Andhra Pradesh High Court - Amravati
Aashirvad Oil And Lubricants vs The State Of Andhra Pradesh, on 5 December, 2023
THE HON'BLE SRI JUSTICE VENKATESWARLU NIMMAGADDA
WRIT PETITION NO.41806 OF 2022
AND
WRIT PETITION NO.1480 OF 2023
COMMON ORDER:-
1. W.P.No.41806 of 2022 is filed to declare the action of Respondent Nos.4 & 5 in seizing the Lorry bearing No.AP 39 TU 7275 and 5500 Liters of Waste oil through Panchanama dated 04.06.2022 as illegal, arbitrary, violative of Articles 14 and 19(1)(g) of the Constitution of India, with a consequential direction to the respondents to release Lorry bearing No.AP 39 TU 7275 and 5500 Liters of Waste oil.
2. W.P.No.1480 of 2023 is filed to issue Writ of Certiorari, calling for the records relating to orders in V1/CS/106/Rjy/202 dated 12.01.2023 on the file of the third respondent, quash the same, with a consequential direction to the respondents to release Lorry bearing Registration No.AP 39 TU 7275 & AP 36 TA 9889 and 5500 Liters of Waste oil.
3. Both these writ petitions are filed under Article 226 of the Constitution of India by the same petitioners, as such, I find it expedient to decide both the writ petitions by common order.
4. The facts of the case are that, the petitioner conducts a business involving the purchase of waste oil from various states through invoice. This waste oil serves multiple purposes, such as fueling boiler steam and 2 NV,J WP No.1480 of 2023 & batch servicing lorry engines, without necessitating a licensing requirement. On 04.06.2022, the CSDT, Rajamahendravaram along with officials conducted surprise check on the petitioner‟s premises and seized 5500 liters of waste oil along with Lorry bearing Registration No.AP 39 TU 7275 & AP 36 TA 9889 under the cover of Panchanama dated 04.06.2023, on the ground that the petitioner did not obtain „No Objection Certificate‟ from the District Collector; Form-B license from the Civil Supplies Department and explosive license. The petitioner submitted a representation to the respondents, asserting that the oil in question is solely waste oil and not classified as bio-diesel. Thereafter, the respondents sent samples to NSR Industries, Peddapuram for scientific analysis and opinion, which opined that the subject oil is not bio-diesel. Even though an opinion was obtained from NSR Industries, classifying the subject oil as not „bio-diesel‟ or „petroleum product‟, the Collector (Civil Supplies), East Godavari District, Rajamahendravaram passed orders on confiscating 100% of the seized Oil to Government and imposed penalty of Rs.10,000/- per each vehicle (Total Rs.20,000/-) payment to Government through Challan u/s 6A of the E.C. Act, 1955. The Collector further directed the Civil Supplies Deputy Tahsildar, Rajamahendravaram to collect the said confiscated amount and vehicles penalty amount and remit the same to the Government. Aggrieved by the same, the present writ petitions are filed challenging the proceedings 3 NV,J WP No.1480 of 2023 & batch dated 12.01.2023 and consequently to release the lorry bearing Registration Nos.AP 39 TU 7275 & AP 36 TA 9889 and the confiscated oil.
5. In W.P.No.1480 of 2023, a counter affidavit has been filed by the Respondent No.2 - District Collector (Civil Supplies), East Godavari District. He submits that, though the petitioner is claiming it to be waste oil, it is found out that the oil is a by-product of petroleum. It is submitted in the counter affidavit that, as per Clause 2(d) of the Motor Spirit and High-Speed Diesel (Prevention of Malpractices in Supply and Distribution) Order, 1990, High Speed Diesel means any hydrocarbon oil (excluding mineral colza oil and turpentine substitute) which has its flash point at or above 25 degree Celsius and is suitable for use as fuel in compression ignition engines. The samples of lab report clearly shows that flash point below 300C and Sulphur percentage is 49%. Hence, it is flammable item, so the person who purchased the oil from the writ petitioner is being filled directly into the vehicles as it is suitable for use as fuel in compression ignition engines, thus it is considered as one type of diesel products under the purview of petroleum products and requested to dismiss the writ petitions.
6. A reply affidavit has been filed by the petitioner, denying material allegations. The petitioner submits that, reasonable opportunity of hearing was not afforded to the petitioner while conducting enquiry and the third 4 NV,J WP No.1480 of 2023 & batch respondent in a hasty manner conducted enquiry only with a view to foist the petitioner in one case or the other.
