Madras High Court
Medi Herbs vs Union Of India on 27 June, 2022
Author: Anita Sumanth
Bench: Anita Sumanth
W.P.Nos.5396 & 5397 of 2001
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED:27.06.2022
CORAM
THE HONOURABLE DR. JUSTICE ANITA SUMANTH
W.P.Nos.5396 & 5397 of 2001
&
W.P.M.P.Nos.582 & 583 of 2010 & W.P.M.P.No.7484 of 2005
Medi Herbs,
Represented by
its Partner.S.Dhanasekaran
Sundharam Complex,
No.1, Villianoor Road,
Embalam, Pondicherry – 605 106. ...Petitioner in both W.Ps.
Vs.
1.Union Of India,
Ministry of Finance,
represented by its Secretary,
Government of India,
North Block, New Delhi – 110 001.
2.The Assistant Commissioner of Central Excise,
Goubert Avenue,
Pondicherry – 605 001.
3.The Superintendent of Central Excise,
Range II, Goubert Avenue,
Pondicherry- 605 001. ...Respondents in both W.Ps.
1/8
https://www.mhc.tn.gov.in/judis
W.P.Nos.5396 & 5397 of 2001
Prayer in W.P.No.5396 of 2001 :Writ Petition filed under Article 226 of the
Constitution of India, to issue a Writ of Certiorari, calling for the records of the
3rd respondent bearing reference OC No.1803/2000 dated 20.10.2000.
Prayer in W.P.No.5397 of 2001 :Writ Petition filed under Article 226 of the
Constitution of India, to issue a Writ of Declaration to declare Section 110 of
the Finance Act, 2000, as ultra vires Article 14, 19(1)(g) and 265 of the
Constitution of India in so far as the petitioner is concerned.
In both W.P.s
For Petitioner : Ms.P.Jayalakshmi
for K.Magesh.
For Respondents : Mr.V.Sundareswaran
Senior Panel Counsel
COMMON ORDER
Heard Ms.Jayalakshmi, learned counsel for the petitioner and Mr.V.Sundareswaran, learned Senior Panel Counsel for the respondents.
2. In W.P.No.5397 of 2001, the petitioner seeks a declaration to declare Section 110 of the Finance Act, 2000 as unconstitutional. This issue has been decided by the Hon'ble Supreme Court in the case of ITW Signode India Ltd. V. Collector of Central Excise (2003 (158) ELT 403), wherein, in conclusion, they state as follows:
….
2/8 https://www.mhc.tn.gov.in/judis W.P.Nos.5396 & 5397 of 2001 APPLICATION OF THE LAW:
54. The Statements of Objects and Reasons for enacting a statute can be read for a limited purpose. In Cotspun (supra) this Court held that Rule 10 does not deal with classification list or relate to reopening of the approved classification list. According to the Constitution Bench, the same is exclusively provided by Rule 173B.
55. Section 11A deals with a case when inter alia excise duty has been levied or has been short-levied or short-paid. The word "such" occurring after the words "whether or not" refers to non-
levy, non- payment, short-levy or short-payment or erroneous refund. It is, therefore, not correct to contend that the word "such" indicates only such short-levy which has been held to be non- existent in Cotspun having regard to Rule 173B. Such short-levy or non-levy may be on the basis of any approval, acceptance or assessment relating to the rate of duty on or valuation of excisable goods. Thus, any approval made in terms of Rule 10, in the event, any mistake therein is detected, would also come within the purview of the expression "such short-levy or short- payment". Such notice is to be served on the person chargeable with the duty which inter alia has been short-levy or short-paid.
56. It is true that Rule 173B has not been amended. But even if the same has not been done, it would not make a material difference as now a comprehensive provision has been made in the primary Act, and, thus, a rule framed thereunder even in case of conflict must give way to the substantive statute. It is a well-settled principle of law that in case of a conflict between a substantive act and delegated legislation, the former shall prevail inasmuch as delegated legislation must be read in the context of the primary/ legislative act and not the vice-versa.
57. The procedure laid down under Rule 173B of the Rules has specifically been included in the Act. Furthermore, by reason of the amended Act a provision has been made for reopening the approved classification lists. It is a procedural provision in terms 3/8 https://www.mhc.tn.gov.in/judis W.P.Nos.5396 & 5397 of 2001 whereof statutory authorities are required to determine as to whether the earlier classification was correctly done or not. The said authority upon giving an opportunity of hearing the parties may come to the conclusion that decision on the approval granted need not be reopened and even if the same is reopened, the reasons therefor are to be stated. As the provision of Section 11A is a recovery provision as regards non- levy or non-paid or short-levy or short-paid or erroneously refunded duties by reason of the said amendment the Parliament had merely provided that an approval on the basis of a classification list inter alia in case of a short-levy can be recovered if a finding is arrived at that the goods had undergone a short-levy. For the aforementioned purpose, Clause 110 of the Finance Act, validating actions taken under Section 11A can be taken into consideration whereby and whereunder a legal fiction is created.
