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Calcutta High Court : Mishra & Mishra Agencies & Anr. -Vs.- Union of India & Anr. : 15th September, 2016

In the High Court At Calcutta

Constitutional Writ Jurisdiction

Original Side

WP 1193 of 2013

Mishra & Mishra Agencies & Anr.


Union of India & Anr.

Before : The Hon’ble Justice Arijit Banerjee

For the Petitioners : Mr. Rizu Ghoshal, Adv.
Mr. Sayantan Bose, Adv.
Mr. R. Dutta, Adv.
Ms. S. Purkayastha, Adv.

For the Respondents : Mr. Sharaf, Adv.

Heard On : 18.02.2016, 10.03.2016, 22.04.2016, 19.05.2016

CAV On : 19.05.2016

Judgment On : 15.09.2016

Arijit Banerjee, J:-

(1) In this application the writ petitioners challenge an order dated 24 October, 2014 passed by the Commissioner of Customs (Airport & Administration), Calcutta in a proceeding against the petitioner no. 1 under Regulation 22(7) of the Customs House Agents Licence Regulations (hereinafter referred to as ‘CHALR’), 2004. By the said order, the Commissioner in exercise of his power under Regulation 20(1) of the CHALR 2004 (replaced by Regulation 18 of the Customs Brokers Licencing Regulations, 2013) revoked the Customs House Agents Licence (in short ‘CHA Licence’) that was held by the petitioner no. 1 and further directed forfeiture of the entire security deposit furnished by the petitioner.

Case of the Petitioners:-

(2) At all material times, the petitioner no. 1 operated as a Customs House Agent. On 21 June, 2004 the Commissioner of Customs, Calcutta issued a CHA licence No. M-41 to the petitioner firm under Regulation 10(1) of CHALR, 1984 with validity period up to 2014. On the basis of such licence the petitioner firm carried on customs house agency business in Calcutta and Bombay.

(3) The petitioner no. 2 is a senior partner of the petitioner no. 1.
The petitioner no. 2 also carries on business of import and export under the name and style of M/s. Prayag International and holds an Import and Export Code (in short ‘IEC’) granted by the competent authority.

(4) In the year 2008 as proprietor of M/s. Prayag International, the petitioner no. 2 imported a container laden with assorted confectionary items (chewing gum) at the port of Bombay and filed bill of entry No. 987786 dated 2 September, 2008 in his capacity as a CHA as a partner of the petitioner firm for assessment and clearance of the imported goods. The said goods were detained by the Directorate of Revenue Intelligence (DRI) on the ground that the said import was made for one Ravi Kumar for monetary consideration. A show cause notice was issued by the Addl. Commissioner of Customs and by an order dated 20 August, 2009, the authorities confiscated the imported goods with an option to the importer to get the same released by payment of fine of Rs. 1.25 lacs and also imposed penalty of Rs. 1 lac on the importer.

(5) The petitioner no. 2 challenged the said order dated 20 August, 2009 by way of appeal before the Commissioner of Customs which was disposed of by an order dated 30 November, 2009 whereby the impugned order was set aside with a direction for assessment of the bill of entry as per the proper Custom Valuation Rules, 2007.

(6) However, the Customs Authorities at Mumbai made no assessment of the concerned goods and sold the said goods without any notice to the petitioners. The entire sale proceeds are lying with the Mumbai Customs Authorities.

(7) By a memo dated 21 November, 2008, the Commissioner of Customs (General), Mumbai Customs House, suspended the CHA Licence of the petitioner no. 1 at Mumbai for alleged irregularities in connection with the aforesaid import. The petitioners challenged the said memo before this Court by filing WP 312 of 2009. The Learned Judge held that this Court did not have territorial jurisdiction in the matter and disposed of the writ petition with liberty to the petitioners to move before the appropriate forum for redressal against the order impugned in the said writ petition.

