Case: Kothari Filaments and Anr Vs. Commissioner of Customs Kolkata and Ors

It had categorically been stated that as the enquiry was yet to be completed, disclosure of the evidences was not permissible. Despite the fact that the result of such overseas enquiry was not conclusive, as noticed hereinbefore, liberal use thereof was made by the Commissioner of Customs in his order. The Commissioner of Customs was conscious of the fact that the result of the enquiry was not conclusive one way or the other. It is one thing to say that denial to supply the documents collected in the said enquiry has a statutory backing but it is another thing to say that use thereof was to be made without supplying the copies thereof. 15. The statutory authorities under the Act exercise quasi-judicial function. By reason of the impugned order, the properties could be confiscated, redemption fine and personal fine could be imposed and in the event an importer was found guilty of violation of the provisions of the Act. In the event, a finding as regards violation of the provisions of the Act is arrived at, several steps resulting in civil or evil consequences may be taken. The principles of natural justice, therefore, were required to be complied with. 16. The Act does not prohibit application of the principles of natural justice. The Commissioner of Customs either could not have passed the order on the basis of the materials which were known only to them, copies whereof were not supplied or inspection thereto had not been given. He, thus, could not have adverted to the report of the overseas enquiries. A person charged with mis-declaration is entitled to know the ground on the basis whereof he would be penalized. He may have an answer to the charges or may not have. But there cannot be any doubt whatsoever that in law he is entitled to a proper hearing which would include supply of the documents. Only on knowing the contents of the documents, he could furnish an effective reply. 17. This aspect of the matter has been considered in Rajesh Kumar & Ors. v. Dy. CIT & Ors. [(2007) 2 SCC 181] , wherein this Court held : "In any event, when civil consequences ensue, there is hardly any distinction between an administrative order and a quasi judicial order. There might have been difference of opinions at one point of time, but it is now well-settled that a thin demarcated line between an administrative order and quasi-judicial order now stands obliterated {See A.K. Kraipak and Ors. v. Union of India and Ors. [(1969) SCC 262] and Chandra Bhawan Boarding and Lodging, Bangalore v. State of Mysore and Anr. [AIR 1970 SC 2042 ] and S.L. Kapoor v. Jagmohan and Ors. [(1980 4 SCC 379] .Recently, in V.C. Banaras Hindu University v. Shrikant [2006 (6) SCALE 66 ], this Court stated the law, thus:`An order passed by a statutory authority, particularly when by reason whereof a citizen of India would be visited with civil or evil consequences must meet the test of reasonableness."It was observed :"Justice, as is well known, is not only be done but manifestly seem to be done. If the assessee is put to notice, he could show that the nature of accounts is not such which would require appointment of special auditors. He could further show that what the assessing officer considers to be complex is in fact not so. It was also open to him to show that the same would not be in the interest of the Revenue.In this case itself the appellants were not made known as to what led the Deputy Commissioner to form an opinion that all relevant factors including the ones mentioned in Section 142(2A) of the Act are satisfied. If even one of them was not satisfied, no order could be passed. If the attention of the Commissioner could be drawn to the fact that the underlined purpose for appointment of the special auditor is not bona fide it might not have approved the same. " In S.L. Kapoor v. Jagmohan & Ors. [(1980 (4) SCC 379] , this Court observed : "18. In Ridge v. Baldwin and Ors. [1964] AC 40 @ 68, one of the arguments was that even if the appellant had been heard by the watch committee nothing that he could have said could have made any difference. The House of Lords observed (at p. 68) :`It may be convenient at this point to deal with an argument that, even if as a general rule a watch committee must hear a constable in his own defence before dismissing him, this case was so clear that nothing that the appellant could have said could have made any difference. It is at least very doubtful whether that could be accepted as an excuse. But, even if it could, the respondents would, in my view, fail on the facts. It may well be that no reasonable body of men could have reinstated the appellant. But as between the other two courses open to the watch committee the case is not so clear. Certainly on the facts, as we know them, the watch committee could reasonably have decided to forfeit the appellants pension rights, but I could not hold that they would have acted wrongly or wholly unreasonably if they had in the exercise of their discretion decided to take a more lenient course." {See also M/s. Kishinchand Chellaram v. The Commissioner of Income-tax, Bombay City II, Bombay [AIR 1980 SC 2117 ]. 18. In view of the aforementioned settled legal principles, there cannot be any doubt whatsoever that the principles of natural justice have been violated in this case.19. For the views we have taken, the impugned judgment cannot be sustained. It is set aside accordingly. The matter is remitted to the Commissioner of Customs for consideration of the matter afresh. The Commissioner, in the event, intends to rely on the said documents, may supply the relevant copies thereof or at least allow the appellant to inspect the same.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]18. In view of the aforementioned settled legal principles, there cannot be any doubt whatsoever that the principles of natural justice have been violated in this case.19. For the views we have taken, the impugned judgment cannot be sustained. It is set aside accordingly. The matter is remitted to the Commissioner of Customs for consideration of the matter afresh. The Commissioner, in the event, intends to rely on the said documents, may supply the relevant copies thereof or at least allow the appellant to inspect the same.