Court sets aside confiscation order & penalty due to lack of response opportunity in lockdown. Fresh hearing granted.

The Court found that the petitioners were not afforded a proper opportunity to respond to the show cause notice during the extended lockdown period, impacting their ability to present their case adequately. Consequently, the Court set aside the confiscation order and penalty, directing the respondents to reconsider the matter. The petitioners were granted a fresh opportunity for a personal hearing and to respond within two weeks, emphasizing no further extensions would be granted. Failure to comply would allow the respondents to proceed with the decision. The Court closed the writ petitions without imposing costs.

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Issues:
1. Proper opportunity to respond to the show cause notice during lockdown period.
2. Violation of principles of natural justice in issuing confiscation order and penalty.

Analysis:
1. The case involved two Writ Petitions arising from a common incident where customs authorities intercepted a bus and found smuggled gold. The petitioners were given a show cause notice under the Customs Act, 1962, with a personal hearing scheduled via video conference on 10.05.2021. The petitioners sought an extension to respond to the notice until 31.05.2021 due to the lockdown. However, the impugned order of confiscation and penalty was issued on 03.08.2021, leading to a challenge by the petitioners on grounds of inadequate opportunity to respond during the extended lockdown period.

2. The learned Standing Counsel for the respondents argued that sufficient opportunities were provided to the petitioners, and they failed to utilize the time granted for responding to the show cause notice. The Counsel contended that the impugned order was valid and passed following due procedure and principles of natural justice. The Court considered both parties' submissions and the circumstances of the case.

3. The Court noted that the lockdown restrictions severely impacted the petitioners' ability to respond to the show cause notice within the given timeframe. Given the extended lockdown period and the practical challenges faced during the pandemic, the Court found that the petitioners were justified in seeking more time to prepare their response. The Court emphasized the importance of ensuring a fair opportunity for the petitioners to present their case.

4. Consequently, the Court set aside the impugned orders concerning the petitioners and remitted the matter back to the respondents for reconsideration. The respondents were directed to provide a fresh opportunity for a personal hearing and to respond to the show cause notice within two weeks from the date of the Court's order. The petitioners were instructed to appear for the personal hearing and submit their reply with any supporting documents without further delay.

5. The Court clarified that no additional time would be granted beyond the specified personal hearing date for responding to the show cause notice. It was emphasized that if the petitioners failed to participate in the personal hearing or submit their reply, the respondents could proceed with the decision without further delays. The Court concluded the judgment with specific directions for the parties and closed the writ petitions without imposing any costs.

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