(8) On 1 December, 2008, Calcutta Commissionorate also suspended the CHA Licence of the petitioner no. 1 on the basis of which it was carrying on business in Calcutta. Such suspension was challenged in this Court by filing WP 1804 of 2008 and the suspension order was set aside by this Court’s order dated 14 January, 2009.

(9) A further show cause notice dated 31 December, 2010 was issued by the Calcutta Customs to the petitioner no. 1 under Regulation 22(1) of the CHALR, 2004 calling upon the petitioner no. 1 to show cause as to why the CHA Licence held by the petitioner should not be revoked.

Such notice was issued on the basis of incorrect allegations. The petitioner no. 1 duly replied to the said show cause notice by letter dated 21 March, 2011 dealing with and refuting the allegations in the show cause notice. A purported enquiry was held before the Enquiry Officer appointed by the authorities. At such proceeding the petitioner no. 1 submitted the Letter of Authority from the importer for the import of the aforesaid goods at the Mumbai Port. However, the Enquiry Officer did not give due consideration to the documents submitted by the petitioner no. 1 and held all the charges to be proved by his enquiry report dated 17 July, 2013.

(10) The Deputy Commissioner of Customs, CHA Section, Customs House, Calcutta by his letter dated 17 July, 2013 forwarded a copy of the enquiry report to the petitioner firm with liberty to make representation in respect of the enquiry report. The petitioner duly submitted the representation specifically contending, inter alia, that the enquiry proceeding has been conducted in violation of the principles of natural justice.

(11) By the impugned order, the respondent no. 2 mechanically upheld the findings of the Enquiry Officer in respect of the charges relating to violation of Regulation 13(a) of the CHALR, 2004, without any application of mind. Learned Counsel for the petitioners challenged the order of the respondent no. 2 on the following grounds:-

(i) The respondent no. 2 upheld the finding of the Enquiry Office to the effect that the petitioners did not submit the Letter of Authority at the time of clearance of the goods under bill of entry No. 987786 dated 2 September, 2008, mechanically and without any basis.

(ii) The records pertaining to the said bill of entry were neither disclosed nor produced at the time of hearing which was clear violation of the principles of natural justice.

(iii) The purported finding of the respondent no. 2 that the petitioner no. 1 was guilty of violation of Regulation 13(a) of the CHALR, 2004 is based on no evidence and is perverse.

(iv) No document from the Assessing Officer complaining that there had been failure on the part of the petitioner no. 1 to produce the Letter of Authority at any stage during processing of the bill of entry was produced or disclosed at the time of enquiry or hearing.

(12) Learned Counsel, in anticipation, submitted that although an alternative remedy in the form of appeal is available to the petitioners, yet, the writ petition is maintainable and should be entertained since the order impugned was passed without observing the principles of natural justice. In this connection Learned Counsel relied on the following decisions:-

(i) State of West Bengal-vs.-North Adjai Coal Co. Ltd., (1971) 1 SCC 309. At paragraph 3 of the judgment the Hon’ble Apex Court held that it is true that normally before a petition under Art. 226 of the Constitution is entertained, the High Court would insist that the party aggrieved by the order of a quasi-judicial Tribunal should have recourse to the statutory authorities, which have power to give relief.

But that is a rule of practice and not of jurisdiction. In appropriate cases, the High Court may entertain a petition even if the aggrieved party has not exhausted the remedies available under a statute before the departmental authorities.

(ii) State of Tripura-vs.-Manoranjan Chakraborty, (2001) 10 SCC 740. In this case, the Apex Court observed that if gross injustice is done and it can be shown and that is good reason why the court should interfere, then notwithstanding the alternative remedy which may be available, a Writ Court can in an appropriate case exercise its jurisdiction to do substantive justice.
(iii) Harbanslal Sahnia-vs.-Indian Oil Corporation Ltd., (2003) 2 SCC 107. At paragraph 7 of the judgment the Hon’ble Apex Court observed that the rule of exclusion of jurisdiction by availability of an alternative remedy is a rule of discretion and not one of compulsion.

