1958 (6) TMI 1 - HC - Customs

Court Invalidates Orders for Violating Natural Justice, Issues Writs of Certiorari & Mandamus

The court found the orders passed by Shri Sattanathan and Shri Banerjee to be invalid due to violations of natural justice principles. The court issued a ... Natural justice Issues Involved:1. Legality of the order passed by Shri Sattanathan dated 15th July, 1954.2. Legality of the order passed by Shri Banerjee dated 6th July, 1954.3. Compliance with natural justice principles.4. Quasi-judicial nature of Customs Authority's adjudication.5. Procedure followed by Customs Authorities in adjudication.Issue-wise Detailed Analysis:1. Legality of the order passed by Shri Sattanathan dated 15th July, 1954:The petitioner challenged the order of confiscation, penalty, and other charges communicated on 15th July, 1954 by Shri Sattanathan, arguing it was not a mere formal transcription of Shri Banerjee's order but an independent order. The court found that the order by Shri Sattanathan was preceded by a judgment with detailed reasoning, considering evidence and arguments, which was not merely a formalization of Shri Banerjee's order. The court declared this order invalid as Shri Sattanathan did not hear the evidence, thus violating the principles of natural justice.2. Legality of the order passed by Shri Banerjee dated 6th July, 1954:The petitioner argued that if the effective order was Shri Banerjee's dated 6th July, 1954, it was invalid because it relied on arguments and evidence considered behind the petitioner's back. The court agreed, noting that Shri Banerjee considered a note from Shri Sawhney and an opinion from Shri Srivastava, which were not disclosed to the petitioner, violating the principles of natural justice. Therefore, the order was also declared invalid.3. Compliance with natural justice principles:The court emphasized that Customs Authorities, acting in a quasi-judicial capacity, must adhere to natural justice principles. This includes hearing evidence and arguments in the presence of both parties and not considering ex parte submissions. The court found that the procedure followed, where notes and opinions were considered without the petitioner's knowledge, was irregular and violated these principles.4. Quasi-judicial nature of Customs Authority's adjudication:The court reaffirmed that Customs Authorities, when making adjudications resulting in confiscations or fines, act as quasi-judicial bodies. This status necessitates adherence to natural justice principles, including the right to a fair hearing and the opportunity to respond to all evidence and arguments presented.5. Procedure followed by Customs Authorities in adjudication:The court criticized the procedure where the prosecution's arguments were presented in a note after the hearing and considered by the adjudicating officer without the petitioner's knowledge. The court stated that such a procedure is unacceptable in quasi-judicial proceedings. The adjudicating officer must consider only the evidence and arguments presented during the hearing in the presence of both parties.Conclusion:The court made the rule absolute, issuing a Writ of Certiorari quashing the orders of Shri A. N. Sattanathan dated 15th July, 1954, and Shri B. N. Banerjee dated 6th July, 1954. A Writ of Mandamus was issued, directing the respondents not to give effect to these orders. The respondents were given the option to re-hear the matter within a month, with the goods remaining in custody but not to be sold or disposed of pending the new hearing. If a new show-cause notice is issued, it must also be within a month. If no notice is issued within this period, the petitioner may take steps for the return of the goods.