58. The effect of creating such legal fiction is well-known and need not be reiterated. [See Bhavnagar University Vs. Palitana Sugar Mill Pvt. Ltd. and others (2003) 2 SCC 111, State of Karnataka Vs. Vishwabharathi House Building Coop. Soc. & Ors. (2003) 2 SCC 412, High Court of Judicature for Rajasthan Vs. P.P. Singh and Anr 2003 (4) SCC 239 and Dipak Chandra Ruhidas Vs. Chandan Kumar Sarkar (2003) 7 SCC 66]
59. Before us, the constitutionality of Section 11A as amended in the year 2000 has not been questioned.
60. Cotspun (supra) was decided when the matters relating to classification, approval thereof as also short-levy or upon detection of a mistake were governed by the rules. Rule 10 and Rule 173 B were to be read in conjunction with each other and the Constitution Bench merely followed the said principle of interpretation of statute. A different situation has arisen now having regard to the fact that not only the substantive provision dealing with the consequence of non-levy, non- payment or short levy or short-payment or erroneous refund but also has laid down the procedure therefor.
4/8https://www.mhc.tn.gov.in/judis W.P.Nos.5396 & 5397 of 2001
61. A statute, it is trite, must be read as a whole. The plenary power of legislation of the Parliament or the State Legislature in relation to the legislative fields specified under Seventh Schedule of the Constitution of India is not disputed. A statutory act may be enacted prospectively or retrospectively. A retrospective effect indisputably can be given in case of curative and validating statute. In fact curative statutes by their very nature are intended to operate upon and affect past transaction having regard to the fact that they operate on conditions already existing. However, the scope of the validating act may vary from case to case.
62. For the reasons aforementioned, we are of the opinion that the Section 11A of the Act as amended is a valid piece of legislation.'
3. In light of the above conclusion of the Hon’ble Apex Court, the prayer in W.P.No.5397 of 2001 is liable to be rejected and this writ petition stands dismissed.
4. In W.P.No.5396 of 2001, the petitioner challenges a letter issued by the respondent on 20.10.2000 calling upon the petitioner to pay certain demands along with interest.
5. It is the contention of the learned counsel for the petitioner that the Customs, Excise and Service Tax Appellate Tribunal (in short 'Tribunal'), had dealt with various appeals challenging orders giving rise to the above demands, and had disposed the same by order dated12.07.2006.
6. As against the above order of the tribunal, learned counsel states that 5/8 https://www.mhc.tn.gov.in/judis W.P.Nos.5396 & 5397 of 2001 CMA.Nos.2971, 2972 and 2973 of 2006 had been filed, but withdrawn by the petitioner, as recorded by the Division Bench in its order dated 03.07.2020.
Though petitioner submits that the impugned demands are connected to the demands challenged in the Civil Miscellaneous Appeals, nothing is placed on record before me to establish any such connection.
7. Then again, the pendency of the present Writ petition could well have been brought to the notice of the Division Bench and appropriate orders obtained even at that stage. This has not been done and this Court is thus, at this juncture, and in the absence of any corroborative documents, or any documents at all, unable to ascertain the similarity/identity of the present demands with those dealt with by the Tribunal.
8. Learned counsel would thus request liberty to pursue the matter before the authorities and petitioner is granted three (3) weeks from date of receipt of a copy of this order to file its response to impugned letter dated 20.10.2000 along with all/any supporting material.
9. Upon receipt of such response, the petitioner shall be heard and appropriate orders passed by the respondents, within a period of four (4) weeks from date of filing of such response. It is made clear that in the absence of any 6/8 https://www.mhc.tn.gov.in/judis W.P.Nos.5396 & 5397 of 2001 reply filed by the petitioner within the time frame granted above, it would be construed that the petitioner has no defence and the demand made under the impugned communication may be pursued by the authorities, in accordance with law.
10. W.P.No.5396 of 2001 is also dismissed. No costs. Connected Miscellaneous Petitions closed.
27.06.2022 Index : Yes Speaking Order sl To
1.Union Of India, Ministry of Finance, represented by its Secretary, Government of India, North Block, New Delhi – 110 001.
2.The Assistant Commissioner of Central Excise, Goubert Avenue, Pondicherry – 605 001.
3.The Superintendent of Central Excise, Range II, Goubert Avenue, Pondicherry- 605 001.
7/8https://www.mhc.tn.gov.in/judis W.P.Nos.5396 & 5397 of 2001 Dr.ANITA SUMANTH,J.
sl W.P.Nos.5396 & 5397 of 2001 & W.P.M.P.Nos.582 & 583 of 2010 & W.P.M.P.No.7484 of 2005 27.06.2022 8/8 https://www.mhc.tn.gov.in/judis