Punjab-Haryana High Court
M/S Century Knitters (India) Ltd. And ... vs Union Of India And Others on 14 February, 2013
Bench: Ajay Kumar Mittal, G.S. Sandhawalia
CWP No.10750 of 2012 (O & M) ::1::
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
CWP No.10750 of 2012 (O & M)
Date of Decision: February 14, 2013
M/s Century Knitters (India) Ltd. and others
....Petitioners
Versus
Union of India and others
.... Respondents
CORAM: HON'BLE MR. JUSTICE AJAY KUMAR MITTAL
HON'BLE MR. JUSTICE G.S. SANDHAWALIA
Present: Mr. Rajiv Atma Ram, Sr. Advocate,
with Mr. Jagmohan Bansal, Advocate,
Mr. Deepak Gupta, Advocate, and
Ms. Shivali Jain, Advocate, for the petitioners.
Mr. Satish Aggarwala, Advocate,
and Mr. Sunish Bindlish, Advocate,
for respondents No.1, 2 and 4.
Mr. Kamal Sehgal, Advocate, for respondent No.3.
****
AJAY KUMAR MITTAL, J.
CM No.1999-CWP of 2013 Written submissions on behalf of respondents No.1, 2 and 4 filed along with the application are taken on record subject to all just exceptions.
C.M. application stands disposed of.
CM No.10837-CWP of 2013 Documents (Annexures P-1 and P-2) filed along with the application are taken on record subject to all just exceptions.
C.M. application stands disposed of.
CM No.12179-CWP of 2013 Written statement filed on behalf of respondent No.3 along with the application is taken on record subject to all just exceptions.
C.M. application stands disposed of.
CWP No.10750 of 2012 (O & M) ::2::
CWP No.10750 of 2012
The petitioners have approached this Court by way of present writ petition filed under Articles 226/227 of the Constitution of India wherein following prayers have been made:
"(i) Writ of Certiorari quashing the Panchnama dated 30.04.2012 (Annexure P-8) and dated 01.05.2012 (Annexure P-9) whereby the respondent has detained two containers of the petitioners lying at Inland Container Depot, New Delhi and direct the respondent to permit export thereof;
(ii) Writ of mandamus directing the respondent to return a sum of `10.00 Crores illegally recovered from the petitioners;
(iii) Direct the respondent to return passport of Managing Director of the petitioners and record of the petitioners;
(iv) Not to take any coercive action against Directors of the petitioners during investigation;
(v) Direct CBI enquiry into the above incidents; and
(vi) Petitioners be exempted from filing certified
copies of the Annexures, permitted to file
photocopy/computer printout of Annexures in font and size as enclosed;
(vii) Pass such or similar order as deem fit in the peculiar facts and circumstances of the case;
It is further prayed that during the pendency of the present petition, the Hon'ble court may be pleased to direct the respondents to:
(a) Return passport of petitioner No.3;
(b) Permit export of detained containers;
(c) Supply copies of seized documents; &
(d) Return cheques issued by third parties in favour of the petitioners;"
CWP No.10750 of 2012 (O & M) ::3::
2. Learned counsel for the petitioners submitted that except for the prayer for return of `10 Crores illegally recovered from the petitioners, the other reliefs have been rendered infructuous and are not being pressed in view of various interim orders passed by this Court from time to time during the pendency of the writ petition.
3. Learned counsel for the petitioners with reference to return of `10 Crores submitted that respondent No.2-Directorate of Revenue Intelligence (for short 'the DRI') had got this amount forcibly under coercion deposited on 26th April, 2012 and this amount is liable to be returned as there is no existing liability outstanding against the petitioners. It was further submitted that only one show cause notice has been issued with respect to the consignment which was lying at Inland Container Depot, New Delhi for which the maximum liability for about `50 lacs could be fastened and, in such a situation, retention of `10 Crores was unjustified.
