2022 (3) TMI 517 - HC - Customs

High Court Quashes Order, Directs Release of Goods: Emphasizes Legal Compliance

The High Court allowed the appeal, quashed the unsustainable order dated 21.1.2022, and directed the immediate release of goods within 48 hours. The Court ... Availability of alternative remedy - Rejection of request for cancellation/withdrawal of ex-bond Bills of Entry - reducing the basic customs duty and the agricultural infrastructure and development cess on crude palm oil - whether the appellant should be directed to avail the alternative remedy or whether the writ Court can exercise jurisdiction despite availability of alternative remedy under the statute? - non-application of mind - violation of principles of natural justice - HELD THAT:- The Hon’ble Supreme Court in several decisions have culled out certain exceptions to the restriction in refusing to entertain a writ petition when alternate remedy has been provided for. Some of the exceptions being that when an order was passed in violation of principles of natural justice; when the order has been passed without application of mind; or where the order suffers from the vice of total lack of jurisdiction etc. If the appellant’s case falls within any one of the exceptional circumstances they need not be relegated to the statutory remedy. In any event the direction issued by the learned writ Court in the earlier writ petition was by directing the fifth respondent to give an opportunity of hearing and pass a speaking order. Opportunity of hearing should be an effective opportunity of hearing and not illusory. There may be several cases where under the pretext of being infected by Covid-19 virus several employees had not reported for duty. There is every likelihood that the Customs Department would also have such cases. That apart, all establishments were functioning with less than 30% staff, public transport system was withdrawn. There was also restriction on plying of private vehicles on road. Therefore, the opportunity granted to the appellant is held to be thoroughly inadequate. Further, it is reiterated that the direction for release of the goods upon compliance of certain conditions can have no impact on the direction issued on the fifth respondent to pass a final order after granting opportunity of hearing to the appellant. The appellant need not be relegated to avail the alternative remedy - the order dated 21.1.2022 impugned in the writ petition is unsustainable in law and in violation of principles of natural justice apart from having passed by misinterpreting the order passed in the earlier writ petition. Therefore, the order dated 21.1.2022 is liable to be set aside. Petition allowed - decided in favor of petitioner. Issues:1. Request for cancellation/withdrawal of ex-bond Bills of Entry.2. Proper consideration of petitioner's application.3. Availability of alternative remedy.4. Compliance with the directions of the writ petition.5. Interpretation of the directions by the fifth respondent.6. Expedited ex parte decision by the fifth respondent.7. Delay in filing appeals by the revenue.8. Adequacy of opportunity of hearing.9. Sustainability of the order dated 21.1.2022.10. Release of goods and issuance of notice for personal hearing.11. Continuation of bank guarantee.Issue 1: Request for cancellation/withdrawal of ex-bond Bills of EntryThe appellant filed a writ petition challenging the rejection of their request for cancellation/withdrawal of 10 ex-bond Bills of Entry. The Government's subsequent notification reducing customs duty prompted the appellant's request, which was initially rejected by the fifth respondent on grounds of inadequacy. Despite subsequent representations, the request remained unfulfilled until the writ petition was disposed of by a Single Judge's order, remanding the matter for fresh consideration.Issue 2: Proper consideration of petitioner's applicationThe Single Judge's order directed the fifth respondent to reconsider the cancellation/withdrawal application, requiring the appellant to deposit 50% of the duty in cash and the rest via bank guarantee for the goods' release. However, the fifth respondent's hasty ex parte decision and misinterpretation of the order's directions led to an unsustainable order dated 21.1.2022, prompting the High Court to set it aside and direct the immediate release of the goods within 48 hours.Issue 3: Availability of alternative remedyThe High Court considered exceptions to the rule of relegating parties to statutory remedies, citing instances such as orders passed in violation of natural justice or without jurisdiction. In this case, the appellant's situation warranted judicial intervention as the fifth respondent's actions were deemed illegal, perverse, and in violation of natural justice principles.Issue 4: Compliance with the directions of the writ petitionThe appellant complied with the conditions set by the Single Judge's order, depositing the required duty and bank guarantee. Despite the fifth respondent's misinterpretation and hasty actions, the appellant fulfilled their obligations, leading the High Court to order the immediate release of the goods.Issue 5: Interpretation of the directions by the fifth respondentThe fifth respondent's misinterpretation of the directions and attempt to render the High Court's order unworkable through expedited actions were deemed illegal and unjustifiable. The High Court emphasized the importance of following court directives and ensuring proper consideration and compliance with legal procedures.Issue 6: Expedited ex parte decision by the fifth respondentThe fifth respondent's hurried ex parte decision, misreading of court directives, and failure to provide adequate opportunity of hearing were criticized by the High Court. The actions taken by the fifth respondent were seen as an attempt to circumvent the court's orders, warranting the setting aside of the unsustainable decision.Issue 7: Delay in filing appeals by the revenueThe High Court noted the revenue's tendency to delay appeals, citing the appellant's genuine difficulty due to their consultant's illness as a valid reason for postponement. The Court emphasized the need for accommodating genuine difficulties unless proven false, highlighting the importance of timely and fair legal proceedings.Issue 8: Adequacy of opportunity of hearingThe High Court found the opportunity of hearing granted to the appellant to be inadequate, especially considering the prevailing circumstances such as the Covid-19 pandemic. The Court stressed the need for effective and meaningful opportunities for parties to present their case, ensuring a fair and just adjudication process.Issue 9: Sustainability of the order dated 21.1.2022The High Court declared the order passed by the fifth respondent on 21.1.2022 as unsustainable in law and in violation of natural justice principles. The Court set aside the order and directed the immediate release of the goods, emphasizing the importance of legal compliance and due process in administrative decisions.Issue 10: Release of goods and issuance of notice for personal hearingThe High Court ordered the release of the goods within 48 hours and directed the fifth respondent to issue a notice for a personal hearing, ensuring the appellant's participation without seeking adjournment. The Court emphasized the need for fair and unbiased proceedings, free from any influence from previous quashed orders.Issue 11: Continuation of bank guaranteeThe High Court instructed the bank guarantee furnished by the appellant to be kept alive until the concerned authority passed an order in line with the Court's directions. The Court concluded by allowing the appeal, quashing the impugned order, and providing clear directives for further proceedings without imposing any costs.