Court sets aside Customs Act order due to lack of notice, emphasizes direct service methods

The court found in favor of the petitioner, setting aside the impugned order issued under the Customs Act, 1962, due to the absence of a pre-assessment notice or show cause notice. The court emphasized the importance of exhausting direct methods of service, such as registered post or personal delivery, before resorting to indirect methods like publication or affixture. The lack of proof of receipt for the show cause notice sent via Registered Post Acknowledgement Due (RPAD) led to the conclusion that the order was passed in violation of the principles of natural justice. The Writ Petition was allowed, with no costs awarded.

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Issues: Lack of pre-assessment notice or show cause notice

In this case, the main issue revolves around the absence of a pre-assessment notice or show cause notice before the order of assessment dated 26.09.2020, issued under the Customs Act, 1962. The petitioner challenges the validity of the order on the grounds that it was not preceded by the necessary notices.

Analysis:

The impugned order mentioned a show cause notice issued to the petitioner, although no specific date was provided for this notice. The respondent claimed that the petitioner did not respond to this notice, and subsequently, a public notice was issued by the Commissioner of Customs for a personal hearing scheduled between 6th and 18th of July, 2020. The petitioner's lack of response led to the issuance of the impugned order. The revenue argued that this procedure fulfilled the principles of natural justice.

In response, the respondent referred to the issuance of a show cause notice on 21.01.2020, sent by registered post, but acknowledged the absence of a receipt for the same. The provisions of Section 153 of the Customs Act were highlighted, emphasizing the various modes of service for orders, decisions, notices, or communications under the Act. While service by affixture is a prescribed method, it should only be used if direct methods of service, such as registered post or personal delivery, have failed.

The court noted that the Revenue failed to provide proof of receipt for the show cause notice sent via Registered Post Acknowledgement Due (RPAD), indicating a lack of effort in exhausting direct methods of service. The judgment emphasized that indirect methods of service, like publication and affixture, should only be utilized after direct methods have been attempted and proven unsuccessful. Consequently, the court found that the impugned order was passed in violation of the principles of natural justice and set it aside, thereby allowing the Writ Petition. No costs were awarded, and the connected Miscellaneous Petitions were closed.

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