4. Reliance was placed upon the following observations of the Division Bench of this Court in Bhagwati International Versus Union of India, 2005(190) ELT 300 (P & H):-
"3. We have heard Counsel for the parties. The learned counsel appearing for the Department strenuously contends that as and when the demand against the petitioners is finalized the amount of Rs.50 lacs deposited by them in June, 1999 will be adjusted against that demand and, therefore, this court should not direct the respondents to refund the aforesaid amount of Rs.50 lacs to the petitioners. We are unable to agree with the learned counsel. Since the adjudicating authority has not yet determined any amount as due which is payable by the petitioners, there is no justification for the Department to retain the sum of Rs.50 lacs which was admittedly deposited by the petitioners way back in June, 1999. If and when any CWP No.10750 of 2012 (O & M) ::4::
demand is created, it will be open to the Department to recover the same from the petitioners in accordance with law. We, therefore, allow the writ petition and direct the respondents to refund the sum of Rs.50 lacs to the petitioners along with interest at the rate of 9% per annum from the date of deposit till the date of its return. The needful must be done within three months from the date of receipt of a copy of this order."
Reference was also made to Paras 11 to 13 in M/s Century Metal Recycling Pvt. Ltd. versus Union of India 2009(234) ELT 234 (P & H), which reads thus:-
"11. The questions for consideration are whether the search and seizure was called for, whether the petitioners were entitled to refund of the amount deposited and whether the conditions for provisional release of seized goods are valid.
12. Since the matter is under investigation, which respondents have undertaken to conclude within one month, we do not consider it necessary to express any opinion at this stage on the validity or otherwise of search and seizure.
13. As far as the amount deposited by the petitioners is concerned, case of the petitioners is that the same was deposited under coercion. Case of the respondents was that the same was deposited voluntarily. Whatever be the position, unless there is assessment and demand, the amount deposited by the petitioners cannot be appropriated. No justification has been shown for retaining the amount deposited, except saying that since it was voluntarily deposited. In view of this admitted position, the petitioners are entitled to be returned the amount paid."
5. While opposing the prayer of the petitioners, learned counsel for the respondents No.1, 2 and 4 submitted that the petitioners were not CWP No.10750 of 2012 (O & M) ::5::
entitled for the return of the aforesaid amount in view of the Constitution Bench Judgment in Suganmal versus State of M.P. and others, AIR 1965 SC 1740 as the writ petition itself was not competent. It was urged that the petitioners had voluntarily deposited the amount on 26th April, 2012 and, thus, there was no occasion for the petitioners to seek return of the same in the absence of any changed circumstances. Learned counsel further submitted that the aforesaid amount is required to be retained to safeguard the interest of the revenue. It was also pointed out that a show cause notice has been issued and further investigations and proceedings against the petitioners are going on in which the liability to the tune of `60 Crores could be fastened on the petitioners. It was also contended that if interest and mandatory penalties are also added to the aforesaid amount, the total liability would be of about `100 to 120 Crores.
6. In rebuttal, learned Senior counsel for the petitioners placed reliance upon U.P. Pollution Control Board and others versus Kanoria Industrial Limited and another, (2001)2SCC 549, ABL International Limited and another versus Export Credit Guarantee Corporation of India Limited and others, (2004)3SCC 553 and Godavari Sugar Mills Limited versus State of Maharashtra and others, (2011)2SCC 439 to controvert that the Hon'ble Apex Court distinguishing the Constitution Bench judgment in Suganmal's case (supra), has noticed that though normally writ of mandamus would not be entertained for the purpose of merely ordering of refund of money but the High Court had the powers to pass appropriate orders in exercise of jurisdiction under Article 226 of the Constitution of India in appropriate cases.
