By TIOL News Service

ERNAKULAM, MAR 16, 2015: THE Petitioner challenged the correctness and sustainability of the order passed by the respondent Commissioner invoking the power and procedure under Regulation 23 of the Customs Brokers Licensing Regulations 2013, prohibiting the operation of the custom broker licence issued to the petitioner, virtually preventing him from carrying out such exercise in the Customs Station - at Cochin.

The prime ground raised is that the order is per se in violation of all the fundamental principles of natural justice, particularly, 'audi alteram partem ', in so far as no opportunity of hearing was ever given to the petitioner before the order was passed. Before arriving at any inference, it was very much necessary to have served notice to the petitioner, to explain the facts and circumstances. If the petitioner was given an opportunity to substantiate the position, the authorization would have been brought to the notice of the respondent. It is stated that, as per Regulation 11 (a) of the Customs Brokers Licensing Regulations 2013, the respondent ought to have required the petitioner to produce authorization.

After hearing both sides, the High Court held:

The crux of the observations (of Bombay High Court) is that, when the regulation is silent with regard to compliance, principles of natural justice have to be read into. However, it has also been observed that, in the matter of paramount emergent situation, particularly in public interest, it may not always be necessary to grant 'pre-decisional hearing' with regard to the proceedings under Regulation No. 21 [like Regulation 23 involved herein] and that such action however has to be restricted to be in operation for a limited period, to safeguard the interest of the parties concerned. It is also made a mention that, a 'pre-decisional hearing' must be the rule and its dispensation is an exception. The scope of the provision was considered by a Single Bench of the Culcutta High Court as well. Considering the facts of the particular case involved therein, it was observed that the impugned order was passed without affording an opportunity of hearing, as the allegation indicated in the impugned order did not reveal that it was so emergent and exceptional, and whether where the order of prohibition was inevitable.

After hearing both the sides, this Court finds that the course pursued by the respondent is not liable to be branded as arbitrary or illegal. However, it is to be made clear that operation of the said order has to be limited for a definite period, in view of the observations of Apex Court and the Division Bench of the Mumbai High Court. In the said circumstances, operation of impugned order passed by the respondent is limited to be in force for a period of 'six weeks'. The petitioner is set at liberty to file objection, if any, also producing copy of the relevant documents within two weeks and the matter shall be finalized, taking appropriate steps and pass necessary orders in tune with relevant provisions of law, after hearing, within one month thereafter. The right of the petitioner to continue to operate will depend upon the orders to be passed by the respondent. It is made clear that the petitioner will be at liberty to challenge the order to be passed by the respondent, in accordance with law, if it goes detrimental to the rights and interests of the petitioner.

(See 2015-TIOL-634-HC-KERALA-CUS)