Patna High Court
Gaya Cotton And Jute Mills vs Union Of India (Uoi) on 23 September, 1987
Equivalent citations: 1989(19)ECC85, 1992(61)ELT569(PAT)
Author: S.B. Sinha
Bench: S.B. Sinha
JUDGMENT S.B. Sinha, J.
1. This writ application is directed against the demand dated 28-1-1975 as contained in Annexure 1 to the writ petition made by the Assistant Collector, Central Excise, Gaya (respondent No. 3) and the letters, dated 3-12-1979 and 2-7-1982 issued by the respondent No. 5 and respondent No. 3 as contained in Annexures 4 and 6 respectively to this writ application and further for an appropriate writ directing the respondents to forbear from raising the demand of Rs. 17,585.97 paise against the petitioner in respect of the purported arrears of Central Excise duty allegedly due on account of M/s. Gaya Textiles Private Limited. The petitioner is a unit of National Textiles Corporation.
2. The aforementioned M/s.;Gaya Textiles Private Limited, a company incorporated under the Indian Companies Act, 1956 was having its textiles mills at Gaya and was engaged in the manufacturing of cotton fabrics of different varieties. Subsequently the mill was given on lease to M/s. Gaya Cotton and Jute Mills who started running the same. It is admitted that cotton textiles and cotton fabrics are excisable goods within the meaning of the provisions of Central Excises and Salt Act, 1944 and as such Central Excise duty is payable in relation to the said goods.
The aforementioned mill was closed down on 5-12-1965 and thereafter it was taken over by the Central Government pursuant to the provisions of the Sick Textile Undertakings (Taking Over of Management) Ordinance, 1972 (Ordinance No. 9 of 1972), which was published in the official Gazette of India on 31st October, 1972.
By virtue of or under the provisions of Section 4 of the aforementioned Ordinance, the management of sick textiles undertakings vested in the Central Government with effect from 31st October, 1972.
3. The name of the aforementioned mill which was being managed by Gaya Cotton and Jute Mills, as stated hereinbefore, was mentioned in Item No. 14 of the schedule appended to the aforementioned Ordinance. The aforementioned Ordinance No. 9 of 1972 was repealed and replaced by a Parliamentary Act known as Sick Textile (Taking Over of Management) Act, 1972. By virtue of and under the provisions of the aforementioned Act, the management of all the sick textiles mills including that of M/s. Gaya Cotton and Jute Mills was taken over.
Under the provisions of the aforementioned Act (Act No. 72 of 1972) a custodian was appointed in relation to the aforementioned Mill and management thereof was taken over after complying with the necessary formalities. The Parliament thereafter enacted the Sick Textiles Undertaking (Nationalisation) Act, 1974 (Act No. 57 of 1974), which was published in the official Gazette on 21st December, 1974 (hereinafter to be referred to as the said Act). In the said Act the "appointed date" has been defined to mean as 1st April, 1974, from which date the right, title and interest of the owner in relation to the sick textiles undertakings stood transferred to and vested absolutely in the Central Government or the National Textiles Corporation, as the case may be.
4. By virtue of or under the provisions of Section 5 of the said Act, every liability other than the liabilities specified in Sub-section (2) thereof, in relation to the aforementioned sick textiles undertakings, in respect of any period prior to the appointed date remained the liabilities of such owner and were to be enforced against them and not against the Central Government or the National Textiles Corporation.
5. By reason of the provisions of Section 17 of the said Act, a Commissioner of Payment was to be appointed for the purpose of disbursing the amount payable to the owners of such textile undertakings. In terms of Section 20 of the said Act provisions have been made to file claim applications before the Commissioner of Payments as a result whereof every person having a claim against the owners of sick textiles undertakings are required to prefer such claim before the Commissioner of Payments within 30 days from the specified date.
The Commissioner of Payments has, however, been empowered to condone the delay, in filing such a claim application, if sufficient cause therefor is made out.
6. Section 21 of the said Act provides for as to which category of the claims shall have priority over the others. Such priorities have been listed in the second schedule appended to the said Act, in terms whereof claims under category 2 of Part 'A' would get priority in respect of the dues relating to the revenue ; taxes ; cesses ; rates or any other dues of the Central Government or a State Government. Category 1 of the 2nd schedule provides for giving priority to the debts in respect of the loans advanced by the banks or any other institutions other than the banks and other loans etc.
7. From the tenor of the provisions of the said Act, as referred to hereinbefore, it is absolutely clear that the Parliament has fixed as to which categories of claims shall have priority over the others. Evidently the amount at the hands of the Commissioner of Payments received by him in lieu of nationalisation of sick textiles undertakings in question is to be disbursed in terms of the aforementioned statutory priorities.
8. From a perusal of the said Act, it would be evident that the same is a self contained code and any person having a claim as against the owner of a sick textile undertaking has to file a claim before the Commissioner of Payments in accordance with the provisions made therein.
9. The petitioner has asserted, which facts are not denied or disputed by the respondents, that in terms of the aforementioned Ordinance No. 9 of 1972 as also the said Act the management of the Mill in occupation of Gaya Cotton and Jute Mills was taken over and later on nationalised. The Government of India constituted National Textiles Corporation and handed over the sick textile mills for their operation to the aforementioned corporation so that production may commence at its earliest. The production from the mill aforementioned commenced in December, 1973.
10. The authorities under the Central Excises and Salt Act granted a fresh licence to the petitioner, which as stated hereinbefore is a unit of National Textiles Corporation as the previous licence granted in favour of Gaya Cotton Mills stood cancelled.
11. By the impugned letters, however, the respondent Nos. 3 and 5 have been demanding from the petitioner a sum of Rs. 17,585.97 paise on the ground that the petitioner-company has taken over the said unit with its assets and liabilities and as such it is bound to satisfy the aforementioned alleged outstanding arrears in respect of Central Excise duties.
