Gujarat High Court
Shree Yug International Pvt. Ltd. Thro ... vs State Of Gujarat on 5 April, 2024
Author: Umesh A. Trivedi
Bench: Umesh A. Trivedi
NEUTRAL CITATION
R/CR.RA/316/2022 JUDGMENT DATED: 05/04/2024
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL REVISION APPLICATION (FOR MUDDAMAL)
NO. 316 of 2022
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE UMESH A. TRIVEDI
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1 Whether Reporters of Local Papers may be
allowed to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair
copy of the judgment ?
4 Whether this case involves a substantial
question of law as to the interpretation of the
Constitution of India or any order made
thereunder ?
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SHREE YUG INTERNATIONAL PVT. LTD. THRO BHARAT
BIPINCHANDRA PANCHAL
Versus
STATE OF GUJARAT & ANR.
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Appearance:
MR HR PRAJAPATI(674) for the Applicant(s) No. 1
for the Respondent(s) No. 2
MR HARDIK SONI, ADDITIONAL PUBLIC PROSECUTOR for the
Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE UMESH A. TRIVEDI
Date : 05/04/2024
ORAL JUDGMENT
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NEUTRAL CITATION R/CR.RA/316/2022 JUDGMENT DATED: 05/04/2024 undefined
1. RULE returnable forthwith. Mr. Hardik Soni, learned Additional Public Prosecutor, waives service of notice of rule on behalf of respondent no.1 - State.
2. This Revision Application is filed by the applicant under Section 397 read with Section 401 of the Code of Criminal Procedure, 1973 challenging an order passed by the District Magistrate, Bhuj- Kachchh dated 30.01.2018 whereby the learned District Magistrate ordered to confiscate 10% of the value of total products seized to the tune of Rs.4,34,024/-, which was confirmed by the appellate court being Sessions Judge, Kachchh at Bhuj vide order dated 21.01.2022 in Criminal Appeal No.45 of 2018.
3. Heard Mr. H.R. Prajapati, learned advocate for the applicant as also Mr. Hardik Soni, learned Additional Public Prosecutor for the respondent no.1 - State.
4. As coming out from the impugned order passed by the District Magistrate, Bhuj-Kachchh pursuant to an application made by the applicant for renewal of his License No.157 of 2009, it was found that from trading products, there is breach of Clause - 3(3) and 3(4) of the Solvent, Raffinate and Slop (Acquisition, Sale, Storage and Prevention of use in Automobile) Order, 2000 (hereinafter referred to as 'the Order, 2000'). The Investigating Unit of supply office was directed to undertake inspection and report. Pursuant thereto, Mamlatdar, Gandhidham in company with Chief Inspector of Supply and Deputy Collector (Supply) carried out search on 20.09.2017 at the premises of the applicant wherein it was found that the Page 2 of 15 Downloaded on : Mon Apr 08 20:46:05 IST 2024 NEUTRAL CITATION R/CR.RA/316/2022 JUDGMENT DATED: 05/04/2024 undefined applicant has failed to submit quarterly End Use Certificate from the consumers to whom he sells the articles for which he is licensed, as provided under Clause 3(3) of 'the Order, 2000'.
4.1. It was further found that the applicant did not produce End Use Certificate of 63 firms, of Solvent C-9 totalling to 1487.589 Metric Tons for a period from January, 2015 to December, 2016. Similarly the applicant failed to produce End Use Certificate of 178 firms relating to HEXANE of total 6895.505 Metric Ton again from January 2015 to December, 2016. It is further found that the applicant purchased Solvent C-9 from Kunjal Synergy Pvt. Ltd, an importer, who did not possess license for Solvent C-9 and despite the applicant purchased the stock from him through bond transfer, the said purchase was unauthorized and thereby he entered into unauthorized sale thereof.
