1. The petitioners are agents in Bombay for foreign ship-owners. They were agents for the vessel m.v. 'KOST1S PROIS'. The vessel arrived in Bombay carrying 21,000 long tonnes of shredded scrap as bulk cargo. On 16th December 1978 the vessel commenced discharge. The discharge was interrupted by a port strike. It was completed on 14th April ly79. The charter party for the vessel stipulated that draught surveys would be made at the port of loading and the port of discharge. A draught survey was made at Bombay on 24th April 1979 by Ericson & Richards (Surveyors) Pvt. Ltd. which showed that the vessel had discharged 21,482.85 long tonnes. The Bombay Port Trust issued an out-turn report in respect of the vessel which, since it was carrying bulk cargo, showed the out-turn as nil, the shortage as nil and the excess as nil.
2 On 18th April 1980 the petitioners received a communication dated 14th April 1980 from the Assistant Collector of Customs, By it the petitioners were informed of the particulars of Customs duty upon short-landing by the vessel set out in a show-cause memo dated 3rd April 1979. The petitioners were asked to show cause within seven days of the receipt of the communication failing which the case would be adjudicated on merits. On 19th April 1980 the petitioners wrote to the Assistant Collector stating that they had not received the memo and that, according to the out-turn report, the manifested cargo had been cleared and there was neither shortage nor excess. In the circumstances, they asked the Assistant Collector to advise them 'as regards the basis of the show-cause notice'. There was no response.
3. On 2nd May 1980 the Deputy Collector of Customs passed an order upon the show-cause memo. The findings were that it had been sent to the petitioners on 4th December 1979 and had been received by them on 5th December 1979, as was seen from the postal acknowledgment, It was based on the description of the out-turn of the Bombay Port Trust. Since the petitioners had failed to account for the shortage they were liable to penal action under Section 116 of the Customs Act, 1962. A penalty of Rs. 3,21,577.20 was imposed.
4. This petition impugns the order of the Deputy Collector of Customs.
There is no affidavit in reply, but I shall assume for the purposes of this petition that the show-cause memo had, in fact, been received by the petitioners and that it had been misplaced.
5. The petitioners immediately upon receipt of the letter of 14th April 1980 wrote to say that they had not received the show-cause memo and asked to be informed of the basis thereof. The order was passed without informing the petitioners of the basis of the show-cause memo without sending them a copy of the show cause memo and without even informing' them that the postal acknowledgment showed that it had been received by them. The petitioners were not afforded the opportunity of a hearing,-mandatorily required by Section 124 whether or not a reply showing cause had been received.
6. What the urgency was which motivated the Deputy Collector of Customs, a quasi-judicial functionary, to act with such unseemly haste is something which can only be speculated upon. Quasi-judicial authorities must act informed with the knowledge that they are obliged to give a fair opportunity of defence to the citizen. The conduct of the Deputy Collector of Customs does not suggest that he was so informed.
7. The order impugned is quashed and set aside. The matter is remanded to the Deputy Collector of Customs for fresh adjudication. This shall be done after he has served a fresh notice to show cause upon the petitioners, has given them an opportunity of filing a reply in writing and of a personal hearing. The order thereon shall be passed within a period of four months from to-day.
8. Rule accordingly, with costs.