TaxTMI 
TaxTMI 
2005 (5) TMI 81
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.... 1962 (hereinafter referred to as 'the Act'), there was no purpose of invoking the provisions of Regulation 20(2) of the Act and furthermore the respondents have failed to adhere to the procedure prescribed in Regulation 22 of the said regulations; 4. In any case the order is an arbitrary exercise of power and is liable to be set aside. 2. Having noticed the contentions raised on behalf of the petitioner, we may now refer to the facts giving rise to the present petition. M/s. International Cargo Services is a proprietorship concern and is also a registered custom house clearing agent with the Customs Authorities since 1998 having license number 61 of 1998. Under the terms of the license, petitioner is rendering the services of clearing and presenting documents on behalf of the importers/exporters for clearing import and export of goods with the custom authorities. A temporary licence was issued to the petitioner in the year 1996 and in the year 1998 the petitioner was issued a regular license. It is the case of the petitioner that they have clear and unblemished record and they were never found to be contravening the provisions of the license or the law. Somewhe....
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....terms of these regulations, power is vested in the respondents to revoke and/or suspend the license. In addition, they also have the power under Regulation 21 of the regulations to prohibit the agent from working in one or more sections of the custom station on the event there is violation of the obligations laid down under Regulation 13 of the regulations. It will be appropriate to refer to the provisions which have been invoked by the authorities in passing the impugned order. The relevant Regulations 20, 21 and 22 read as under :- "20. Suspension or revocation of licence. - (1) The Commissioner of Customs may, subject to the provisions of Regulation 22, revoke the licence of a Customs House Agent and order for forfeiture of part or whole of security, or only order forfeiture of part or whole of security, on any of the following grounds, namely :- (a) failure of the Customs House Agent to comply with any of the conditions of the bond executed by him under Regulation 10; (b) failure of the Customs House Agent to comply with any of the provisions of these regulations, within the jurisdiction of the said Commissioner of Customs or anywhere else; (....
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....the correct position. (4) The Customs House Agent shall be entitled to cross-examine the persons examined in support of the grounds forming the basis of the proceedings, and where the Deputy Commissioner of Customs or Assistant Commissioner of Customs declines to examine any person on the grounds that his evidence is not relevant or material, he shall record his reasons in writing for so doing. (5) At the conclusion of the inquiry, the Deputy Commissioner of Customs or Assistant Commissioner of Customs shall prepare a report of the inquiry recording his findings. (6) The Commissioner of Customs shall furnish to the Customs House Agent a copy of the report of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, and shall require the Customs House Agent to submit, within the specified period not being less than sixty days, any representation that he may wish to make against the findings of the Deputy Commissioner of Customs or Assistant Commissioner of Customs. (7) The Commissioner of Customs shall, after considering the report the inquiry and the representation thereon, if any, made by the Customs House Agent, pass such orders ....
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....ations '2004, hereby order suspension of CHA license No. 61/98 of M/s. International Cargo Services with immediate effect. The CHA is directed to surrender all the cards issued to them immediately. 4. This order is issued without prejudice to any other action being taken or proposed to be taken under the Customs Act, 1962 or any other law for the time in being force, against the said CHA; their employee or any other person. (SUMAN NAYAR) COMMISSIONER OF CUSTOMS M/s. International Cargo Services 40, Moti Bagh - II, Near Nanakpura Gurudwara, New Delhi." 6. It is clear from the bare reading of the impugned order that respondents have exercised the powers vested in them under Regulations 20(2) of the regulations. Regulation 22 lays down the procedure which the respondents are required to follow while revoking or suspending the license of an agent. This could be done on the ground and for the reasons which are contemplated under these provisions or terms and conditions of the license. It is the case of the respondents themselves before us that the show cause notice has been issued to the petitioner in relation to an action con....
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....h non-obstante expression 'notwithstanding anything contained in sub-regulation (1)'. Thus, provisions of sub-regulation (2) would take precedence and recourse thereto can be taken despite the pendency of proceedings for revocation of licence. In normal course, the procedure prescribed under Regulation 22 has to be followed by the authorities. In a case where immediate or emergent circumstances do not exist, notice should be issued to the agent, before authorities could pass an order in exercise of their powers under Rule 20(1) or 21. However, this may not be quite true in an emergent situation. Where the authorities are of the considered view that the facts and circumstances disclose sufficient grounds for invoking emergent provisions and it is absolutely essential to suspend the licence of the agent, in public interest, there the authorities may do so without serving a notice on the agent, but at the same time ensuring that post-decisional hearing is granted to the agent and the matter is considered with utmost expeditiousness. The rules of natural justice would have to be read into regulation 20(2) but with the proviso that post-decisional hearing in emergent situation a....
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.... to the principles of natural justice wherever they exercise their powers for revoking and/or suspending a licence in consonance with the provisions of Regulation 20 read with 22. 9. It would be relevant to make a reference to the provisions of Section 146(2) of the Act, under which the board has been empowered to make regulation, but only for the purposes of carrying out the provisions of this Section and under clause (e) of the said section, regulations can be framed, the circumstances in which a licence may be suspended or revoked. This by itself indicates the need to act strictly in accordance with Regulations and ensure that the circumstances spelled out in the regulation are satisfied, before any order adverse to the interest of the agent is passed by the authorities. An exception to a rule cannot be permitted to frustrate the substantive rule itself and must be construed so as to ensure that an exception remains an exception and does not obliterate the rule itself. 10. Natural justice is a procedural requirement of fairness. Those whose duty is to decide, must act justly and fairly. Normally, they should hear the parties by granting them opportunity of adequate represe....
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.... "Where in order to carry on business a licence is required, refusal to give licence or cancellation or revocation of licence would be visited with both civil and pecuniary consequences and as the business cannot be carried on without the licence it would also affect the livelihood of the person. In such a situation before either refusing to renew the licence or cancelling or revoking the same, the minimum principle of natural justice of notice and opportunity to represent one's case is a must. In the present case, no such opportunity was given before taking the decision not to renew the licence. The action disclosing the decision being in violation of the principle of natural justice, deserves to be quashed." 13. Where certain provisions of a statute do not grant pre-order hearing to the effected party, while in some other provisions of the same statute, sub-hearing is specifically provided for. The result would be that prior provisions exclude the application of audi alteram partem by necessary implication. If nothing else, this is certainly a weighty consideration to be taken into account along with civil consequences, which would entail from such action. In the case of....
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....from dual patent infirmities. Despite the fact that the matter was pretty old, no opportunity was granted to the petitioner of being heard and secondly there is no application of mind by the competent authorities. Non-compliance to these essential elements relating to basic rule of law would ex facie vitiate the order. Strange enough the order does not bear the date. However, as stated by the learned Counsel appearing for the respondents the order was issued on 5th January, 2005. Before that the respondents had already invoked the provisions of Regulation 22 as well as Section 124 of the Act and it served the notice to show cause why the action be not taken against the petitioners. This reflects an in-built contradiction in the actions of the respondents. First they issued the show cause notice and waited for number of days before they passed the impugned order which was issued before the period stipulated in the notice had expired. It is true that the show cause notice was issued for a different purpose but this action of the respondents has to be examined from the point of view whether any emergent situation existed at the relevant time when the impugned order was issued or not? ....