UNION OF INDIA AND ANR. versus M/S. JESUS SALES CORPORATION

Citation: [1996] 3 S.C.R. 894 · Decided: 26-03-1996 · Supreme Court of India · Bench: N.P. SINGH · Disposal: Appeal(s) allowed

Judgment (excerpt)

'' 
A 
' UNION OF INDIA AND ANR. 
v. 
MIS. JESUS SALES CORPORATION 
MARCH 26, 1996 
B 
(N.P. SINGH AND K. VENKATASWAMI, JJ.] 
Imports and Exports (Control) Act, 1947: 
S.4-M( 1), Third Proviso-Imposition of penalty on importer-Ap-
e peal-Appellate authority directing the importer to deposit 25% of the amount 
of penalry---Order challenged as violative of principle of natural justice since 
appellate authority did not give the importer an oral hearing-High Court 
quashing the order-Held, appellate authority' passed a reasonable 
order-Third proviso does not envisage an oral hearing to be given to importer 
before passing the order. 
Administrative Law : 
Principles of natural justice--Oral hearing-Held, order of appellate 
authority under the third proviso to s. 4-M(1) of Imports and Exports (Con-
trol) Act, 1947 directing the' importer to deposit 25% ·of amount of penalty 
· E without affording him an opportunity of personal hearing is not violative of 
principles of natural justice. 
A show cause notice was issued to the respondent under s.4-M of the 
Imports and Exports (Control) Act, 1947; and ultimately a penalty of Rs. 
6 lakbs was imposed on it. The respondent filed an appeal alongwith an 
F 
application for dispensing with the pre-deposit. The appellate authority 
directed the respondent to deposit 25% of the penalty amount or furnish 
bank guarantee of the equal amount. The respondent challenged the said 
order by filling a writ petition before the High Court. which allowed the 
writ petition and quashed the order holding that the appellate authority 
G should have given an oral hearing to the respondent before taking a 
decision under the third proviso to sub-section (1) of s.4-M of the Act. 
Aggrieved, the Revenue filed the present appeal. 
Allowing the appeal, this Court 
If 
HELD : 1.1. The Appellate authority by giving a direction to the 
894 
'f 
" 
0 
U.0.1. v. ~ESUS SALES CORPORATION 
895 
respondent to deposit only 25% of the.amount ofthe .penalty imposed upon A 
it, passed a reasonable order which should not have been held to be invalid 
, by the High Court merely on the gr~und that before passing the said order 
the responde~t was not given oral hearing. [902-G; 903-AJ 
. . 
. 
. 
1.2. The third proviso to sub-section (1) of s.4-M which vests power in 
the appellate authority to dispense with the deposit of.the amount of.the ·B 
penalty unconditionally or on some conditions does not say specifically that 
the order has to be passed only after hearing ·the parties concerned. The 
appellate authority may dispense with such deposit in.its discretion taking 
into.consideration the undue hardship which sm:h deposit'may cause to the 
appellant. The discrel.ion is to be exercised in a reasonable and rational C 
manner free from whims, vagariennd arbitrariness. [90l'D'E; 900•E] 
2.1. Under different situations and conditions the ·requirement of 
compliance of the principle of-natural justice vary. The courts cannot insist 
that under all circumstances arid under different siatutory provisions per-
sonal hearings have to be afforded to the persons concerned. [900-G] 
D 
1 
... ' 
. 
. 
. ' 
. 
. 
' Shyam Kisltore imd Oihers·.v. Milnii:ipal Corporation of Delhi and 
. Another, [1993) 1 SCC 22; referred tO. . 
. 
. 
. ·'.> 
' .,.,, 
'2.2. Wh~n I'rincfpfes·OfnatOrafjustice requi~e an opportuhityfo be 
' ' 
' 
:E 
heard before -an adverse order is ,passed on any appilal, ,or application, it. 
does. not .ht alf. drcumstan·ces mean a personal hearin('.'The · reqnirement 
is complied With by affording an opportunity to the person concerned tci 
· . present his .case J1efore such quasi-judicial authority who is expected' to 
.apply his judicial mind. to the issu.es .involved. ;[901'8,G) 
2.3. In the matters of taxation and revenue, the normal rule is that 
before :filing the appeal or before the appeal is heard, the person concerned 
shotild deposjtthe amount.which be· has .been directed. to deposit as a tax 
or .Penalty .. The non-deposit of such amount .itself is an exception ·which 
has .been. Incorporated in ·different· statutes Including the ,present one 
~erein the statutory requlrem~nt as ·envisaged ·by second proviso to. s; 4-
M(l), Is that beforj! an appeal is entertained, the amo.unt of penalty has 
to be deposited by the :appellant; .n order illspenslnl! with ·s.uch ·deposit 
shall amount to '8D exception to the said requirement ·Of deposit. 'Thel"j!• 
fore, tr. the appellate authority while passing .an 

Excerpt shown. Read the full judgment & AI analysis in Lexace.