High Court: Reassessment Without Speaking Order Violates Customs Act

The assessee company filed a writ petition before the High Court challenging the reassessed bills of entry. The petitioner had self‑assessed goods under CTH 7005 10, relying on a classification previously accepted by Customs. However, the Department reassessed the entries without passing a speaking order or granting a personal hearing.

The petitioner challenged this, saying it was a clear breach of Sections 17(4) and 17(5) of the Customs Act, 1962, which mandates a reasoned order when reassessment differs from self‑assessment. The Customs Department appealed, and while raising a preliminary objection regarding an alternate remedy, admitted that a personal hearing was required, but the petitioner had already approached the Court by then.

Main Issue: If an alternative appellate remedy is available, can writ jurisdiction be used to reassess bills of entry without issuing a speaking order under Section 17(5) of the Customs Act, 1962?

HC’s Decision: The Hon’ble High Court ruled that the writ petition was maintainable despite the existence of an appellate remedy because the case involved a clear violation of natural justice. The Court highlighted that according to Section 17(5), when reassessment differs from self-assessment, Customs authorities must issue a detailed order within 15 days. In this case, no such order was issued, denying the petitioner the opportunity to respond and be heard. The Court instructed the Department to send a show cause notice within 15 days and to provide the petitioner a personal hearing.

A detailed, reasoned order should be issued within four weeks of receiving the reply. The Court also clarified that the petitioner can raise all legal defenses, including the limitation argument under Section 17(5). Since the petitioner had already paid the disputed duty under protest and obtained release of the goods, the writ petition was disposed of with directions. 

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