7. Learned counsel for the petitioners on instructions from Sh. Rajesh Dhanda, husband of Smt. Seema Dhanda, as she is the owner CWP No.10750 of 2012 (O & M) ::6::
of the immovable property in the shape of plot situated at village Baranhara, near Goudham, Ludhiana, having approximately value of `3 Crores, pointed out that Sh. Rajesh Dhanda is authorized to make a statement on behalf of his wife and his wife shall be bound by the statement made by him. It was further submitted that in order to safeguard the interest of the revenue, petitioner No.3 has agreed for retaining of an amount of `2 Crores by the revenue till the finalization of the proceedings in pursuance to show cause notice issued by the revenue in which only a liability of approximately `50 lacs could be fastened. It was also accepted that immovable property of plot valuing approximately `3 Crores belonging to the wife of petitioner No.3 which is free from all encumbrances as on date, would also not be alienated or any encumbrance would be created by the petitioners for a period of one year, during which, a direction may be issued to the respondents to conclude all proceedings in respect of on going investigations, if any, or show cause notice which has been issued.
8. In view of the above, it is directed that the plot in respect of which Sh. Rajesh Dhanda, husband of Smt. Seema Dhanda has made a statement, no encurmbrance shall be created or the aforesaid property shall not be alienated for a period of one year i.e. till 31st March, 2014 or till the finalization of the proceedings, whichever is earlier.
9. The objection of the respondents regarding maintainability of writ petition does not merit acceptance. Adverting to the judgment in Suganmal's case (supra), on which reliance has been placed by the learned counsel for the revenue, the Hon'ble Apex Court in Godavari Sugar Mills Limited's case (supra) distinguishing its earlier judgment in Suganmal's case (supra) has held that it is not in absolute terms that a CWP No.10750 of 2012 (O & M) ::7::
writ petition for refund/return of the amount would be barred under Article 226 of the Constitution. However, in appropriate case, the writ court keeping in view the facts and circumstances can pass order as deemed fit. The enunciation of legal position in Para 8 thereof reads as under:-
"8. The observations in Suganmal related to a claim for refund of tax and have to be understood with reference to the nature of the claim made therein. The decision in Suganmal has been explained and distinguished in several subsequent cases, including in U.P. Pollution Control Board v. Kanoria Industrial Ltd. and ABL International Ltd. v. Export Credit Guarantee Corpn. of India Ltd. The legal position becomes clear when the decision in Suganmal is read with the other decisions of this Court on the issue, referred to below:
(i) Normally, a petition under Article 226 of the Constitution of India will not be entertained to enforce a civil liability arising out of a breach of a contract or a tort to pay an amount of money due to the claimants. The aggrieved party will have to agitate the question in a civil suit. But an order for payment of money may be made in a writ proceedings. In enforcement of statutory functions of the State or its officers (vide Burmah Construction C. v. State of Orissa.).
(ii) If a right has been infringed--whether a fundamental right or a statutory right--and the aggrieved party comes to the Court for enforcement of the right it will not be giving complete relief if the Court merely declares the existence of such right or the fact that existing right has been infringed. The High Court, while enforcing fundamental or statutory rights, has the CWP No.10750 of 2012 (O & M) ::8::
power to give consequential relief by ordering payment of money realised by the Government without the authority of law. (Vide State of M.P. v. Bhailal Bhai.).
(iii) A petition for issue of writ of mandamus will not normally be entertained for the purpose of merely ordering a refund of money, to the return of which the petitioners claims a right. The aggrieved party seeking refund has to approach the civil court for claiming the amount though the High Courts have the power to pass appropriate orders in the exercise of the power conferred under Article 226 for payment of money. (vide Suganmal v. State of M.P.).
(iv) There is a distinction between cases where a claimant approaches the High Court seeking the relief of obtaining only refund and those where refund is sought as a consequential relief after striking down the order of assessment, etc. While a petition praying for mere issue of a writ of mandamus to the State to refund the money alleged to have been illegally collected is not ordinarily maintainable, if the allegation is that the assessment was without a jurisdiction and the taxes collected was without authority of law and therefore the respondents had no authority to retain the money collected without any authority of law, the High Court has the power to direct refund in a writ petition. (Vide Salonah Tea Co. Ltd. v. Supdt. of Taxes).