4.2. For the aforesaid four illegalities, the aforesaid stock came to be seized to the extent of 10% by the Mamlatdar and custody thereof was handed over to the applicant injuncting him to maintain it in a good condition and not to sell it or shift it or in any way dispose it of. As mentioned in the order, since there was breach found of Clause 3(3) and 3(4) of 'the Order, 2000' and breach of condition no.10(12) of the license, the applicant was issued show-cause notice dated 03.10.2017 why the stock seized should not be confiscated fully or in part under Section 6A of the Essential Commodities Act, 1955 (hereinafter referred to as 'the Act') as also since there was breach of conditions of Page 3 of 15 Downloaded on : Mon Apr 08 20:46:05 IST 2024 NEUTRAL CITATION R/CR.RA/316/2022 JUDGMENT DATED: 05/04/2024 undefined license, why the application for renewal thereof should not be consigned to file and license should not be cancelled. As further recorded in it, the applicant was issued notices to remain present before the District Magistrate for the purpose of hearing and production of necessary documents. Thereafter, it was adjourned time to time and the applicant also filed his written representation explaining the deficiencies mentioned hereinabove. Considering the written representation made by the applicant and according to the District Magistrate in the show cause notice, breach of 'the Order, 2000' as also condition of license was found by the District Magistrate and order as aforesaid confiscating the value of 10% seized goods to the extent of Rs.4,34,024/- came to be passed. Being aggrieved and dissatisfied with the aforesaid order passed by the District Magistrate, the applicant preferred Appeal before the Court of Sessions, Kachchh at Bhuj under Section 6C of 'the Act' in Criminal Appeal No.45 of 2018, which also came to be dismissed vide order dated 21.01.2022 by the Sessions Judge, Kachchh at Bhuj holding that all the requirements have been fully complied with before passing the order of seizure and confiscation by the authority, and therefore, the appellate Court held that it cannot be said that the provisions contained in 6A and 6B of 'the Act' are not complied with.
4.3. Mr. Harshad Prajapati, learned advocate for the applicant, vehemently submitted that there is only show-cause notice dated 03.10.2017 issued by the District Magistrate, Kachchh at Bhuj, which cannot be said to be a notice under Page 4 of 15 Downloaded on : Mon Apr 08 20:46:05 IST 2024 NEUTRAL CITATION R/CR.RA/316/2022 JUDGMENT DATED: 05/04/2024 undefined Section 6B of 'the Act'. He has further submitted that for issuance of show-cause notice, the District Magistrate has considered /read (I) an application for renewal of solvent license filed by the applicant dated 30.11.2016.
(ii) letter dated 13.09.2017 of Supply Office, Inspection Report dated 20.09.2017 filed by Mamlatdar, Gandhidham.
(iii) provisions made under 'the Order, 2000' as also (iv) provisions of 'the Act'.
4.4. However, the contents of it reflects that notice is issued only for consigning the application for renewal of license to file and /or why license should not be cancelled and why no action for the seized stock as per the departmental proceedings can be taken against the applicant. Therefore, according to his submission, the said notice cannot be said to be a notice issued warning to the applicant why the goods seized should not be confiscated. He has further submitted that under 'the Order, 2000' license is also required to be issued by the District Magistrate, and therefore, a renewal application was also made to him, which was considered while issuing show-cause notice and in process of it, the impugned show-cause notice dated 03.10.2017, which is annexed at page 7 came to be issued, which reflects to show cause why renewal application should not be consigned to file and license be cancelled as also why proceedings under 'the Act' in respect of seized goods should not be initiated against the applicant. According to him departmental proceedings may Page 5 of 15 Downloaded on : Mon Apr 08 20:46:05 IST 2024 NEUTRAL CITATION R/CR.RA/316/2022 JUDGMENT DATED: 05/04/2024 undefined also include filing of prosecution for breach of 'the Order, 2000' made under Section 3 of 'the Act' and punishable under Section 7 of 'the Act'. According to his submission, the impugned order does not speak anything about the license or renewal thereof. According to his submission, even if it is to be presumed as conjoint notice for cancellation of license as also taking action for confiscation of goods seized, not a single word thereof is there in the show-cause notice that he intends to confiscate the goods seized. He has further submitted that his statement in the notice that why departmental action in respect thereof should not be taken cannot not be construed and mean the confiscation of stock seized. It may be an action of filing prosecution. He has further submitted that confiscation of goods entails serious consequences thereof, and therefore, strict compliance of the provisions of 'the Act' and 'the Order, 2000' should be there. He has further submitted that though pursuant to the said notice, he filed the written representation explaining the irregularities found, he was not aware or alive that his seized goods is going to be confiscated by the Collector as notice did not reflect the said action to be taken or else even oral submissions should have been made in respect thereof. Therefore, he has submitted that the impugned order passed by the District Magistrate and confirmed by the appellate Court, holding that there is compliance of the provisions of law, is incorrect and orders are required to be quashed and set aside.
