Gujarat High Court
Shree vs The on 19 April, 2011
Author: Harsha Devani
Bench: Harsha Devani
Gujarat High Court Case Information System
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CA/4374/2011 9/ 9 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
CIVIL
APPLICATION - FOR AMENDMENT No.4374 of 2011
In
SPECIAL
CIVIL APPLICATION No.3637 of 2004
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SHREE
RAM STEEL ROLLING MILLS & 1 - Petitioner(s)
Versus
THE
CHIEF COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD & 2 -
Respondent(s)
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Appearance:
MR
PARESH M DAVE for
Petitioner(s) : 1 - 2.
None for Respondent(s): 1, 1.2.1, 3,
MR
DARSHAN M PARIKH for Respondent(s) :
2,
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CORAM
:
HONOURABLE
MS.JUSTICE HARSHA DEVANI
and
HONOURABLE
MS.JUSTICE BELA TRIVEDI
Date:
11/04/2011
ORAL
ORDER
(Per:
HONOURABLE MS.JUSTICE HARSHA DEVANI)
1. By this application, the applicants (original petitioners) seek to raise the ground contained in paragraph 2 of the application and to allow para 5A proposed to be incorporated in the captioned petition.
2. The applicants herein have approached this Court by way of the above referred petition challenging Order in Original No.41 to 45/D/2003 dated 31st December 2003 (Annexure-L to the petition) passed by the Deputy Commissioner of Central Excise. The said petition is pending for final hearing and disposal. Subsequently the applicants have filed the present application praying for permission to amend the petition as aforesaid.
3. Mr. Paresh Dave, learned advocate for the applicants, submitted that by the proposed amendment the petitioners have not raised any new challenge or new prayer. All that is sought for is an additional plea which goes to the root of the matter inasmuch as by the additional plea the applicants seek to raise a plea that by Notification No.6/2001-CE(NT) dated 01.03.2001, rules 96ZO, 962P and 96ZQ were omitted without any saving clause and section 3A of the Central Excise Act, 1954 (the Act) was also omitted vide section 121 of the Finance Act, 2001 which was given assent by the Hon'ble President on 11.05.2001 and thus section 3A of the Act also stands omitted with effect from 11.05.2001 without any saving clause and as such, no orders could have been passed against the applicants under these provisions if the actions against the applicants were not finally concluded at the time of omission of these provisions. It was submitted that the plea raised was for determination of a pure question of law and as such the application requires to be allowed.
In support of his submissions, the learned advocate placed reliance upon the decision of the Supreme Court in the case of Commissioner of Sales Tax, U.P. v. Sarjoo Prasad Ram Kumar, (1976) 37 STC 533 (S.C.,) for the proposition that unless there is some provision either in the Act or in the Rules framed thereunder which precludes the assessee from raising any objection as to jurisdiction if the same is not raised before the assessing authority, the assessee cannot be precluded from raising that objection at a later stage. The objection to jurisdiction goes to the root of the case. Reliance was also placed on the decision of the Supreme Court in the case of Union of India v. Sube Ram and Ors., (1997) 9 SCC 69, for the proposition that in case the Court has no jurisdiction, the decision of the Court would be a nullity and the same can be raised at any stage. Reliance was also placed upon the decision of the Supreme Court in the case of Balvant N. Viswamitra and Ors. v. Yadav Sadashiv Mule (dead) through Lrs. and Ors., (2004) 8 SCC 706, for the proposition that a defect of jurisdiction of the court goes to the root of the matter and strikes at the very authority of the court to pass a decree or make an order. Such defect has always been treated as basic and fundamental and a decree or order passed by a court or an authority having no jurisdiction is a nullity. Validity of such decree or order can be challenged at any stage, even in execution or collateral proceedings. The decision of the Supreme Court in the case of Chiranjilal Shrilal Goenka (Deceased) through Lrs. v. Jasjit Singh and Ors., (1993) 2 SCC 507, was cited for the proposition that it is settled law that a decree passed by a Court without jurisdiction on the subject matter or on the grounds on which the decree made which goes to the root of its jurisdiction or lacks inherent jurisdiction is a coram non judice. A decree passed by such a court is a nullity and is non est. Its invalidity can be set up whenever it is sought to be enforced or is acted upon as a foundation for a right, even at the stage of execution or in collateral proceedings. The defect of jurisdiction strikes at the very authority of the court to pass decree which cannot be cured by consent or waiver of the party. Lastly reliance was placed upon the decision of the Supreme Court in the case of Ratan Lal Sharma v. Managing Committee, Dr. Hari Ram (Co-education) Higher Secondary School and Ors., (1993) 4 SCC 10, for the proposition that generally, a point not raised before the tribunal or administrative authorities may not be allowed to be raised for the first time in the writ proceeding, more so when the interference in the writ jurisdiction which is equitable and discretionary is not of course a must as indicated by the Supreme Court in A.M.Allison v. State of Assam, AIR 1957 SC 227, particularly when the plea sought to be raised for the first time in a writ proceeding requires investigation of facts. But if the plea though not specifically raised before the subordinate tribunals or the administrative and quasi judicial bodies, is raised before the High Court in the writ proceeding for the first time and the plea goes to the root of the question and is based on admitted and uncontroverted facts and does not require any further investigation into a question of fact, the High Court is not only justified in entertaining the plea but in the anxiety to do justice which is the paramount consideration of the Court, it is only desirable that a litigant should not be shut out from raising such plea which goes to the root of the lis involved. It was accordingly argued that the plea raised by the amendment challenges the very jurisdiction of the adjudicating authority and as such, the same goes to the root of the matter. Hence, in the light of the aforesaid decisions of the Supreme Court the application deserves to be allowed.