(v) It is one thing to say that the High Court has no power under Article 226 of the Constitution to issue a writ of mandamus for making refund of the money illegally collected. It is yet another thing to say that such power can be exercised sparingly depending on facts and circumstances CWP No.10750 of 2012 (O & M) ::9::
of each case. For instance, where the facts are not in dispute, where the collection of money was without the authority of law and there was no case of undue enrichment, there is no good reason to deny a relief of refund to the citizens. But even in cases where collection of cess, levy or tax is held to be unconstitutional or invalid, refund is not an automatic consequence but may be refused on several grounds depending on facts and circumstances of a given case. (Vide U.P. Pollution Control Board v. Kanoria Industrial Ltd.).
(vi) Where the lis has a public law character, or involves a question arising out of public law functions on the part of the State or its authorities access to justice by way of a public law remedy under Article 226 of the constitution will not be denied. (Vide Sanjana M. Wig. v. Hindustan Petroleum Corpn. Ltd.).
We are therefore of the view that reliance upon Suganmal was misplaced, to hold that the writ petition filed by the appellant was not maintainable.
10. Thus, taking totality of facts and circumstances noticed hereinabove and applying the principles enunciated by the Hon'ble Apex Court in Godavari Sugar Mills Limited's case (supra), it could not be said that writ petition was not maintainable. Contention of learned counsel for respondents No.1, 2 and 4 is thus rejected.
11. After hearing learned counsel for the parties and perusing the record, we find that as on date no crystalized liability has been shown to be existing against the petitioners. Further, only a show cause notice has been issued whereunder a liability to the extent of `50 lacs could be fastened. Insofar, as the matters which are under investigations, it has not been shown that any show cause notice in respect thereof has been issued CWP No.10750 of 2012 (O & M) ::10::
by the respondent-department so far.
12. It is trite law that unless a demand, which is finalized and is existing which is liable to be discharged, the revenue cannot retain any amount unless there exists specific provision in the statute for the retention of the amount.
13. On a specific query put to the learned counsel for the revenue relating to any provision in the statute on the basis of which the revenue could provisionally retain the amount, learned counsel for the revenue candidly admitted that there is no such provision to retain the amount except to refer to Section 42 of the Customs Act, 1962. Further, on a query as to whether any order requiring the petitioners to refund the duty draw back as canvassed by the revenue had been passed, learned counsel for the revenue was unable to show that there existed any such order or authorization from any competent authority. It was only urged that it was a disputed question of fact as to whether the amount was deposited voluntarily or under coercion. Be that as it may, whatever be the situation, the revenue cannot retain any amount to which it is legally not entitled to as the same would be violative of Article 265 of the Constitution of India.
14. In view of the above, while disposing of this petition, we direct the revenue to retain an amount of `2 Crores to safeguard its interest for being adjusted against any liability that might be created on the basis of investigations and/or show cause notice issued to the petitioners and return the balance amount of `8 Crores within a period of two weeks from the date of receipt of certified copy of the order. Needless to say that in case the liability on the basis of the investigations and/or show cause notice issued to the petitioners is less than the amount retained, the respondent shall return the balance amount immediately on finalization of those CWP No.10750 of 2012 (O & M) ::11::
proceedings. Further, the petitioners shall not create any encumbrance or alienate the plot belonging to Smt. Seema Dhanda referred to hereinabove till 31st March, 2014 or till finalization of proceedings whichever is earlier.
15. It is, however, clarified that the petitioners shall co-operate in the investigations and in deciding the show cause notice as well. It is further directed that the revenue shall make sincere efforts for completing the investigations and finalizing the proceedings on or before 31st March, 2014.
16. The present petition is disposed of accordingly. RA No.288-CWP of 2012 (O & M) In view of the decision of writ petition, learned counsel for the parties are agreed that the review petition has been rendered infructuous and may be disposed of as such.
Ordered accordingly.
(AJAY KUMAR MITTAL) JUDGE (G.S. SANDHAWALIA) JUDGE February 14, 2013 sukhpreet