2025 (12) TMI 44 - HC - Customs

Writ Against Customs Order Rejected; Petitioner Directed to Appeal Under Section 129, No Proven Natural Justice Prejudice

HC dismissed the customs petition as non-maintainable due to the availability of an effective alternate statutory remedy under Section 129 of the Customs ... Maintainability of petition - availability of alternate and statutory remedy under Section 129 of the Customs Act - Challenge to order made by the Commissioner of Customs, disposing of the adjudication proceedings, inter alia, against the petitione - violation of principles of natural justice - HELD THAT:- In this case, a detailed review would be necessary only to determine whether there is, indeed, a breach of natural justice, as alleged. This would involve an investigation into the disputed issues, including determining prejudice, if any. A mere breach of natural justice or a technical breach of natural justice is not always sufficient for the grant of final relief; attendant prejudice must be pleaded and established. In the case of Oberoi Construction Ltd Vs. Union of India [2024 (11) TMI 588 - BOMBAY HIGH COURT]., and other connected matters, we have considered the law on the issue of exhaustion of alternate remedies, wherein, we have referred to several precedents from the Hon’ble Supreme Court on this issue. Relying upon reasoning in the said decision and the precedents referred to therein, it is declined to entertain this petition, leaving it open to the petitioner to avail of the alternate statutory remedy. Reference made to a recent decision of the Hon’ble Supreme Court in the case of Rikhab Chand Jain Vs. Union of India and Ors [2025 (11) TMI 1377 - SUPREME COURT] highlighting the importance of exhaustion of alternate remedies and not attempting to bypass them, unless the matter would be traced to some of the well-settled exceptions to this practice. In the present case, it is satisfied that none of the exceptions apply. Therefore, it is proposed not to entertain this petition but to relegate the petitioner to avail of the alternate remedy under the statute. It is declined to entertain this petition - petition dismissed. 1. ISSUES PRESENTED AND CONSIDERED 1.1 Whether the writ jurisdiction should be exercised to interfere with an adjudication order under the Customs Act despite the availability of an alternative statutory remedy of appeal under Section 129, on the ground of alleged breach of principles of natural justice. 1.2 Whether the circumstances of the case warranted protection to the petitioner in relation to limitation for filing an appeal before the Appellate Authority. 2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Writ jurisdiction versus alternative statutory remedy under Section 129 of the Customs Act, in the context of alleged breach of natural justice Interpretation and reasoning 2.1 The Court noted that an appeal lies against the impugned adjudication order under Section 129 of the Customs Act, which constitutes an alternate and statutory remedy. 2.2 The petitioner attempted to avoid the alternate remedy by asserting that it was prevented from leading evidence and that there was a breach of natural justice which, according to the petitioner, could not be cured in appeal. 2.3 During arguments, it was further urged that none of the petitioner's contentions were considered and that the petitioner's defence had been confused with that of other parties, amounting to a gross violation of principles of natural justice and attracting an exception to the rule of exhaustion of alternate remedies. 2.4 The Court perused the impugned order with the assistance of counsel and found it to be detailed. Prima facie, the Court did not accept the allegation that none of the petitioner's contentions had been considered; the order also referred to certain admissions attributed to the petitioner. 2.5 The Court held that, at this stage, it was not required to determine whether such admissions were actually made or to assess the correctness of the Commissioner's view on merits. 2.6 The Court characterised the allegations of breach of natural justice as casually made and held that the assertion that none of the petitioner's defences were considered could not, at least prima facie, be accepted. On such a basis, it would not be proper to depart from the normal rule requiring exhaustion of statutory remedies. 2.7 The Court observed that a detailed review would be necessary even to determine whether there was any breach of natural justice and, if so, whether any prejudice had been caused. It emphasised that a mere or technical breach of natural justice is not always sufficient to grant final relief; prejudice must be pleaded and established. 2.8 The Court relied on its earlier decision in a batch of matters (including one involving Oberoi Construction Ltd.), where the law on exhaustion of alternate remedies, as settled by the Supreme Court, had been considered. Applying that reasoning, the Court held that the petition ought not to be entertained in the face of an efficacious appellate remedy. 2.9 The Court also referred to a recent decision of the Supreme Court highlighting the importance of exhausting alternate remedies and not bypassing them unless well-settled exceptions applied. The Court held that none of the recognised exceptions, including those based on egregious breach of natural justice, were attracted in the present case. Conclusions 2.10 The Court declined to exercise writ jurisdiction and refused to entertain the petition, holding that the petitioner must be relegated to the statutory appellate remedy under Section 129 of the Customs Act. 2.11 The Court clarified that it had not examined the matter on merits and that all contentions of all parties on merits were kept open for consideration by the Appellate Authority. Issue 2: Protection regarding limitation for filing appeal before the Appellate Authority Interpretation and reasoning 2.12 The Court noted that the petition was instituted on 17 March 2025, which was within the period prescribed for filing an appeal against the impugned order. 2.13 Since the petitioner had approached the Court within the appellate limitation period and was now being relegated to the alternate remedy, the Court considered it appropriate to protect the petitioner from any adverse consequence of limitation before the Appellate Authority. Conclusions 2.14 The Court directed that, if the petitioner files an appeal before the Appellate Authority after complying with all prescribed formalities within four weeks from the date of the order, the Appellate Authority shall consider such appeal on its own merits without adverting to the issue of limitation. 2.15 The Court further clarified that any observations in its order are only for deciding whether an extraordinary case existed to deviate from the rule of exhaustion of alternate remedies and shall not influence the Appellate Authority in deciding the appeal on merits.