2003 PLP (Trib (PTD)

Date of hearing: 3rd February, 2003. This appeals has been filed by Messrs Hasan Associates, a clearing agent firm, against the order of the Additional Collector 'of Customs Adjudication, Karachi-I, passed on 20-12-2002.

2. The learned Advocate appearing on behalf of the appellant contended that a penalty of Rs.100,000 has been imposed against his client without issuing a show-cause notice and without disclosing the charges or evidence against him. He further contends that the order passed against his client is hit by the provisions of section 180 of the Customs Act, 1969. It is his view that no order for confiscation or for imposition of penalty can be made without following the provisions of said section.

3. The departmental representative contends that through a corrigendum, dated 13-9-2001, which was part of the original show- cause notice, the appellant was associated in the proceeding being conducted as an outcome of the show-cause notice, dated 29-6-2001.

4. From the pleadings of the rival parties, the moot point appears to be whether or not a corrigendum involving those parties who were not part of the original proceedings did amount to a notice as required under section 180 of the Customs Act, 1969. The word "corrigendum" means things to be corrected, obviously the said phrase refers to the original show-cause notice and means that an error or mistake in respect of material particulars can be issued at a later date, but it does not mean that through a corrigendum new rights or obligations are to be created.

5. The only provision in the Customs Act, 1969 empowering Customs Officer to correct errors is embodied in section 206 of the Act. According to the said provisions a clerical or an arithmetical error in any decision or order and arising therein from an accidental slip or omission can be corrected. There is no other provision in the Act whereby the character or nature of on-going proceedings can be changed by a Customs Officer. Thus in terms of customs enactment new liabilities cannot be created through a corrigendum. The Customs Authorities should have issued an independent notice in order to meet the requirements of the provisions of section 180 thereby providing reasonable opportunity to the appellant.

6. It has been seen that both under the common law and under the statute and the Constitution the requirements of a reasonable opportunity are:-- . (i) That the person proceeded against should be clearly and specifically told the charges standing against him; (ii) That he should-be given full and adequate opportunity to explain and establish his innocence; (iii) That he should be allowed to show cause against the punishment; (iv) That there must not be any mala fides anywhere; and (v) That whole thing must be honest and fair deal done with a sense of responsibility.

7. The opportunity in order to be a reasonable opportunity, must be a real opportunity, which would make it possible for a taxpayer to persuade the competent authority to come to a different conclusion, from the one at which he has tentatively arrived, and the Courts tests and judges the opportunity from this angle.

8. The provisions of section 180 are quite exhaustive and the same place an obligation on the part of the Customs Officer to issue a show cause notice. Even in this case, once the Adjudicating Authority arrived at a conclusion that imposition of penalty was required against some persons other than those included in the show-cause notice, are independent show-cause notice was required to be issued. By issuing a corrigendum so as to bring an infringement within the ambit of existing proceedings violates the principles of natural justice. This impropriety is apparent on the face of record.

9. Be that as it may, the outcome of the above discussion is that proceedings initiated against the clearing agent were in violation of the provisions of section 180 of the Customs Act, 1969. Hence the order of imposition of penalty against the agent is not sustainable. The same is accordingly set aside. The impugned order is modified to that extent only. S.A.K./683/Tax (Trib.) Order accordingly.