TMI Blog2010 (12) TMI 945X X X X Extracts X X X X X X X X Extracts X X X X ..... earing on 19th March, 2010 when the Petitioner's sales executive Sri G.V.S. Kondala Rao appeared - The Adjudicating Authority granted more than three adjournments and when none appeared on 16th September, 2010, on behalf of the company, the incumbent Commissioner passed the impugned order. Thus it convincing that "reasonable opportunity" was not denied to the Petitioner. Alleged denial of natural justice is not reason enough to bypass the alternative remedy and approach this Court. As it is within the discretion of the High Court whether to exercise the jurisdiction or not. In this case, it is not a case where discretion under Article 226 of Constitution ignoring Section 122A of the Customs Act is to be exercised - writ petition is dismissed - Writ Petition No. 26968 of 2010 - - - Dated:- 30-12-2010 - V.V.S. Rao, Ramesh Ranganathan, JJ. C.R. Sridharan, Adv. for the Appellant/Petitioner/Plaintiff V. Gopala Krishna Gokhale, Adv. Standing Counsel for Customs and Excise for the Respondents/Defendant ORDER V.V.S. Rao, J. 1. The Petitioner is in the business of running duty free shops "Flemingo" at airports and seaports. This writ petition is filed assail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the non-duty paid bonded goods should not be confiscated and as to why penalty should not be imposed besides cancelling the licence. The Petitioner sent reply on 18* October, 2008 denying various allegations. They also sought personal hearing to the adjudication by the Respondent. Another Show Cause Notice dated 19th January, 2009 was issued, this time invoking Section 28(1) of the Act. The Petitioner replied again on 8th October, 2009 duly requesting for personal hearing. 3. Personal hearing was given on 19th March, 2010. But the Petitioner requested for adjournment. It was posted to 12th April, 2010. Subsequently, at their request, it was advanced to 7* April, 2010 and Senior Counsel for the Petitioner appeared and argued before Sri M. Ponnusamy, IRS, the then Commissioner of Customs. On 19th May, 2010, the Commissioner who heard the case on 7th April, 2010 was transferred. Sri P.V.R. Reddy, IRS took charge. The Petitioner alleges that they received notice dated 9th July, 2010 on 12th July, 2010, informing about another round of personal hearing, on 6th August, 2010. The hearing was adjourned to 16th September, 2010 on request of the Petitioner. On that day, the location man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtunity was denied to Petitioner. His submission is that though the Commissioner Sri Ponnusamy heard the matter, the order was passed by the Commissioner Sri P.V.R. Reddy, which itself is illegal. These contentions are refuted by the Senior Standing Counsel for Central Excise and Customs. 7. The question of maintainability of the writ petition, having regard to Section 129A of the Customs Act and the question of violative of principles of natural justice are interconnected. Therefore, both the issues need to be considered together. Articles 226 and 227 of Constitution confer power of judicial review on the High Courts. The power includes issuing writs in the nature of certiorari, habeas corpus, mandamus, prohibition and quo warranto, as well as directions and orders. These are writs, which were issued at the discretion of the King's Courts in England to check excesses in the exercise of power by servants of the kingdom. The issue of writs; nay the exercise of judicial review power is subject to certain limitations, some imposed by the constitution or the statutes and others certain self-imposed limitations. One of these is the existence of alternative remedies. When the power c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned order/action is in breach of natural justice; and (iv) When challenge is to the action which is patently and ex facie without jurisdiction. In Whirlpool Corporation v. Registrar of Trade Marks, Mumbai AIR 1999 SC 22: (1998) 8 SCC, the Supreme Court clarified this position. If a matter requires technical knowledge, which is available in the Statutory Appellate Forum, ordinarily, the High Court would not be inclined to exercise discretion under Article 226 of Constitution of India. These principles are well-settled. Further, in tax matters, ordinarily Courts have declined to exercise writ jurisdiction. In C.A. Abraham v. I.T. Officer AIR 1961 SC 609, the Appellant along with another was partner in M/s. M.P. Thomas and Company engaged in food grains business. The firm submitted Returns to Income Tax Officer (ITO). On the ground that the firm was carrying transactions in fictitious names, and had suppressed income for AY 1948-1949, Show Cause Notice was issued for imposing penalty under Section 28 of Income Tax Act, 1922. Explanation was submitted. ITO passed orders imposing penalty for AYs 1950-1951 and 1951-1952. Appeals were dismissed by the Appellate Authority. The sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant observations are as follows (Para 5). We deem it necessary once more to emphasize that the Income Tax Act provides a complete and self-contained machinery for obtaining relief against improper action taken by the departmental authorities, and normally the party feeling himself aggrieved by such action cannot be permitted to refuse to have recourse to that machinery and to approach the High Court directly against the action. ... A writ of certiorari is discretionary; it is not issued merely because it is lawful to do so. Where the party feeling aggrieved by an order of an Authority under the Income Tax Act has an adequate alternative remedy which he may resort to against the improper action of the authority and he does not avail himself of that remedy the High Court will require a strong case to be made out for entertaining a petition for a writ. Where the aggrieved party has an alternative remedy the High Court would be slow to entertain a petition challenging an order of a taxing authority, which is ex fade with jurisdiction. A petition for a writ of certiorari may lie to the High Court, where the order is on the face of it erroneous or raises question of jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edy provided for under Article 226 of the Constitution. For purposes of this case, it is enough to state that the remedy provided for in Article 226 of the Constitution is a discretionary remedy and the High Court has always the discretion to refuse to grant any writ if it is satisfied that the aggrieved party can have an adequate or suitable relief elsewhere. (Emphasis supplied) 13. In Jai Singh v. Union of India AIR 1977 SC 898, the Supreme Court observed. that, when there are serious questions of disputed facts, this Court need not exercise jurisdiction under Article 226 of the Constitution of India. The following passage from the said judgment needs excerption. The High Court dismissed the writ petition on the ground that it involved determination of disputed questions of fact. It was also observed that the High Court should not in exercise of its extraordinary jurisdiction grant relief to the Appellant when he had an alternative remedy. After hearing Mr. Sobhagmal Jain on behalf of the Appellant, we see no cogent ground to take a view different from that taken by the High Court. There cannot, in our opinion, be any doubt on the point that the extent of purity of the gy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Constitution is a basic feature of the Constitution and cannot be ousted by parliamentary legislation is far too fundamental to be questioned especially after the judgment of the Constitution Bench of this Court in L. Chandra Kumar v. Union of India (1997) 3 SCC 261). However, that does not answer the question of maintainability of a writ petition which seeks to impugn an order declining dispensation of pre-deposit of penalty by the Appellate Tribunal. ... When a statutory forum is created by law for redressal of grievance and that too in a fiscal statute, a writ petition should not be entertained ignoring the statutory dispensation. In this case, the High Court is a statutory forum of appeal on a question of law. That should not be abdicated and given a go-by a litigant for invoking the forum of judicial review of the High Court under writ jurisdiction. 16. In United Bank of India v. Satyawati Tondon (2010) 8 SCC 110, the Supreme Court again recalled the settled law observing thus: Unfortunately, the High Court overlooked the settled law that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is availa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18. In US Administrative Law, the position is no different. Explicit and implicit legislative preclusions of judicial review are adhered to. But absolute preclusions of judicial review are not presumed unless the Congress specifically bars review whereas, the bar of review to a limited extent is readily inferred. In such cases, review may be postponed to enable the executive agency to exercise discretion at various levels as willed by the Congress. In Erika United States v Erika, Inc. (1982) 456 US 201: 1972 L.Ed 12 , the US, Supreme Court ruled that, "judicial review may be shaped or postponed, to allow the agencies to filter a myriad of fact-based claims, such as Social Security claims, that are suited to resolution by specialist agencies and special procedures". In National Association of Home Health Agencies v. Schweiker (1983) 459 US 1205: (1983) 75 L.Ed. 438, the Court held that the legislative policy of placing limitations is to prevent claimants, who seek judicial review of their claims for benefits, from bypassing the specific procedural requirements provided by Congress in various Acts, and the policy underlying this limitation to judicial review was avoided bringing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aequus fuerit" (he who shall decide