Delhi HC quashes customs order for natural justice violation after undelivered show cause notice under Section 153

Delhi HC set aside customs order dated 10th November, 2022 for violation of natural justice principles as petitioner did not receive show cause notice. Court noted that under Section 153 of Customs Act, notices can be served via registered post, speed post, courier, or email, and also through common portal from 2021. Despite notices being sent under Section 153(b) and displayed on customs board, all were returned undelivered without address change. Given petitioner's claim of realizing full foreign exchange amount from shipping bills, court directed fresh show cause notice be served via email to petitioner and counsel within one week, allowing opportunity for reply and hearing.

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Issues:
Challenge to impugned Order-in-Original dated 10th November, 2022. Service of Show Cause Notice and hearing notices. Compliance with Customs Act regarding notice service.

Analysis:
The Petitioner, an exporter of readymade garments, challenged an Order-in-Original dated 10th November, 2022, alleging a violation of Customs Act and Duty Drawback Rules. The Petitioner contended that the Show Cause Notice was not received, and no opportunity for a hearing was provided. The Respondent argued that the duty drawback should be realized within the prescribed period, and extensions were not sought by the Petitioner. The Court observed a lack of service of notices to the Petitioner, hindering their right to respond. The Court highlighted the importance of proper notice service under Section 153 of the Customs Act.

The Court noted discrepancies in the service of notices, emphasizing the need for email communication in addition to traditional methods. The impugned Order-in-Original was set aside, and a fresh show cause notice was ordered to be served via email to the Petitioner and their counsel. The Petitioner was granted an opportunity to respond and be heard within a specified timeline. The Court directed future compliance with email service for effective communication with parties to avoid ex-parte proceedings.

In a subsequent corrigendum, the Court clarified the reference to the "common portal" as the "Customs Department's common portal" instead of the Directorate General of Foreign Trade's portal. This correction ensured accurate communication of the directive regarding notice service methods. The Court's emphasis on proper notice service through email and common portals aimed to prevent delays and ensure fair proceedings in customs matters.

The judgment highlighted the significance of notice service in legal proceedings, particularly in customs cases, to uphold the principles of natural justice and fair hearing. The Court's decision to set aside the impugned order and mandate email service for future notices underscored the importance of effective communication methods in legal processes. The corrigendum further clarified the portal reference, ensuring accurate implementation of the Court's directive for proper notice service in customs matters.

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