Jammu & Kashmir High Court
Tawi Autoparts, Industrial Estate ... vs Addl. Chief Controller Of Imports And ... on 2 May, 1997
Equivalent citations: AIR1998J&K19, AIR 1998 JAMMU AND KASHMIR 19
ORDER B.A. Khan, J.
1. A penalty of Rs. 10 lacs stands slapped on the petitioner for allegedly contravening the terms of import licence No. P/S1840871 dated 16-12-1978. It transpires that one Harcharan Singh was the sole proprietor of M/s. Tawi Autoparts manufacturing auto parts. His unit was provisionally registered by the Joint Director, Small Scale Industries dt. 8-2-1974 for manufacturing of auto parts. On this basis he was granted import licence for the import of stainless steel to manufacture auto parts. Later the Director of industries seems to have allowed him an additional line for manufacture of stainless steel utensils. He was accordingly granted permanent registration of his unit for manufacture of stainless steel utensils on 16-5-1980. His unit was inspected by the enforcement officials of the Chief Controller's office in 1981 and he was found to be manufacturing stainless steel utensils without getting the licence amended from the licensing authority/sponsoring authority. He died on 26-2-1984 and thereafter his business went haywire. The present petition has been filed through his wife and her case is that an excessive penalty of Rs. 10 lacs was imposed on the petitioner-unit without affording any reasonable opportunity of being heard in terms of Section 4-1(1)(a) of the Imports and Exports (Control) Act, 1947.
2. In the reply filed respondents have reiterated the stand taken by them in their detailed order dated 28-5-1986 impugned in this petition whereby penalty of Rs. 10 lacs was imposed on the petitioner. Their short case is that the petitioner was given licence to import stainless steel for manufacture of auto parts but instead it utilized the raw material for manufacture of stainless steel utensils, thus, committing breach of the terms of the licence rendering it liable to penalty which could extend to five times the value of the raw material consumed. It is also contended by them that the petitioner was served a show cause notice dated 6-11-1985 which did not elicit any reply and that a personal opportunity of hearing was also granted on 6-5-1986. It is also pointed out that the petitioner's unit was permanently registered on 16-5-1990 for the "same end product which does not cover the manufacture of stainless steel utensils."
3. Petitioner's grievance is that the impugned order levying disproportionate and excessive penalty was passed on a wrong factual basis as the unit was permanently registered for manufacture of stainless steel utensils and pot for auto parts. It is also urged that the order was passed at the back of the petitioner inasmuch as the sole proprietor of the firm had died on 26-2-1984 and the show cause notice was allegedly dated 6-11-1985. In other words it is projected that wife of the deceased-proprietor, the present petitioner, was not put on notice muchless given any reasonable opportunity of being heard under the relevant provisions of the Act.
4. Petitioner's both pleas deserve to be accepted. Going by the copy of the certificate of permanent registration on record, it seems that the petitioner-unit was permanently registered for manufacture of stainless steel utensilson 16-5-1980 by the General Manager. Industries. Therefore, it is not a case that the unit was permanently registered "for the same end product viz. manufacture of auto parts" and yet was manufacturing stainless steel utensils in breach of the terms of the conditions of the licence. To that extent the impugned order proceeds on a wrong basis. But, above all it is apparent on the face of the record that the present petitioner was not put on notice in violation of the mandatory requirement of the provisions of the Imports and Exports (Control) Act. According to respondents, they had put the unit on notice on 6-11-1985 when its proprietor had admittedly died on 26-2-1984. There is nothing on record to show that this notice had gone to the wife of the proprietor of the firm, the present petitioner or that she was afforded any opportunity of being heard.
5. An examination of the relevant provisions of the Act shows that Section 4-1 (i) provides for levy of penalty on a person who is found to use or utilise the goods of the licence for any purpose other than the purpose for which he holds the licence. The penalty can be imposed up to five times of the goods or material or Rs. 1,000 whichever is more.
6. Section 4-L postulates an opportunity to be granted to the owner of goods before imposing such penalty and provides that no order of adjudication or confiscation or imposing of a penalty can be made unless owner of goods or material etc., is given a notice in writing informing him of the grounds on which it is proposed to impose such penalty and on giving him a reasonable opportunity of making a representation in writing within such reasonable time as may be specified in the notice and if he/she so desires of being heard in the matter. As would be evident, this provision ensures sufficient safeguard to the person against whom penalty is proposed to be imposed and requires the authority concerned not only to issue him notice in writing but also to give a reasonable opportunity of making a representation in writing against the proposed penalty and within a reasonable time.
7. In the present case none of these requirements appears to have been observed in respect of the present petitioner. There is nothing on record to show that any notice in writing was given to her, not to speak of providing an opportunity of making a representation in writing against the proposed penalty. It seems that the penalty order was passed at her back without affording her an opportunity of being heard, thus, contravening the terms of Section 4-L. The action naturally becomes arbitrary and is vitiated. Above all the penalty imposed seems to beexcessive and disproportionate on the face of it, taking in regard that the petitioner-unit had closed down after the death of its proprietor and that the present petitioner was fending for herself and is not reportedly in a position to make both ends meet, feast of all, managing the affairs of the unit.
8. In the result, I allow this petition and quash the impugned order dated 28-5-1986 passed by respondent No. 1. This shall not, however, come in the way of respondents to put the present petitioner on notice and observe the requirements laid down in the relevant provisions of the Act or for that matter in the way of the petitioner to make a representation as provided in Section 4-1 and to resist the levy of penalty in the facts and circumstances of the case.