12. Mr. K. N. Gupta, learned counsel appearing on behalf of the petitioner took me through the impugned orders as contained in Annexures 1, 4 and 6, as referred to hereinbefore, and submitted that from a perusal thereof it would be evident that the alleged excise duties were outstanding against the Gaya Textile Mills Private Limited.
Further, from a perusal of the letter dated 3-12-1979 issued under the signature of the respondent No. 5 and as contained in Annexure 4 to the writ application, it appears that Item No. 2 refers to the Account No. 1 dated 16-12-1967; similarly, from a perusal of Annexure 6 to the writ application it would appear that the petitioner's representation was rejected in respect of the alleged outstanding excise duties amounting to Rs. 17,585.97 paise.
13. Learned counsel appearing on behalf of the petitioner submitted that in view of the provisions of Section 5 of the said Act, the liabilities of the mill in relation to a period prior to the "appointed date" remained the liability of the owner of the sick textiles undertaking, which was nationalised in terms of the provisions of the said Act.
14. For a better appreciation of the points involved in this case Section 5(1) of the said Act is reproduced hereinbelow :-
"Every liability, other than the liability specified in Sub-section (2) of the owner of a sick textile undertaking, in respect of any period prior to the appointed day shall be the liability of such owner and shall be enforceable against him and not against the Central Government or the National Textile Corporation."
15. From a perusal of the said provisions, it would be evident that the entire liabilities of the owner in relation to any period prior to the appointed date remained that of the owner and no part thereof can be realised from the Central Government or the National Textile Corporation Company, as the case may be. Further, from a perusal of Sections 17 and 20 of the said Act, it would be absolutely clear that provisions have been made and procedures have been laid down for filing of a claim petition by all the persons including the Central Government before the Commissioner of Payments and further as to how and in what manner such claims are to be disposed of and the same are to be disbursed in accordance with the priority mentioned in the Second Schedule appended to the said Act.
16. In terms of Section 29 of the said Act a non-obstante clause has been provided for to the effect that the provisions of the said Act will have effect notwithstanding anything contained in any other law for the time being in force. The non-obstante clause, aforementioned is of wide amplitude.
17. There cannot be any doubt that the demands raised by the respondent Nos. 3 and 5 as contained in their letters dated 28-1-1975, 3-12-1979 and 2-7-1982 being in relation to the period prior to the "appointed date" cannot be enforced as against the petitioner, which is a unit of the National Textile Corporation.
18. It is a well settled rule of construction that the language of a provision or a rule should not be construed in a manner which would do violation of phraseology used thereto. It is also a well settled principle of law that if {he words of the statutes are themselves clear and unambiguous, then no more is necessary other than to expound these words in their ordinary and natural senses.
It is also well known that the words themselves alone, in such case, declare the intention of the law givers. In my opinion, the words of Section 5 of the said Act are absolutely clear and unambiguous and clearly spell out the intention of the legislature, and as such no other meaning can be assigned to the said section nor any other construction is possible. In Union of India v. Sankalchand Himatlal Sheth and Anr., reported in A.I.R. 1977 S.C. 2328, it has been held that where the statute's meaning is clear and explicit words cannot be interpolated.
In Sutters v. Briggs, reported in 1922 Appeal Cases page 1 at page 8 Viscount Brikenhead Lord Chancellor held as follows :-
"Where, as here, the legal issues are not open to serious doubt, our duty is to express a decision and leave the remedy (if one to be resolved upon) to others."
Recently in Raja Satyendra-Narain Singh v. State of Bihar and Ors., reported in 1987 B.L.J.R. page 477 at 481 the Supreme Court has held that the basic principle of construction of every statute is to find out what is clearly stated and not to speculate upon latent imponderables.
In Balasinor Nagrik Co-operative Bank Ltd. v. Babubhai Sankerlal Pandey and Ors., reported in 1987 Vol. 1 S.C.C. page 606, the Supreme Court held as follows :-
"It is an elementary rule that construction of a section is to be made of all parts together. It is not permissible to omit any part of it. For the principle that the statute must be read as a whole is equally applicable to different parts of the same section."
19. In view of the aforementioned authoritative pronouncements and in view of my finding aforementioned phraseology used in Section 5 is absolutely clear, it must be held, that the petitioner is not liable to discharge the liabilities of the owner of a sick textile undertaking in respect of a period prior to the appointed date, i.e., 1st of April, 1974.
20. In this connection reference may be made to a decision of the Supreme Court in Workmen v. Bharat Coking Coal Limited, reported in 1978 L.I.C. page 709 wherein the Supreme Court while considering the effect of the provisions of Section 9 of Coking Coal Mines (Nationalisation) Act, 1972 held that all the monetary liabilities of the owner in relation to prior to the appointed date remained that of the owner. In my opinion, Section 9 of the Coking Coal Mines (Nationalisation) Act, 1972 is in pari materia with the provisions of Section 5 of said Act.
The Madhya Pradesh High Court in National Textile Corporation Limited, Bhopal v. M.P. Electricity Board, Jabalpur, reported in A.I.R. 1980 M.P. page 32 also took the view which I have taken.
In fine, it must be held that the demands made by the respondent Nos. 3 and 5 and as contained in their letters dated 28-1-1975, 3-12-1979 and 2-7-1982 as contained in Annexures 1, 4 and 6 must be quashed.
21. In the result, this writ application is allowed and the demands as contained in Annexures 1, 4 and 6 are hereby quashed and the respondents are hereby directed to forbear from giving effect to or acting pursuant to or in furtherance of the said purported orders and further from taking any step(s) to realise the aforementioned amount of Rs. 17,585.97 paise from the petitioner. There shall, however, be no order as to costs.