Following its earlier decision in the case of Whirlpool Corporation ((1998) 8 SCC 1), the Hon’ble Supreme Court reiterated that in an appropriate case in spite of availability of an alternative remedy, the High Court may still exercise its writ jurisdiction in at least three contingencies: (i) where the writ petition seeks enforcement of any of the fundamental rights; (ii) where there is failure of principles of natural justice; or (iii) where the orders or proceedings are wholly without jurisdiction or the vires of an Act is challenged.

(13) Relying on the aforesaid decisions learned Counsel submitted that the respondents being statutory authorities have not acted in accordance with the provisions of the statute and in defiance of judicial procedure and in total violation of principles of natural justice causing serious prejudice to the petitioners, thus, warranting interference by this Court.

Contention of the respondents:-

(14) Although a detailed affidavit-in-opposition has been filed on behalf of the respondent no. 2 giving particulars of the alleged irregularities and illegalities committed by the petitioners and seeking to justify the revocation of the CHA Licence of the petitioner no. 1, at the time of hearing Learned Counsel for the respondents primarily urged the point of maintainability of the writ petition.
(15) Mr. Saraf, learned Counsel for the respondents submitted that this writ petition should not be entertained in view of the availability of an appeal to a customs agent under Sec. 129A of the Customs Act, 1962 as provided by Regulation 21 of the Customs Brokers Licensing Regulations, 2013 (in short ‘CBLR 2013’), which have replaced the CHALR, 2004. Learned Counsel relied on the decision of the Hon’ble Apex Court in the case of Union of India-vs.-Guwahati Carbon Ltd., 2012 (278) ELT 26 (SC). In that case, the Hon’ble Apex Court observed that when a revenue statute provides for a person aggrieved by an assessment thereunder, a particular remedy to be sought in a particular forum, in a particular way, it must be sought in that forum and in that manner and all the other fora and modes of seeking remedy are excluded.

(16) Learned Counsel also relied on a decision of this Court in the case of Nepa Agency Co. Pvt. Ltd.-vs.-Union of India, 2015 (321) ELT 620 (Cal.). In that case, the facts were almost identical with the facts of the present case. Licence of a customs house agent was initially suspended and finally revoked by the Commissioner of Customs. The writ petition challenging such revocation of licence was dismissed by this Court on account of availability of alternative remedy by way of appeal before the Customs, Excise and Service Tax Appellate Tribunal, (in short ‘CESTAT’).

Court’s View:-

(17) It is settled law that a court exercising the power of judicial review is concerned not with the decision of the concerned authority but with the procedure that the authority has followed in arriving at the decision. What is under scrutiny is not the merits of the decision but the decision making process. Generally, the extraordinary power under Art. 226 of the Constitution is exercised by the High Courts in those cases where the authority has acted contrary to statutory provisions or in violation of fundamental principles of judicial procedure or when an order is passed in total infraction of the principles of natural justice causing undue prejudice to the aggrieved party (Please see Union of India-vs.-Guwahati Carbon Ltd.) (supra).

Prima facie, I do not find any ex facie illegality in the order under challenge nor violation of the principles of natural justice. The order of the Commissioner impugned in this application is a well-reasoned order which has been passed after discussing the evidence on record.

The petitioners were given full opportunity of explaining/refuting the charges of irregularity/illegality levelled against them. The Writ Court does not sit in appeal over the decision of an authority and will not go into the question of sufficiency or otherwise of the evidence on the basis whereof the order has been passed. In my opinion, it cannot be said that the order is passed on the basis of no evidence and is therefore perverse. However, I make it clear that these observations of mine are only prima facie in nature since I am inclined to dispose of the writ petition on the ground stated hereinafter.

(18) I am fully conscious that availability of an efficacious alternative remedy is not an absolute bar to the maintainability of a writ petition.

