TaxTMI 
TaxTMI 
2015 (5) TMI 406
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....on 9 of the Custom House Agent Licensing Regulations, 1984 (presently Regulation no. 7 of CBLR) while Mr. B.Ravi & Mrs. Rani Mohan are the other partners of the petitioner firm. The petitioner had employed over 15 personnels under them and they have a good reputation and goodwill in the market and have been very meticulous in complying with the customs procedures and requirements in transacting business with the customs. However, their customs license came to be suspended by the respondent herein vide her order dated 31.07.14 for having acted as a CHA for the import clearance made in the name of (1) M/s. Kawarlal & Co., and (2) D.K.Enterprises, both Chennai based importers. The petitioner firm has filed 90 Bills for M/s. Kawarlal & Co., and 51 Bills for M/s D.K.Enterprises at the Air cargo complex at Chennai for the period between January 2008 to September 2009 and all the goods imported by the said companies under the respective Bills of Entry have already been assessed to duty and cleared out of customs charge in strict compliance with the provisions contained in the Customs Act. The bills of entry were filed on behalf of the importer, M/s Kawarlal & Co., and M/s D.K.Enter....
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.... the broker is pending or contemplated as not when no enquiry is pending or contemplated. Therefore, according to the petitioner, the respondent herein had passed the impugned order in excess of the authority conferred on him thereby, the said order is unsustainable in law. It is also stated that the respondent had erroneously came to the conclusion that the petitioner has committed serious violation under the CBLR, 2013, without considering the fact that the Bills of Entry so presented for clearance were properly verified, assessed and out of charge order given by the Customs Act which on the face of the record and hence, the impugned order is liable to set aside. The respondents also exhibited and non application of mind in passing the impugned order on the ground that the continuance of the petitioner to act under the said license would be against the interest of revenue even when the investigation carried out did not result in any loss of government revenue and also when the regulation mandated only an immediate necessity for such suspension which is certainly not supported by the reasoning namely detriment to the revenue. 3. According to the petitioner, a show cause notice da....
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....he offence report filed in this matter without which the suspension ordered is bad in law. The petitioner moved a petition dated 08.09.14 vide M.P.No.2/2014 seeking amendment to the prayer made in the original writ petition No.21782 of 2014 also challenging the further order dated 28.08.14 passed in this matter ordering continued suspension of their license. The petitioner submits that when the said amendment application in M.P.No.2 of 2014 came up for hearing, this Court, while taking note of the fact that the original writ petition had become infructuous consequent to the further order dated 28.08.14 passed by the respondent herein ordering continued suspension, had dismissed the said writ petition with liberty to the petitioner to challenge the order dated 08.10.2014. 5. It is also stated that pursuant to the continued order of suspension dated 28.08.2014, the respondent issued a show cause notice dated 08.09.2014 under Sub-Regulation 1 of Regulation 20 of the CBLR, 2013 asking the petitioner/customs broker to show cause to the Inquiry Officer as to why the licence issued to the customs broker should not be revoked and the security deposited by them should not be forfeited or p....
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....o Complex, Meenambakkam, Chennai without obtaining the mandatory Form-10 Licence/Assistant Drug Controller (ADC) clearance without proper import licence issued under the provisions of the Drugs and Cosmetics Act, 1940. During the course of investigation, it also came to light that K.Ramlal Jain is the owner of M/s.D.K.Enterprises and M/s.Kawarlal & Co., who imported similar drugs through ACC, Chennai. On investigation, it was found that the Customs Broker, M/s.Mars Shipping Services, the petitioner herein had filed the Bills of Entry for the clearance of the goods. Hence, the licence of the petitioner was suspended by the respondent on 31.7.2014 and accordingly, order of suspension under Regulation 19 of CLR, 2013 was passed, fixing personal hearing on 12.8.2014, on which date, the petitioner was represented and written submissions were filed. Upon perusing the objections and hearing the petitioner on 28.8.2014, the order of suspension was continued. The entire order was passed based upon factual adjudication of facts and based upon the statement given by various responsible persons. On 8.9.2014, show cause notice was issued under Regulation 20(1) of CBLR, 2013 appointing an enquir....
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.... Drugs and Cosmetic Act and any violation of the same renders the goods liable for action under the Customs Act and therefore the non-compliance is serious as it jeopardizes human lives and therefore, when such is the view of the respondent, again giving finding to the effect that the order of suspension against the petitioner for non-fulfillment of the obligation cast on them under CBLR is proper, is wholly misconceived and self-contradictory and hence, it is liable to be quashed. 11. As regards the impugned show cause notice, dated 8.9.2014, the learned counsel for the petitioner contended that in para 21, the respondent has categorically pre-concluded and pre-determined the issue by mentioning that it was concluded that the Custom broker had failed to fulfill the obligation cast upon them under the regulations mentioned to therein and committed professional misconduct, while acting as custom broker and therefore, once, the respondent has concluded the issue in negative holding that the petitioner had committed professional mis-conduct, thereafter appointing the Enquiry Officer to probe into the matter and conducting the enquiry, would be a nullity and an empty formality. He....