anything without the other side having been heard, although he may have said what is right will not have done what is right" or as is now expressed "justice should not only be done but should manifestly be seen to be done"). These two rules and their corollary are neither new nor were they the discovery of English judges but were recognised in many civilisations and over many centuries. It is well established both in England and in India that the principles of natural justice yield to and change with the exigencies of different situations and do not apply in the same manner to situations which are not alike. They are neither cast in a rigid mould nor can they be put in a legal strait jacket. They are not immutable but flexible and can be adopted, modified or excluded by statute and statutory rules as also by the constitution, of the Tribunal which has to decide a particular matter, and the rules by which such Tribunal is governed. If legislation and the necessities of a situation can exclude the principles of natural justice including the audi alteram partem rule, a fortiori so can a provision of the Constitution such as the second provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s straight away without insisting that a party should first avail of the alternative remedy is an over liberal approach which has caused immense difficulties to the High Courts in the country because they have added to the huge arrears. The Courts have already become overburdened by this over liberal approach instead of following the settled legal principle that a writ petition should ordinarily be dismissed if there is an alternative remedy. The High Courts in India are already tottering and reeling under the burden of massive arrears which have flooded the dockets of the Court, and such kind of over liberal approach has only multiplied this problem manifold. If this approach is further continued a time will surly come when the High Courts will find it impossible to function. All this has happened because unfortunately some Courts have departed from well-settled legal principles. (Emphasis supplied) 23. Even in cases where there is demonstrable breach of natural justice, as of right a petition for judicial review would not lie. The aggrieved can appear before a specialist agency, be it a departmental authority or a quasi-judicial Tribunal and agitate in matters like taxes, so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing" which itself would be sufficient compliance with natural justice (see M.P. Industries Limited v. Union of India AIR 1966 SC 671, Union of India v. Jyoti Prakash 28 AIR 1971 SC 1093 and Indru Ramchand Bharvani v. Union of India). 26. There may be other situations where opportunity of filing objections in writing and as well as opportunity of personal hearing is to be given by the Appellate Authority or conditional with regard to the time, number of hearings, number of adjournments, place of hearing or locus of the person likely to be aggrieved. With this background, we may consider Section 58 of the Customs Act, which reads as under. 58. Licensing of private warehouses:- (1) At any warehousing station, the Assistant Commissioner of Customs or Deputy Commissioner of Customs may license private warehouses wherein dutiable goods imported by or on behalf of the licensee, or any other imported goods in respect of which facilities for deposit in a public warehouse are not available, may be deposited. (2) The Assistant Commissioner of Customs or Deputy Commissioner of Customs may cancel a licence granted under Sub-section (1): (a) by giving one month's notice in wr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and submission of explanation/objections by the licensee or Assessee as the case may be. If it is a case where the licensee asks for personal hearing, he is entitled only for three adjournments. The rule of natural justice is complied by giving three adjournments before conclusion of proceedings. If a licensee fails to avail the "reasonable opportunity", and remains ex parte, it cannot complain if the Adjudicating Authority concludes adjudication. If such construction is not accepted, Section 122A especially the proviso thereto would become meaningless. 29. Indisputably, in their reply dated 8* October, 2009 to the Show Cause Notice dated 19th January, 2009, the Petitioner requested to grant them personal hearing. After receiving the Show Cause Notice dated 19th January, 2009, the Petitioner sent six interim replies and requested for copies of statements of crew members/passengers. They were asked to appear in the office on 10th September, 2009 in response to which the Petitioner's operations manager Sri Ajay Thoria visited Custom House on 15th September, 2009 and 16th September, 2009 and gathered information. The Petitioner then, through their Counsel, sent a detailed reply da ..... X X X X Extracts X X X X X X X X Extracts X X X X
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