7. During hearing, Sri V.V.N. Narayana Rao, learned counsel for the petitioner would contend that, without there being any scientific analysis, the respondents seized the lorries and oil based on assumptions and presumptions that the seized oil is a by-product of petroleum. He further submits that, even though a report was obtained from the NSR Laboratories, Peddapuram, confirming that the seized oil is not „bio-diesel‟ or petroleum products, the respondents issued proceedings dated 12.01.2023 contrary to the Lab Report, thereby confiscated 100% of the seized oil to the Government and imposing penalty of Rs.20,000/- for the two vehicles and sought the reliefs as prayed for.
8. On the other hand, learned Government Pleader for Civil Supplies would submit that the petitioner is involved in clandestine business, claiming it to be waste oil, contrary to Clause 2(d) of the Motor Spirit and High-Speed Diesel (Prevention of Malpractices in Supply and Distribution) Order, 1990, as such the seized oil comes under the purview of petroleum products. Learned Government Pleader would further submit that, the petitioner is linked up with many vigilance cases and conducting business without bills, as such he is involved in clandestine practice for want of pecuniary gain. Finally, he submits that, the petitioner ought to have 5 NV,J WP No.1480 of 2023 & batch availed the remedy of filing an appeal under Section 6(A) of the Essential Commodities Act, 1955 before the Principal District and Sessions Judge, Rajamahendravaram, and without availing the alternative statutory remedy, the petitioner knocked the doors of this Hon‟ble Court, on this ground also, requested to dismiss the writ petitions.
9. Heard Sri V.V.N. Narayana Rao, learned counsel for the petitioner and learned Government Pleader for Civil Supplies.
10. Upon perusing the material available on record, it appears that, on receiving credible information that the petitioner is carrying out bio-diesel trading without any valid license/permission, the CSDT along with other officials have inspected the petitioner‟s premises. It is alleged that the petitioner who was carrying out the business of selling of bio-diesel or petroleum products could not produce any documents pertaining to their business and also did not show any purchase of the stock available at the time of inspection. It is also reported that a quantity of 5500 liters of oil was seized and confiscated to the State. Further, Lorry bearing Registration No.AP 39 TU 7275 & AP 36 TA 9889 were also seized.
11. As per G.O.Ms.No.4 Consumer Affairs Food and Civil Supplies (CS-I) Dept dated 08.02.2021, any person intending to purchase/store and sell „bio-diesel‟ has to obtain registration certificate. 6
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12. Further, the Commissioner of Civil Supplies, A.P. Vijayawada has issued Circular Instructions vide CCS.Ref.E021/14/2021 dated 18.11.2021 that, as per Sub-Clause 3 of the Motor Spirit and High Speed Diesel (Regulation of Supply and Distribution and prevention of Malpractices) Order, 2005, that, no person shall sell or agreed to sell any petroleum products or its mixture other than motor spirit or high speed diesel or any fuel authorized by the Central Government in any form branded or nomenclature which can be and is meant to be used as fuel in any type of automobile vehicles fixed with spark ignition engines or compressor ignition engines.
13. It is reported that, the samples of the seized oil were collected in three wooden containers deposited by the Deputy Tahsildar (CS), Nidadavole Mandal, East Godavari were sent to to NSR Industries, Peddapuram, which is authorized by Government of India, FSSAI, for conducting forensic analysis of the seized product. The Laboratory, NSR Industries vide letter dated 11.08.2022 has furnished report which reads as follows:
"We are in receipt of the purported samples of Biodiesel which has been handed over to us for analysis provided in three wooden containers and we are hereby submitting the analysis report to your good office.7
NV,J WP No.1480 of 2023 & batch Sir, we have carried out analysis test of the samples and found out that the samples are not matching biodiesel specifications (B-100) Hence, we conclude that the samples received are not Biodiesel (B-100)"
14. On perusal of Report dated 11.08.2022, it reveals that the sample is not confirming with the standards of bio-diesel specifications (B-100). Moreover, at the end of each Test Report, a note is clearly mentioned that the test values are not matching Bio-diesel (B-100) Specifications as per IS15607:2016 standards.
15. Food Safety and Standards Authority of India verification (FSSAI verification) is a regulatory process implemented by the FSSAI to assess and verify the compliance of standard food businesses with safety and quality standards by authenticating their FSSAI license. FSSAI certification involves thorough inspections, audits, and documentation reviews to ensure that the food products manufactured, processed, stored, and sold by businesses meet the prescribed standards. The FSSAI Verification is a powerful tool that enables businesses to verify the authenticity of FSSAI licenses and ensure compliance with food safety regulations. By integrating this into the systems, businesses can streamline their verification processes, enhance operational efficiency, and uphold the integrity of the food industry.
