Legal principle

An ex parte order entailing adverse civil consequences — such as cancellation of a private bonded warehouse licence and imposition of penalty — must be set aside so that the affected party is first afforded an opportunity of personal hearing before the authority decides the matter afresh.

Court decision

The Court set aside the impugned order dated 17.07.2018 and remanded the matter to the Commissioner of Customs (Preventive), North Eastern Region, Shillong, directing the petitioner or its authorised representatives to appear within 3 weeks, whereafter the Commissioner was to grant an opportunity of personal hearing including submission of written reply. This disposed of the writ petition, with no costs — effectively in the petitioner's favour on procedural grounds, without adjudicating the merits of the cancellation or penalty.

Facts

Global Spirits, a registered partnership firm of Guwahati, held a private bonded warehouse licence dated 22.12.2016. Following an investigation of the warehouse that noted deficiencies, the Commissioner of Customs (Preventive), North Eastern Region, Shillong issued a show cause notice dated 28.05.2018 proposing cancellation of the licence. The department alleged that although the notice was served personally, neither the petitioner nor its representatives appeared, so no personal hearing could be granted and the matter was decided ex parte. By order dated 17.07.2018, the Commissioner cancelled the licence under Section 58B(1) of the Customs Act, 1962 read with Regulation 6 of the Private Warehouse Licensing Regulations, 2016, and imposed a penalty of Rs.1 lakh under Section 117 of the Customs Act, 1962. The petitioner moved the Gauhati High Court in writ jurisdiction challenging that order.

Key provisions

• Section 58B(1), Customs Act, 1962 — Cancellation of licence
• Regulation 6, Private Warehouse Licensing Regulations, 2016 — Validity of licence
• Section 117, Customs Act, 1962 — Penalties for contravention etc not expressly mentioned