5. As against that, Mr. Hardik Soni, learned Additional Public Prosecutor, submitted that show-cause notice dated Page 6 of 15 Downloaded on : Mon Apr 08 20:46:05 IST 2024 NEUTRAL CITATION R/CR.RA/316/2022 JUDGMENT DATED: 05/04/2024 undefined 03.10.2017 is a conjoint notice taking action for cancellation of license as well apart from not renewing it for the irregularities committed by the applicant as also for the departmental proceedings under 'the Act', which means confiscation proceedings alone. He has further submitted that since the show-cause notice reflects that, while issuing it, District Magistrate has read the provisions of 'the Order, 2000' as also 'the Act', it can safely be presumed that it was a conjoint notice for cancellation of license as also confiscation of seized goods, and therefore, he has submitted that the order passed by the District Magistrate as also confirmed by the appellate Court on substantial compliance of provisions of law should be sustained and this Revision Application is required to be rejected.
6. Having heard the learned advocate for the applicant as also learned Additional Public Prosecutor, and going through the impugned judgment and orders as also considering the provisions of 'the Order, 2000' as also 'the Act', it emerges that an inspection was carried out at the premises of the applicant on 20.09.2017, as while considering the application for renewal of solvent license, for trading Solvent C-9 and HEXANE, bearing No.157/2009 the applicant is found to be acting in breach of 'the Order, 2000' in the aforesaid products, and therefore, the stock to the extent of 10% of 1478.589 Metric Ton of Solvent C-9 and 6895.505 Metric Ton of HEXANE, came to be seized by the Mamlatdar, Gandhidham. It is found that the End Use Certificate from the consumers to whom the applicant as a licensee sold the Page 7 of 15 Downloaded on : Mon Apr 08 20:46:05 IST 2024 NEUTRAL CITATION R/CR.RA/316/2022 JUDGMENT DATED: 05/04/2024 undefined aforesaid essential articles for a period from January, 2015 to December, 2016 to nearly 63 different entities is not produced and similarly End Use Certificate of 178 entities to whom HEXANE was sold by the applicant, End Use Certificate for the very same period were not produced and 10% of the aforesaid stock amounting to Rs.4,34,024/- came to be seized and entrusted to the applicant for safe custody thereof during pendency of the proceedings that may be initiated against it. Though there appears no much dispute about the irregularities mentioned in the notice dated 03.10.2017, which is claimed to be show-cause notice issued under Section 6B of 'the Act' by the learned Additional Public Prosecutor, it is seriously disputed by the applicant to term it as a notice for confiscation of the stock seized under Section 6B of 'the Act'. Considering the show-cause notice itself, which is at page 7 of the application, even if it is to be presumed that it is conjoint notice for cancellation of license as also confiscation of stock seized, there appears no single word of intendment to confiscate the essential articles seized during the course of inspection. As also it does not mention any grounds, except projecting irregularities, based on which it is proposed to confiscate the essential commodity seized. As such, District Magistrate is empowered under 'the Order, 2000' to issue license as well and initiate proceedings for confiscation of essential commodity in respect of which irregularities are found under different control orders. Still however, there is not a single word mentioned in the ultimate order in respect of cancellation of license or consigned to file the renewal application made by the applicant. Though there is no need Page 8 of 15 Downloaded on : Mon Apr 08 20:46:05 IST 2024 NEUTRAL CITATION R/CR.RA/316/2022 JUDGMENT DATED: 05/04/2024 undefined to clearly mention that it is a notice under Section 6B of 'the Act', there has to be at least some averment in it bringing it to the notice of the applicant that the District Magistrate intends to confiscate the essential commodity as well, while considering the application for renewal of license whether to renew it or cancel the same. I have examined the entire notice. It contains not a single word or ground about the intended confiscation, except why departmental proceedings should not be initiated, which may be in the nature of cancellation of license or refusal of renewal license, as requested by the applicant, or even prosecution of the accused under 'the Act'.
6.1. When the District Magistrate is conscious about considering the application for renewal of license, he has gone to the extent of asking the applicant why his license should not be cancelled for the aforesaid irregularities. He /she could as well in the clear terms or even indirect terms could have stated why essential products seized should not be confiscated. From the written representation and oral hearing as reflected from the impugned order, nowhere it is found that even during hearing, the applicant was made aware about intended action of confiscation of essential products seized by the authority. It can reasonably be presumed that since notice clearly contains the averments in respect of cancellation or consigning to file the application for renewal of license, for that also the applicant is supposed to explain in his written representation as also the oral submissions, which is recorded in the impugned order, and therefore, it cannot be said by stating in Page 9 of 15 Downloaded on : Mon Apr 08 20:46:05 IST 2024 NEUTRAL CITATION R/CR.RA/316/2022 JUDGMENT DATED: 05/04/2024 undefined show-cause notice that why departmental action should not be initiated against the applicant under 'the Act' considering even the provision of 'the Act' it cannot be equated with a sufficient notice as required under Section 6B of 'the Act'.
