In Brief
Zodiac Clothing, an apparel exporter, challenged a penalty forfeiture of its bank guarantee for under-utilization of export quota. Over multiple appeals, the authorities claimed a Quota Certificate was defective and had been placed on a notice board. Only at the final appellate stage did authorities cite lack of an authenticated letter of credit. The Supreme Court held that the appellant was not fairly dealt with, as grounds for rejection were disclosed belatedly and without prior notice or authentication. The Court set aside the penalty and ordered refund of the invoked bank guarantee, emphasizing that administrative authorities must transparently communicate grounds of rejection throughout proceedings to comply with natural justice."
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