4. The application is vehemently opposed by Mr. D. M. Parikh, learned Senior Standing Counsel appearing on behalf of the respondents. Referring to the affidavit-in-reply filed on behalf of the respondents, it was submitted that the petitioners, by the present amendment, seek to challenge the show-cause notice at a belated stage which is not permissible under the law. That the petitioners, after participating in the adjudication proceedings and challenging the same on merits, are not entitled to challenge the show-cause notice on the ground that the same involves a pure question of law. It was submitted that the petitioners are estopped from raising such issue, as the petitioners had not only given it up but had also not deliberately canvassed the same. Attention was invited to the decision of the Supreme Court in the case of Union of India v. Supreme Steels and General Mills and Ors., 2001(47)RLT 129 (SC), a copy whereof is annexed at Annexure-J to the petition, to submit that the Supreme Court in the said decision has held that the excise duty shall be assessed in respect of matters not yet closed and still pending before the concerned authorities and as such, in the light of the decision of the Supreme Court, the adjudicating authority was vested with the powers to adjudicate upon the show-cause notice. Inviting attention to the averments made in paragraph 2 of the petition, it was submitted that it was the case of the petitioners that even though the Supreme Court had directed in the case of Union of India v. Supreme Steels and General Mills and Ors. (supra) that the duty shall be assessed in respect of matters not yet closed and still pending before the concerned authorities on the basis of actual production but for the whole of the year, and not on the basis of the annual production capacity, and despite this direction of the Supreme Court, the third respondent herein has sought to demand compounded levy duties from the petitioner firm for the period from 1.9.1997 to 31.3.2000 on the basis of the annual production capacity though, admittedly, the petitioners' factory was closed with effect from 5.5.1998 and it had never resumed production thereafter. It was, accordingly, submitted that the petitioners had thus sought to place reliance upon the decision of the Supreme Court in the case of Union of India v. Supreme Steels and General Mills and Ors. (supra) and had acquiesced with the fact that the concerned authorities could decide the matters which are pending before them. It was submitted that in the circumstances, it was not permissible for the petitioners to now raise the contention regarding lack of jurisdiction on the part of the adjudicating authority once having taking shelter of the decision of the Supreme Court in the case of Supreme Steels (supra). The attention of the Court was drawn to an order dated 17th March 2011 passed by this High Court in the case of Gopal Iron & Steel Co. (Gujarat) Ltd. v. Union of India, in Special Civil Application No.501 of 2011, wherein, at the time of admitting the petition, the learned counsel for the petitioners had stated that the petitioners wish to press the sole ground of challenge viz., that with the omission of section 3A of the Central Excise Act, without any corresponding saving clause, no proceedings for levy of excise duty under deeming fiction of section 33A would survive and the proceedings instituted by the Department, culminating into passing of the impugned order, therefore, is wholly without authority. It was further stated that the petitioners wish to press no other ground against the order of the Commissioner. The learned counsel submitted that in the facts of the present case also against the order made by the adjudicating authority, the petitioners have an efficacious alternative remedy available under the relevant statutory provisions and as such, the challenge in the petition may be limited to the fresh challenge raised in the present application.
5. This Court has perused the record of the case and has considered the rival submissions advanced by the learned counsel for the respective parties. A perusal of the averments made in the application including proposed paragraph 5A, indicates that the applicants have sought to raise a new plea as regards lack of jurisdiction on the part of the adjudicating authority to adjudicate upon the show cause notice on the ground that at the time when the impugned orders were actually passed, the provisions of rules 96ZO, 962P and 96ZQ of the Rules and section 3A of the Act stood deleted and as such, no orders could have been passed against the applicants under the said provisions. Reliance is sought to be placed on various decisions which are referred to in proposed paragraph 5A. A perusal of the application further indicates that except for raising a new ground, the applicants have neither raised any new challenge nor have they claimed any new relief which may result in enlarging the scope of the petition. The only plea that is sought to be raised is as regards the jurisdiction of the adjudicating authority to pass the impugned orders in the light of the deletion of the aforesaid statutory provisions. As has rightly been contended by the learned advocate for the applicants, the plea sought to be raised by the amendment is a jurisdictional issue and goes to the root of the case. In the circumstances, in the light of the decisions of the Supreme Court on which reliance has been placed by the learned advocate for the applicants, this Court is of the view that it is permissible for the applicants to raise the challenge to the validity of the impugned orders on the ground of lack of jurisdiction, even at this stage, though the same had not been raised before the adjudicating authority.
6. The contention raised on behalf of the respondents to the effect that the applicants had not only given up the said challenge but had also not deliberately canvassed the same and as such, the applicants are estopped from raising such a plea at this stage, does not merit acceptance inasmuch as the Supreme Court in the case of Chiranjilal Shrilal Goenka (supra) has held that the defect of jurisdiction strikes at the very authority of the court to pass decree which cannot be cured by consent or waiver of the party. In the circumstances, this Court is of the view that having regard to the nature of the additional ground sought to be raised by the applicants, the application deserves to be allowed.
7. For the foregoing reasons the application succeeds and is accordingly allowed. The applicants are permitted to incorporate paragraph 5A as proposed in the present application in the captioned petition. The application stands disposed of accordingly.
8. The amendment shall be carried out forthwith.
(HARSHA DEVANI, J.) (BELA TRIVEDI, J.) jani Top