2021 (8) TMI 549 - HC - Customs

Court upholds importance of exhausting appellate remedies before seeking judicial intervention

The High Court dismissed the writ petition challenging the Order-in-Original, emphasizing the importance of exhausting the appellate remedy under Section ... Principles of natural justice - appeal to Commissioner (Appeals) under Section 128 of the Customs Act, 1962 - powers of Commissioner (Appeals) under Section 128A(3) to remit, modify or set aside orders - exhaustion of statutory remedies - maintainability of writ petition under Article 226 where an efficacious statutory remedy existsAppeal to Commissioner (Appeals) under Section 128 of the Customs Act, 1962 - powers of Commissioner (Appeals) under Section 128A(3) to remit, modify or set aside orders - Scope and efficacy of the statutory appeal route to the Commissioner (Appeals) and the powers available to the appellate authority. - HELD THAT: - The Court examined Section 128 and Section 128A of the Customs Act, 1962 and held that the Commissioner (Appeals) is empowered to entertain appeals within sixty days, to grant hearing, to allow grounds not originally taken if omission was not wilful or unreasonable, and under sub-section (3) to make inquiries and pass such orders as just and proper, including confirming, modifying, annulling or remitting the matter for fresh adjudication where principles of natural justice were not followed. The appellate forum therefore possesses ample and specific powers to address factual and legal contentions, to remit matters for fresh consideration, and to cure defects arising from non-compliance with principles of natural justice. [Paras 7, 8, 9, 10, 13]The statutory appeal to the Commissioner (Appeals) is efficacious and capable of dealing with violations of natural justice and other grounds, including by remand or appropriate orders under Section 128A(3).Exhaustion of statutory remedies - maintainability of writ petition under Article 226 where an efficacious statutory remedy exists - Whether a writ petition under Article 226 should be entertained without first exhausting the statutory appeal provided under the Customs Act. - HELD THAT: - The Court observed that where the statute provides an efficacious remedy capable of dealing with the controversy-including addressing breach of natural justice-the High Court should not permit circumvention of that remedy by entertaining writ petitions filed prior to exhausting the appellate remedy. The practice of approaching the High Court to prolong or thwart statutory procedures is deprecated. Given the comprehensive powers vested in the Commissioner (Appeals), the petitioner's remedy under Section 128 must be exhausted before seeking relief under Article 226. [Paras 6, 11, 12, 14, 15]Writ petition is not maintainable without first availing the statutory appeal; the petitioner must exhaust the remedy under Section 128.Principles of natural justice - Whether the High Court should adjudicate disputed factual findings alleged by the petitioner to constitute violation of natural justice in the order-in-original. - HELD THAT: - The Court declined to conduct an original adjudication on disputed factual findings recorded by the adjudicating authority. Determinations requiring scrutiny of original records, documents and evidence cannot be resolved by the High Court in the writ petition; such factual disputes are to be adjudicated by the competent appellate authority or by the authority having prima facie jurisdiction to re-examine evidence. The availability of the statutory appellate mechanism further supports relegation of contested factual issues to that forum. [Paras 5, 6]The High Court will not adjudicate disputed factual allegations of breach of natural justice in the writ; such disputes are for the appellate forum to decide.Final Conclusion: The writ petition is dismissed for failure to exhaust the statutory appeal under Section 128; the Commissioner (Appeals) under Sections 128/128A has adequate powers to redress alleged violations of natural justice and to remit or modify the order, and contested factual disputes must be agitated before the statutory appellate authority. No costs. Issues:1. Challenge to Order-in-Original dated 17.03.2021.2. Violation of principles of natural justice in passing the impugned order.3. Dispute regarding opportunities given for personal hearing.4. Adjudication of factual correctness by the original authority.5. Failure to exhaust appellate remedy under Section 128 of the Customs Act, 1962.6. Scope of Section 128 and appellate procedures under the Act.7. Empowerment of the Commissioner (Appeals) under Section 128A.8. Filing of writ petitions based on violation of principles of natural justice.9. Efficacy of the appellate remedy provided under the statute.10. Encouragement of filing writ petitions before exhausting statutory remedies.Analysis:The High Court of Madras considered a writ petition challenging the Order-in-Original dated 17.03.2021. The petitioner contended a violation of natural justice principles as the impugned order was passed without granting sufficient opportunity. The respondents argued that multiple opportunities were provided for personal hearings, which the petitioner failed to attend. The Court noted that factual disputes should be adjudicated by the competent appellate authority and emphasized the importance of exhausting the appellate remedy before approaching the High Court.The Court delved into the scope of Section 128 of the Customs Act, 1962, which allows appeals to the Commissioner (Appeals) against decisions or orders by lower Customs officers. It highlighted the procedures under Section 128A, empowering the Commissioner (Appeals) to consider additional grounds not initially specified. The Court emphasized the Commissioner's authority to remand matters for fresh adjudication, including cases of natural justice violations.Furthermore, the judgment emphasized the efficacy of the appellate remedy provided under the Act, stating that the Commissioner (Appeals) has ample powers to address various circumstances, including violations of natural justice. The Court expressed concern over the increasing trend of filing writ petitions based on natural justice violations without exhausting statutory remedies, discouraging such practices and emphasizing the importance of following the appeal provisions under Chapter XV of the Act.Ultimately, the Court dismissed the writ petition, emphasizing the need for the petitioner to exhaust the appellate remedy as prescribed under the Act before seeking judicial intervention. The judgment highlighted that the statutory remedy provided is comprehensive and should be utilized before resorting to writ petitions on grounds such as violation of natural justice.