The High Court, having regard to the facts of a case, has a discretion to entertain or not to entertain a writ petition. But the High Court has imposed upon itself certain restrictions one of which is that if an effective alternative remedy is available, the High Court would not normally exercise its writ jurisdiction. The High Court will require the aggrieved party to exhaust the alternative remedy before the Court intervenes by way of judicial review. Authorities for this proposition are legion and as an illustrative case one may refer to the decision of the Hon’ble Supreme Court in the case of Whirlpool Corporation-vs.- Registrar of Trade Marks (supra).

(19) In the case of Nepa Agency Co. Pvt. Ltd. (supra), this court held that the customs law is a complete code by itself. The Customs Act and the Rules and bye-laws framed thereunder constitute a comprehensive and exhaustive Code. The order under challenge has been passed by the Commissioner of Customs in exercise of his power under the Customs Brokers Licencing Regulations, 2013 which have been framed under Sec. 146 (2) of the Customs Act. Regulation 21 of the 2013 Regulations provides that a customs broker who is aggrieved by any order passed by the Commissioner of Customs under the said Regulations may challenge such order by way of appeal under Sec. 129A of the Customs Act before the CESTAT. The appeal as provided for, in my opinion, is an efficacious alternative remedy available to an aggrieved party like the petitioner no. 1. In fact, I am of the view that the appeal is a more comprehensive remedy in which all issues including factual issues and sufficiency or otherwise of the evidence on record can be gone into. In my opinion, when a statute is a complete code in itself on the concerned subject like the Customs Act and it provides a particular remedy before a particular forum, the aggrieved party must ordinarily exhaust such remedy before invoking the high prerogative writ jurisdiction of the High Court. This is a practice ordinarily followed by the Writ Courts and I do not find anything extraordinary in the facts of this case to depart from such wellestablished practice.

(20) One point, although not urged by the petitioners, crossed the mind of this court. That is, whether a writ petition can be dismissed on the ground of alternative remedy if the same has been admitted for hearing. However, I find that the Hon’ble Apex Court held in the case of State of Uttar Pradesh-vs.-Uttar Pradesh Rajya Khanij Vikas Nigam Sangharsh Samiti, (2008) 12 SCC 675, that it is not the legal position that once a petition is admitted, it cannot be dismissed on the ground of alternative remedy. At paragraph 38 of the judgment, the Apex Court observed, inter alia, as follows:-

“In our judgment, however, it cannot be laid down as a proposition of law that once a petition is admitted, it could never be dismissed on the ground of alternative remedy. If such bald contention is upheld, even this Court cannot order dismissal of a writ petition which ought not to have been entertained by the High Court under Article 226 of the Constitution in view of availability of alternative and equally efficacious remedy to the aggrieved party, once the High Court has entertained a writ petition albeit wrongly and granted the relief to the petitioner.”

(21) In view of the aforesaid, this court is not inclined to exercise its extraordinary power under Art. 226 of the Constitution in the facts of the case. Accordingly, this writ petition fails and is dismissed.

(22) However, if the petitioners approach the CESTAT by way of appeal against the order under challenge in this writ petition within a period of 6 weeks from date, the Tribunal shall decide such appeal in accordance with law without being influenced by any observation in this order, as expeditiously as possible, and preferably within a period of 6 months from date of presentation of the appeal, if any.

(23) WP No. 1193 of 2013 is accordingly disposed of.

(24) Urgent certified photocopy of this judgment and order, if applied for, be given to the parties upon compliance of necessary formalities.

(Arijit Banerjee, J.)

Additional Info

  • Date Range: Thursday, 15 September 2016
  • Court/Authority: High Court
  • Tax Type: Customs duty
  • Petitioner/Appellant: Mishra & Mishra Agencies & Anr. -Vs.- Union of India & Anr.
  • Respondent: Mishra & Mishra Agencies & Anr. -Vs.- Union of India & Anr.
  • Appl no. or Appl year: WP 1193 of 2013
  • Supreme Court Location: Delhi
  • High Court Location: Calcutta High Court
  • AAR Location: Delhi
  • Authority: Supreme Court

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