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....portunity of personal hearing to the petitioner and on consideration of the objections filed by the petitioner in detail. It is not the contention of the petitioner that the respondent has no jurisdiction to pass the order or it has been passed in breach of the rules of natural justice. The contention of the learned counsel for the petitioner is that respondent has mechanically passed the said order with a pre-determined mind in a mechanical manner without considering the fact that there was no offence report by the Investigating Agency, which is a statutory requirement in terms of Regulation 20(1) of CBLR, 2013. It is appropriate to extract Regulations 19 and 20(1) of CBLR, 2013, which read as under: Regulation 19. Suspension of licence:- (1) Notwithstanding anything contained in regulation 18, the Commissioner of Customs may, in appropriate cases where immediate action is necessary, suspend the licence of a Customs Broker where an enquiry against such agent is pending or contemplated; (2) Where a licence is suspended undere sub-regulation (1), the Commissioner of Customs shall, within fifteen days from the date of such suspension, give an opportunity of hearing to the Customs ....
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....nly in appropriate cases where immediate action is necessary against the customs broker, the licence of the broker has to be suspended. It is pertinent to note that except the irregularities alleged to have been committed by the petitioner in the year 2008, there were no adverse report against the petitioner that the petitioner has repeatedly involved in such irregularities between 2009 to 2014. On a careful scrutiny of the entire facts and in view of the fact that even the respondent herself initiated the proceedings that too after a lapse of five years and also the fact that the petitioner was allowed to act as a licensed Broker till 2014, I am of the considered that view that in the present case, immediate action is not required so as to invoke the Regulation in order to suspend the licence. Further, in para 19 of the impugned order, the respondent has given reasons for suspending the licence by stating that if the broker is allowed to operate, it will be detrimental to the interest of revenue. This reason, in my opinion, is not justifiable since as already stated above, there were no adverse remarks against the petitioner in between 2009 and 2014 and except the present one, n....
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....w cause notice itself, the respondent has completely made up his mind and reached definite conclusion about the failure of the petitioner to fulfill the obligations cast upon them and also about the professional mis-conduct while acting as a Customs Broker. I find a considerable force in the contention of the learned counsel for the petitioner. In fact, this Court is well aware of the settled legal position that the show cause notice cannot be read hyper-technically, but it is to be read reasonably and that the Writ Court should be slow and circumspect in interfering at the show cause stage, unless it is successfully proved that the Authority issuing the show cause notice is not competent or the show cause notice is outcome of malice and de hors the provisions of law, but in the present case, the emphasized portion contained (cited supra) in the impugned show cause notice, would clearly indicate that the respondent has predetermined the issue. This Court would have appreciated the respondent if she could have added atleast the words, prima facie before the sentence starting it was concluded that the Customs Broker failed to . Therefore, as rightly contended by the learned couns....
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....ohd. Ghulam Ghouse2and Union of India v. Kunisetty Satyanarayana3, but the question herein has to be considered from a different angle viz. when a notice is issued with premeditation, a writ petition would be maintainable. In such an event, even if the court directs the statutory authority to hear the matter afresh, ordinarily such hearing would not yield any fruitful purpose. (See K.I. Shephard v. Union of India4.) It is evident in the instant case that the respondent has clearly made up its mind. It explicitly said so both in the counter-affidavit as also in its purported show-cause notice. 10. The said principle has been followed by this Court in V.C., Banaras Hindu University v. Shrikant5, stating: (SCC p. 60, paras 48-49) 48. The Vice-Chancellor appears to have made up his mind to impose the punishment of dismissal on the respondent herein. A post-decisional hearing given by the High Court was illusory in this case. 49. In K.I. Shephard v. Union of India4this Court held: (SCC p. 449, para 16) It is common experience that once a decision has been taken, there is a tendency to uphold it and a representation may not really yield any fruitful purpose. (See also Shekhar Ghosh ....
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....o be set aside. 8. Accordingly, the writ petition is allowed and the show cause notice is set aside. It is open to the first respondent to issue a fresh show cause notice, keeping the object of issuing show cause notice in mind. Consequently, the connected miscellaneous petition is closed. No costs. 21. Further, it is settled principle of law that a quasi-judicial authority, while acting in exercise of its statutory power must act fairly and must act with an open mind while initiating the show cause proceeding. A show cause notice is meant to give the person proceeded against a reasonable opportunity of making his objection against the proposed charges indicated in the notice. At the stage of show cause notice, the person proceeded against must be told the charges against him so that he can take his defence and prove his innocence. At that stage, the authority issuing the charge sheet/show cause notice, cannot, instead of telling him the charges, confront him with definite conclusions of his alleged guilt. If that is done, as has been done in the present case, the entire proceeding initiated by the show cause notice gets vitiated by unfairness and bias and the subsequent proceed....