6.2. If at all the irregularities found are so serious and the essential products, which are seized can potentially be used for adulteration in motor spirit or high speed diesel, entire stock, if at all it is found that it has been done, could have been seized by the authority. The very fact that only 10% of the amount of total stock seized is ordered to be preserved, it shows that at least irregularities though found were not considered to be so serious having ability to adulterate either the motor spirit or high speed diesel, which is intendment of 'the Order, 2000' .
6.3. I am conscious of the fact that for any defect or irregularity in the notice issued under Section 6 B(1)(a) cannot be held invalid, if there is substantial compliance of the provisions thereof. However, in the present case, there is absence of grounds on which action for confiscation of essential commodity is proposed. In fact, no grounds is mentioned in the said notice based on which confiscation of essential commodity is proposed.
6.4. Furthermore, rejecting the explanation, reason assigned by the District Magistrate, it appears that certain firms did not provide End Use Certificate, and therefore, it could not be timely presented. However, it was assured to Page 10 of 15 Downloaded on : Mon Apr 08 20:46:05 IST 2024 NEUTRAL CITATION R/CR.RA/316/2022 JUDGMENT DATED: 05/04/2024 undefined produce the same within the time prescribed. For rejecting the explanation for irregularity no.1, it was stated that the certificates, which were required to be produced quarterly for each consumer /user had not been produced till the time of inspection. Rejecting the explanation at irregularity no.2, it is stated that such End Use Certificate for Solvent C-9 were not produced till renewal application is made and it were produced after notice is issued, and therefore, the said explanation was rejected whereas for irregularity no.3, it is again stated that End Use Certificate for HEXANE, which were not furnished at the relevant time of renewal application made but it has been produced after the notice is issued. For irregularity no.4, it is stated that since purchase of Solvent C-9 was made at high sea, it was not known to the applicant whether the seller possess sale purchase license for the same for Kachchh district. The said explanation is also rejected on the ground that since the applicant possess Solvent license since 2009, such explanation cannot be accepted, and therefore, even the irregularities for which stock to the extent of 10% is seized. It appears to be trivial in nature for which no action for confiscation of stock seized appears to be required, that too, to the extent of 10%. If at all there is any intendment of the hoarding of essential goods or black marketing, authorities can surely confiscate the entire goods for the irregularities found of that nature. When seizure is made of 10% of the stock, it leads to presumption that irregularities are not of that much importance, which requires confiscation of even seized stock of 10% of total goods.
Page 11 of 15 Downloaded on : Mon Apr 08 20:46:05 IST 2024NEUTRAL CITATION R/CR.RA/316/2022 JUDGMENT DATED: 05/04/2024 undefined 6.5. Furthermore, an assertion recorded in the impugned order passed by the District Magistrate that notice dated 03.10.2017 issued for the breach of provisions of 'the Order, 2000' as also condition of license to show-cause as to why seized stock should not be confiscated entirely or in part under Section 6A of 'the Act' as also since conditions of license is in breach to show-cause why application for renewal of license should be consigned to file and why license should not be cancelled issued dated 03.10.2017. However, if notice dated 03.10.2017 is seen, there is not a word about any intendment of the authority to initiate action under Section 6A of 'the Act' nor even a word about proposed action of confiscation either entire or in part stock seized is averred, and therefore, it can be safely said that the order impugned passed by the District Magistrate is even beyond the scope of notice and as such there is no notice at all of confiscation of seized goods, and therefore, the impugned order appears to be not in consonance with the provisions of 'the Act'. At the same time, the learned Sessions Judge in an Appeal when recorded undisputed facts of the case, in paragraph 8 appears to have committed the very mistake in sub paragraph 5 of it when it is recorded that show-cause notice was issued for breach of provisions of 'the Order, 2000' as also condition of license directing the applicant to show cause as to why the seized stock may not be confiscated. As stated hereinabove, I have gone through the entire notice and nowhere ground for proposed action of confiscation of the seized goods or even issuance of any notice as provided under Section 6B of 'the Act' for the purpose of confiscation appears to have been Page 12 of 15 Downloaded on : Mon Apr 08 20:46:05 IST 2024 NEUTRAL CITATION R/CR.RA/316/2022 JUDGMENT DATED: 05/04/2024 