2) The Appellate authority may; after giving to the appellant a reasonable opportunity of being heard, if he so desires, and after making such further inquiries, if any, as it may consider necessary, pass such orders as it thinks fit, confirming, modifying or reversing the decision or order appealed against, or may send back the case, with such directions as it may think fit, for a fresh adjudication or decision, as the case may be, after taking additional evidence, if necessary :
Provided that an order enhancing or imposing a penalty or confiscating goods or materials of a greater value shall not be made under this section unless the appellant has had an opportunity of making a representation, and, if he so desires, of being heard in his defence."
In view of the aforesaid Section any person aggrieved by any decision or order made under the said Act may pref
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