Natural justice in customs adjudication: confiscation and penalty orders failed where the effective decision-maker had not heard the parties.

Proceedings under the Sea Customs Act were treated as quasi-judicial, so natural justice required a fair hearing before the effective adjudicator and disclosure of material relied on. The confiscation and penalty orders were held unlawful because the Collector who made the effective order had not himself heard the evidence, and because prosecution material and arguments were considered by later note and internal consultation without giving the assessee an opportunity to meet them. The orders were therefore liable to be quashed.

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Issues: Whether the customs confiscation and penalty orders were vitiated because the adjudicating officer who made the effective order had not heard the parties and because prosecuting material and arguments were considered behind the petitioner's back in a quasi-judicial proceeding.

Analysis: The proceeding under the Sea Customs Act was treated as quasi-judicial, so the rules of natural justice applied. The effective adjudication was found to be the later order made by the Collector who had not himself heard the evidence. Independently, the earlier hearing was held to be tainted because the prosecution answered the petitioner's submissions by a later note and internal consultation, without giving the petitioner an opportunity to meet that material. Such a procedure was inconsistent with fair hearing requirements in a quasi-judicial determination.

Conclusion: The confiscation and penalty orders were unlawful and liable to be quashed; the decision was in favour of the assessee.

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