Commissioner prohibited customs broker without hearing violating natural justice under Regulation 23 of Customs Brokers Licensing Regulations 2013

The Madras HC upheld a lower court's decision setting aside a prohibition order issued by the Commissioner of Customs under Regulation 23 of the Customs Brokers Licensing Regulations, 2013. The Commissioner had prohibited the respondent from working in customs sections under Chennai Customs Zone without providing an opportunity to be heard, violating principles of natural justice and contravening Regulations 11 and 18. The HC dismissed the appeal and granted liberty to the Commissioner to proceed in accordance with law after providing reasonable opportunity to the affected party.

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Issues Involved:
1. Validity of the prohibition order under Regulation 23 of the Customs Brokers Licensing Regulations, 2013.
2. Requirement of adherence to principles of natural justice.
3. Applicability of precedents from other High Courts.

Issue-wise Detailed Analysis:

1. Validity of the Prohibition Order under Regulation 23:
The Commissioner of Customs, Chennai issued a prohibition order against M/s Daniel & Samuel Logistics Pvt Ltd., under Regulation 23 of the Customs Brokers Licensing Regulations, 2013. This order prohibited the company from working in any section of the Customs Commissionerate and Customs station under the jurisdiction of Chennai Customs Zone. The order was challenged on the grounds that it violated principles of natural justice. The Writ Court quashed the order and remanded the matter back to the respondents for reconsideration after issuing a show-cause notice.

2. Requirement of Adherence to Principles of Natural Justice:
The appellants argued that Regulation 23 does not necessitate a show-cause notice or an enquiry before issuing a prohibition order. They relied on the decision of the Rajasthan High Court in Pinkcity Logistics Ltd. vs. Commissioner of Customs, which held that Regulation 23 does not contemplate a pre-decisional opportunity. However, the Writ Court found that even administrative orders affecting rights must follow principles of natural justice, as established in A.M. Ahamed and Co. vs. Commissioner of Customs and Shipping and Clearing (Agents) Private Limited vs. Union of India.

The court emphasized that natural justice principles should be read into Regulation 23 unless expressly excluded. It noted that the essence of natural justice is to prevent miscarriage of justice, and any adverse order must provide an opportunity for the affected party to be heard. The court cited several precedents, including State of Orissa vs. Binapani Dei and A.K. Kraipak vs. Union of India, to support this view.

3. Applicability of Precedents from Other High Courts:
The appellants contended that the Rajasthan High Court's decision should be binding. However, the court clarified that decisions from other High Courts have persuasive value but are not binding. Each High Court, established under Article 215 of the Constitution of India, has the independent power to decide on legal questions. The court referenced Sunitha Venkatram vs. Ms. Divya Rayapati to assert that it is not bound by decisions from other High Courts.

Conclusion:
The court upheld the Writ Court's decision to quash the prohibition order, emphasizing the necessity of adhering to principles of natural justice. The Commissioner of Customs was granted the liberty to proceed in accordance with the law, after providing a reasonable opportunity to the affected party. The appeal was dismissed, and the court reiterated that natural justice principles must be followed unless explicitly excluded by statute.

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