undefined averred in the said notice. The District Magistrate, as also learned Sessions Judge stated it to be a show-cause notice for an order of confiscation without there being a word of it in the said so called conjoint notice. The very fact that show-cause notice was responded from the contents thereof that is written representation filed pursuant to show-cause notice as recorded by the District Magistrate not a word about any representation being filed being alive to the confiscation proceedings is mentioned by the applicant. If at all in that written representation, copy of which is at page 9 of the application, contents of it referred to by the District Magistrate is considered, while rejecting the explanation offered it reveals that even the applicant was not alive to the intended action of confiscation. Therefore, the show-cause notice is responded is no ground to hold that notice for confiscation of seized goods under Section 6B of 'the Act' came to be issued. If at all any grounds are mentioned in the notice for proposed action of confiscation, in a written representation applicant would have dealt with those grounds based on which confiscation of seized goods are proposed. Moreover from written representation also it cannot be said that the applicant was alive to the proposed action of confiscation. If it was so then also show- cause notice can be said to be valid. However, it is also not there. Based on such admitted facts incorrectly recorded by the learned appellate Court in paragraph 8, he concluded in paragraph 10.3 of the impugned order that after the seizure of essential commodity finding it to be in violation of 'the Order, 2000' and when report was made to the Collector, the Collector should issue notice under Section 6B of 'the Act' and Page 13 of 15 Downloaded on : Mon Apr 08 20:46:05 IST 2024 NEUTRAL CITATION R/CR.RA/316/2022 JUDGMENT DATED: 05/04/2024 undefined afford an opportunity of making representation and hearing and if Collector is not satisfied by the representation, then he can pass an order of confiscation under Section 6A of 'the Act'. However, in next line it is observed that as noted hereinabove, all the requirements have been fully complied with before passing an order of seizure and confiscation by the authority, and therefore, the contention raised by the applicant that no show cause notice came to be issued is rejected, which is incorrect as stated herienabove.
6.6. I fail to find where it is noted that all requirements have been fully complied with, much less requirement of issuance of show-cause notice under Section 6B of 'the Act' for proposed action of confiscation of goods based on certain grounds. As stated hereinabove, it cannot be even termed as even conjoint notice for cancellation of license and initiation of proceedings for confiscation of seized essential commodity.
6.7. At the same time, all the irregularities appear to be technical in nature when substantial compliance of the provisions of 'the Order, 2000' is made as reflected from the order itself. If within the time prescribed, certain certificates are not produced but it has been produced even after issuance of notice, it may be a breach of requirement but it is technical in nature, and therefore, on that ground also for every breach of any control order, that too, for technical breach, no order for confiscation of 100% of the stock seized is required to be passed.
Page 14 of 15 Downloaded on : Mon Apr 08 20:46:05 IST 2024NEUTRAL CITATION R/CR.RA/316/2022 JUDGMENT DATED: 05/04/2024 undefined 6.8. However, as held hereinabove, there is an absence of issuance of Section 6B notice for the purpose of confiscation, of the show-cause notice under Section 6B of 'the Act' for confiscation of the seized goods, and therefore, I hold the order passed by the District Magistrate confiscating the value of 10% of the total value of goods to be illegal for want of required notice under 'the Act' as also no such order for such technical irregularities could have been passed when provisions of the 'the Order, 2000' are substantially complied with even as per the order passed by the District Magistrate rejecting the explanation offered for the same. As also the order impugned passed by the learned appellate Court is also required to be quashed and set aside for the very same reason as beyond the order of the District Magistrate nothing new is stated in it and what is stated in the order is not finding place on the record. Hence, both the impugned orders are hereby quashed and set aside. The present Revision Application is allowed. Rule is made absolute accordingly. Since the amount Rs.4,34,024/- i.e. an amount equivalent to 10% of the essential goods seized is ordered to be confiscated and deposited by the applicant with the District Magistrate, the District Magistrate is hereby directed to refund the same to the applicant within a period of four weeks from the receipt of the copy of this order.
(UMESH A. TRIVEDI, J.) siji Page 15 of 15 Downloaded on : Mon Apr 08 20:46:05 IST 2024