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2007 DIGILAW 192 (CAL)

KAMAL PRASAD AGARWAL v. UNION OF INDIA

2007-03-20

SOUMITRA PAL

body2007
( 1 ) JUDGMENT the Court: In the writ petition the petitioner has challenged the orders both dated 22nd December, 2006 passed by the Zonal Joint director General of Foreign Trade on several grounds. The principal grounds are that the principles of natural justice had been violated in passing the impugned order since the complaint received from the commissioner of Customs (Preventive), Kolkata which formed the basis of the impugned order was not furnished and the orders do not spell out the reasons for imposing penalty. In order to appreciate the issue it is necessary to set out the relevant portion of one of the orders which is as under: "1) A notice of even No. dated 23. 08. 06 was issued to M/s. Megha international, 55/ 1a, Strand Road, 2nd Floor, Room No. 204, Kolkata -700 006 (hereinafter referred to as the "noticee firm") under sections 8, 9 (4), 10 and 11 of Foreign Trade (Development and Regulation) Act, 1992, calling upon the noticee firm to show cause as to why DEPB no. 0210017793 dated 23. 12. 2000 should not be cancelled ab-initio under clause 10 (a) of Foreign Trade (Regulations) Rules, 1993 and why their iec No. 0299019888 and all benefits under EXIM policy should not be suspended and fiscal penalty should not be imposed against them, under sections 8 and 11 the Act for violation of the conditions of EXIM Policy. The noticee was given 15 days time for submission of their reply. The reason for the notice arose on the basis of a complaint received from the Commissioner of Customs (Prev), Kolkata that the firm had deliberately and willfully misdeclared the goods, an exported, as of indian origin, for availing the benefit of DEPB scheme. Potassium chloride (MOP) were actually been imported into India from different countries by various agencies and/or importers availing the benefit of concessional rate of customs duty and benefit of huge Govt. subsidy, which were actually meant for the farming community of this country, but passed on to the other countries as exports. The item mentioned in the shipping bill is not the same as in the DEPB Schedule. In fact there is no DEPB for M. O. P. in the DEPB Schedule. 2) The firm did not submit any reply to the notice nor appeared for personal hearing. The item mentioned in the shipping bill is not the same as in the DEPB Schedule. In fact there is no DEPB for M. O. P. in the DEPB Schedule. 2) The firm did not submit any reply to the notice nor appeared for personal hearing. 3) I have gone through the facts and records of the case carefully, I find that M/s. Megha International, 55/1a, Strand Road, 2nd floor, Room no. 204, Kolkata - 700 006 had obtained the above mentioned DEPB for credit value of Rs. 12,62,800/- against export of Potassium Chloride (MOP ). 4) Since the firm have transferred the DEPB and in exercise of the powers vested in me under section 13 of the Foreign Trade (Development and Regulation) Act, 1992 read with section 11 (2) of the said Act, I hereby impose a penelty of Rs. 12,62,800/- as penalty in addition to Customs Duty and Interest from the date of issue of licence under reference on the firm and their Proprietor so that it acts as a deterrent against their misrepresentation of the firm in future. There is absolutely no doubt that the firm misrepresented in claiming DEPB since they failed to state that the goods are imported have Govt. Subsidy and description is not the same as in DEPB Schedule. The firm failed to establish that exported goods were of Indian origin". ( 2 ) IT may be noted except the quantum of penalty, in the other impugned order the reasons given in its support are similar. ( 3 ) IN the instant case, the petitioner was served with a notice to show cause. The petitioner neither chose to reply nor had intimated whether he was willing to be heard in person. However, that does no ipso facto mean that authority shall pass cryptic orders without citing reasons since they make the grounds for filing an appeal illusory. ( 4 ) IN a recent Judgment the Apex Court (Rajesh Kumar and Ors. v. Deputy Commissioner of Income Tax and Ors.), reported in 287 ITR 91 (SC)while deciding whether directions issued under section 142 (2a) of the income Tax Act, 1961 by the authorities are administrative or quasi judicial, held as under: "we, however, need not dilate on the said question being not very necessary for the purpose of this case. v. Deputy Commissioner of Income Tax and Ors.), reported in 287 ITR 91 (SC)while deciding whether directions issued under section 142 (2a) of the income Tax Act, 1961 by the authorities are administrative or quasi judicial, held as under: "we, however, need not dilate on the said question being not very necessary for the purpose of this case. But it is beyond any cavil that ordinarily unless excluded by operation of a statue, the superior courts while exercising power of judicial review shall proceed on the basis that assignment of reasons is imperative in character. When an authority be it administrative or quasi-judicial adjudicates on a dispute and if its order is appealable or subject to judicial review, it would be necessary to spell out the reasons therefor. While applying the principles of natural justice, however, the Court must also bear in mind the theory of useless formality and the prejudice doctrine". ( 5 ) THEREFORE, the law laid down in Rajesh Kumar (supra) is an appealable order passed by a quasi-judicial authority must contain reasons in its support. In the instant case, respondent No. 2 a quasi judicial authority, while passing orders should have cited reasons for arriving at the conclusion. Paragraph 4 is silent in this regard. Moreover, said paragraph does not indicate the manner in which penalty was calculated. Since orders impugned are the culmination of a thought process, they should have been reasoned demonstrating thereby the manner in which evidence or material was dealt with. Hence, as orders' are not supported by reasons, those are nullity and cannot be sustained. Moreover, orders passed were against the principles of natural justice as copy of the complaint by the commissioner of Customs which appears to be the basis of the show cause notice, was not supplied. ( 6 ) THEREFORE, the orders dated 22nd December, 2006 cannot be sustained and are set aside and quashed. The Zonal Joint Director general of Foreign Trade, respondent No. 2 is at liberty to proceed afresh in accordance with law after giving the petitioner a copy of the complaint by the Commissioner of Customs (Preventive), Kolkata and the proceedings shall be concluded within a period of six weeks from the date of communication of this order. The writ application, thus, succeeds and is allowed. No order as to costs. The writ application, thus, succeeds and is allowed. No order as to costs. Xerox certified copy of this order, if applied for, be supplied to the parties upon compliance of all formalities. Writ petition succeeds and allowed .