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16. It appears, the second respondent overlooked the Report dated 11.08.2022 submitted by NSR Industries and based on assumptions and presumptions proceeded further and seized the oil labeling it to be „bio- diesel‟ or petroleum products. When the Report emphatically mentioned that the test values are not matching Biodiesel (B-100) Specifications as per IS 15607:2016 standards, the District Collector (Civil Supplies), conveniently did not mention about the report, but stated about various vigilance case files. The second respondent recorded a strange finding that the oil being sold by the petitioner to various persons is being used for adulteration of diesel and also being sold to vehicle owners in the guise of bio-diesel. When the report itself states that the samples are not matching bio-diesel specifications, the second respondent erred in recording a finding that the oil used by the petitioner is of lowest grade of petroleum by products. No reason is recorded by the second respondent for arriving at such conclusion.
17. One of the contention urged by the petitioner is that Show Cause Notice was issued to the petitioner on 26.08.2022 by the third respondent calling upon him to appear in person or through an advocate on 27.08.2022 at 10:00 A.M at Distrit Collectorate, East Godavari, Rajamahednravaram and he was not provided reasonable opportunity of hearing.
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18. This Court in B. Manjula vs. District Collector, Civil Supplies, Kurnool and others1, observed as extracted hereunder:
"9. This Court is conscious of the fact that the law discussed above was laid down by the Courts in the context of disciplinary proceedings against Government servants and it may not be possible to adhere to the same rigors of procedure in an enquiry against a fair price shop dealer. However, this Court is of the considered opinion that since an order of cancellation of fair price shop visits the dealer with adverse consequences, the appointing authority must adhere to the fundamental ingredients of an enquiry. The enquiry need not be too elaborate as in the case of a disciplinary proceeding against a Government servant, but it shall follow the basic requirement of an enquiry which in my view must be as described infra.
10. An „enquiry‟ pre-supposes an opportunity of personal hearing to the dealer to explain his/her case based on the records such as sales and stock registers. If need be, such enquiry must also include recording the sworn statement of the dealer and witnesses, if any, from his/her side. In cases where either card holders or other persons sent any complaint, they must also be examined in the presence of the dealer or his/her lawyer and the dealer shall be given an opportunity of cross- examining such persons. The licencing /disciplinary authority shall also supply to the dealer all the reports on which he is likely to place reliance to the detriment of the dealer. Unless the dealer has no explanation at all to offer, the licensing/disciplinary authority is bound to hold a detailed enquiry.
1 2015 (4) ALT 572 10 NV,J WP No.1480 of 2023 & batch
11. The experience of this Court reveals that the appointing authorities of fair price shop dealers are dispensing with the requirement of making personal enquiry by summoning the dealers. They are merely relying upon the reports sent by their subordinates i.e., Deputy Tahsildars and Tahsildars, behind the back of the dealers and resting their decisions solely upon those reports. This procedure is anathema to the concept of enquiry which otherwise means affording the dealer an opportunity of a fair hearing."
19. In the present case, the third respondent issued show cause notice to the petitioner on 26.08.2022 and asked the petitioner to appear on the next day i.e. on 27.08.2022 calling for his explanation. The third respondent ought to have reasonable time for his appearance calling for his explanation. It is settled law that, before passing any final order, which affects the interest of any party, opportunity of personal hearing has to be accorded. Admittedly, in this case, opportunity of personal hearing is not provided to the petitioner, which is in violation of principles of natural justice.
20. The approach of the respondents all-through appear to foist the petitioner in one case or the other. In the absence of any valid and cogent reason for arriving at such conclusion, the proceedings dated 12.01.2023 are set-aside.
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21. In view of my foregoing discussion, writ petitions are allowed with the following directions:
a. The action of the Collector (Civil Supplies), Rajamahendravaram is declared as illegal and arbitrary; consequently, the proceedings V1/CS/106/RJY/202 dated 12.01.2023 are set-aside;
b. The respondents are directed to release Lorry bearing Registration No.AP 39 TU 7275 & AP 36 TA 9889 to the petitioners under proper acknowledgment, within a period of two weeks from the date of receipt of copy of this order; c. The respondents are directed to release the seized oil to the petitioner, if the seized oil is available with the respondents, pursuant to the confiscation orders passed by the respondents, under proper acknowledgment, within a period of two weeks from the date of receipt of copy of this order;
d. If the subject oil is sold, the petitioner is at liberty to challenge the confiscation proceedings,for recovery of the amount, if advised
22. Consequently, miscellaneous applications pending if any, shall also stand closed.
____________________________________________ JUSTICE VENKATESWARLU NIMMAGADDA Date:05.12.2023 SP