KOTHARI FILAMENTS & ANR. versus COMMISSIONER OF CUSTOMS (PORT) KOLKATA & ORS.

Citation: [2008] 17 S.C.R. 647 · Decided: 16-12-2008 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Appeal(s) allowed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

[2008] 17 S.C.R. 647 
~ 
KOTHARI FILAMENTS & ANR. 
A 
v. 
COMMISSIONER OF CUSTOMS (PORT) KOLKATA & 
ORS. 
(Civil Appeal No. 7307 of 2008) 
DECEMBER 16, 2008 
B 
' 
[S.B. SINHA AND CYRIAC JOSEPH, JJ.] 
Administrative Law - Principles of Natural Justice -
Customs Department passing order against importer for c 
violation of provisions of Customs Act - Reliance placed on 
documents collected during enquiry in the matter - Non-
furnishing of the documents, to the affected persons - Held: 
The order was passed in violation of principles of natural 
justice - Importer was entitled to proper hearing which would 
D 
if?cludes supply of the documents - Matter remitted to 
Commissioner of Customs - Customs Act, 1962- ss.111(d) 
and (m) and 112 (a) and (b). 
On verification of the imported goods of the 
appellants-importer, it was found that the imported goods 
E 
included the items, which were not declared by the 
appellants. Respondent-Customs Department issued a 
show cause notice to the appellant for payment of 
customs duty on the misdeclared goods with interest; 
for confiscation of the consignment and for initiation of 
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penal action against the appellants. Appellants stated 
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that the items ·alleged to be misdeclared were sent by 
mistake on the part of the exporter. The mistake was also 
accepted by the exporter. The Department by its order 
confiscated the goods ~nd also imposed penalty on the 
appellants. Appeal against the order was dismissed by 
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Customs, Excise and Gold· (Control) Appellate Tribunal. 
Writ petition against the order of the Tribunal was also 
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dismissed. 
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\n appeal to this Court, appellant contended that the 
647 
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648 
SUPREME COURT REPORTS 
[2008] 17 S.C.R. e 
~ 
A 
order passed by the Department was based on the 
documents collected during the departmental enquiry in 
the said matter, but the appellant was not supplied the 
documents. Hence, the order was in violatio~ of 
principles of natural justice. 
B 
Allowing the appeal and remitting the matter to 
Commissioner of Customs, tHe Court 
HELD: 1.1. The show cause notice issued by 
Customs Department, does not make enough indication 
,...... .. 
in regard to the nature of enquiry as also the conclusions 
c thereof. The show cause notice clearly demonstrates that 
·the contents of the document were not verified. 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 
D overseas enquiry was not conclusive, liberal use thereof 
was made by the Commissioner of Custom~ in his orde_r. 
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 
E 
without supplying the copies thereof. [Para 14] [653-D-F] 
1.2 The statutory authorities under Customs Act, 
exercise quasi-judicial function: In the event, a finding as 
regards violation of the P..rovisions of the Act is arrived 
_at, several steps resulting in civil or evil consequences 
F 
may be taken. The principles of natural justice, therefore, 
were ~quired to be complied -With. The Act does not 
prohibit application of the principl~s of natural justice. The 
1 
Commissioner of Customs could not have passed the 
order on the basis of the materials; which were known 
only to them, copies whereof were not supplied or 
G 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 niay have an answer to the charges OJ ~m.ay not have. 
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KOTHARI FILAMENTS & ANR. v. COMMISSIONER OF 
649 
CUSTOMS (PORT) KOLKATA & ORS. 
But th~ere cannot be any doubt whatsoever that in law he 
A 
is enti:fled 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. 
[Paras 15 and 16] [653-G-H; 654-A-C] 
Rajesh Kumar & Ors. v. Dy. CIT & Ors. (2007) 2 SCC 
B 
181; S.L. Kapoor v. Jagmohan & Ors. (1980) 4 SCC 379 and 
Mis. Kishinchand Chellaram v. The Commissioner of Income-
tax, Bombay City II, Bombay AIR (1980) SC 2117, relied on. 
2. The matter is remitted to the Commissioner of 
Customs for consideration of the matter afresh. The C 
Commissioner, in the event, intends to rely on the said 
do

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