The Bombay High Court has set aside an adjudication order and an appellate order passed by the Directorate General of Foreign Trade (DGFT) after finding that the importer was not supplied with the Directorate of Revenue Intelligence (DRI) letter that formed the sole basis of the show cause notice.
The Bench of Justice M.S. Sanklecha and Justice Riyaz I. Chagla held that the proceedings required fresh consideration after supplying the relied-upon document and granting the petitioner an opportunity of hearing.
The appellant/assessee approached the High Court under Article 226 of the Constitution, challenging an order passed by the Joint Director General of Foreign Trade under Section 14 read with Section 9 of the Foreign Trade (Development and Regulation) Act, 1992.
The company also challenged the appellate order dated March 27, 2017, passed by the Additional Director General of Foreign Trade under Section 15 of the Act, which dismissed its appeal.
With the consent of counsel for both sides, the High Court took up the writ petition for final disposal at the admission stage.
The petitioner’s principal grievance was that both orders had been passed in breach of the principles of natural justice.
The Joint Director General of Foreign Trade had received a letter dated February 16, 2012, from the DRI’s Kolkata Zonal Unit. According to the judgment, this letter was the only document forming the basis of, and relied upon in, the show cause notice issued against the petitioner on April 27, 2012.
However, the petitioner was not furnished with a copy of the letter despite specifically requesting it. The document underlying the proceedings therefore remained unavailable to the party required to respond to the notice.
The respondents did not dispute this position before the High Court.
The High Court noted that the petitioner had raised the same objection before the appellate authority. The grievance was expressly recorded in the appellate order dated March 27, 2017.
Despite recording the objection, the appellate authority dismissed the appeal without addressing the failure to provide the relied-upon document.
The Bench observed that the appellate order did not even remotely consider this fundamental grievance. The appeal proceedings consequently failed to resolve the procedural objection raised by the petitioner.
In view of the undisputed failure to supply the DRI letter and the appellate authority’s omission to consider that issue, the High Court quashed and set aside both the original order dated May 17, 2012, and the appellate order dated March 27, 2017.
The Court restored the show cause notice dated April 27, 2012, to the file of the Joint Director General of Foreign Trade for fresh disposal.
It directed the authority to follow the principles of natural justice by providing the petitioner with a copy of the relied-upon document and hearing the petitioner before deciding the notice in accordance with law.
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