Customs Revisional Order Based on Another’s Case Without Assessing Taxpayer’s Defense: Madras HC Remands Matter [Read Order]

A.K. Ganesan filed a writ petition challenging a revisional order passed by the Principal Commissioner of Customs, which upheld penalties against him under Section 112 of the Customs Act, 1962.

The petitioner’s counsel argued that the revisional authority had not evaluated his case on its own facts but had instead relied entirely on the case of another individual, Vairavasundaram Jayanthi, from whom gold was seized at Chennai Airport.

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The petitioner’s counsel argued that Ganesan was not involved in the gold smuggling incident and had no connection with Jayanthi. The counsel further argued that the penalty under Section 112, which relates to improper importation of goods, was imposed on Ganesan without any independent reasoning and the authority based its findings on Jayanthi’s case under Section 114AA, which deals with the use of false documents.

The customs department’s counsel argued that the earlier findings and penalties were valid and that the revisional authority had the power to uphold the same.

The petitioner’s counsel argued in response that the law requires the authority to assess each person’s case separately, especially when penalties are imposed under different legal provisions. They argued that relying entirely on another person’s case without addressing his own arguments was a violation of natural justice.

The single-judge bench comprising Justice Abdul Quddhose observed that the revisional authority had not considered the petitioner’s case independently and had only looked at the facts relating to Jayanthi.

The court observed that although both individuals were penalised under different sections of the Customs Act, no separate discussion had been made about Ganesan’s role or the grounds he raised in his revision application.

The court found that the revisional authority failed to provide proper reasoning for upholding the penalty against the petitioner and did not give him an opportunity to be heard on his own case.

The court held that the failure to examine the petitioner’s defence independently was a valid reason to interfere under its writ jurisdiction. The court quashed the revisional order only as it applied to A.K. Ganesan and directed the customs authority to reconsider his case afresh after giving him a personal hearing.

The court also directed that a fresh order be passed within six months. The writ petition was allowed.

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