2007 (5) TMI 531 - HC - Customs

High Court quashes IEC suspension order, emphasizes procedural fairness

The High Court set aside the impugned order suspending the Importer-Exporter Code Number (IEC) under the Foreign Trade (Development and Regulation) Act, ... Stay order - Compliance with Issues involved: The issues involved in this case are the suspension of Importer-Exporter Code Number (IEC) u/s 8(1)(a) of the Foreign Trade (Development and Regulation) Act, 1992, based on alleged violations of the Customs Act, 1962 and the Foreign Trade Policy. The petitioner challenges the interim order passed by the Director General of Foreign Trade, Ministry of Commerce and Industry, Government of India, New Delhi, citing various infirmities in the order.Details of the Judgment:1. Incorrect Section in Show Cause Notice: The petitioner argued that the impugned order was passed under Section 8(1)(a) of the Act, while the show cause notice was issued under Section 8(1)(b). This discrepancy raised concerns about the legal basis of the order.2. Lack of Specific Allegations: The petitioner contended that the show cause notice did not provide specific details of the alleged fraudulent amendments or violations, leaving the petitioner unaware of the charges against them. This lack of clarity infringed upon the petitioner's right to a fair hearing.3. Non-disclosure of Report: The petitioner highlighted that the impugned order referenced a report from the Director of Revenue Intelligence, which was not disclosed to the petitioner. The reliance on undisclosed information undermined the petitioner's ability to defend against the allegations.4. Absence of Proper Hearing: The petitioner raised concerns about the lack of a meaningful opportunity for a personal hearing. The petitioner's counsel emphasized that the brief interaction labeled as a hearing was insufficient and did not adhere to principles of natural justice.5. Procedural Violations: The petitioner argued that the timeline provided for responding to the show cause notice was inadequate, and essential documents were not supplied. Moreover, the vague grounds in the notice and the open-ended nature of the suspension order further compounded the procedural irregularities.6. Legal Requirement for Final Order: The petitioner contended that under Section 8(1)(a) of the Act, the suspension order should be final and conclusive, requiring definitive findings of contravention. The petitioner argued that a mere prima facie view should not warrant the suspension of the IEC number.7. Resolution and Compliance with Natural Justice: In response to the petitioner's objections, the respondent's counsel acknowledged the deficiencies and committed to issuing a fresh show cause notice, providing all relevant documents and ensuring a fair opportunity for written representation and personal hearing. The Court deemed this approach as fair and directed compliance with the principles of natural justice under Section 8 of the Act.In conclusion, the High Court set aside the impugned order and instructed the respondents to follow the requirements of natural justice, granting the petitioner a full opportunity to respond to the allegations. The judgment emphasized the importance of procedural fairness and adherence to legal provisions in adjudicative proceedings.