Bombay High Court
Supra Dye Chem vs Union Of India on 1 January, 1800
Equivalent citations: 1990(49)ELT196(BOM)
JUDGMENT
1. The Petitioners have filed this Writ Petition praying for a Writ of Certiorari under Article 226 of the Constitution of India calling for the papers in respect of the Petitioners application for a licence addressed to Respondent No. 4 and, after going through the legality thereof, to pass appropriate orders for the issuance of the said licence. The Petitioners secondly pray for an Order directing the Respondents to issue the licence to the Petitioners. Thirdly the Petitioners pray that the Petitioners may be deemed to have been granted the licence by the 4th Respondent, in view of the fact that the application for such a licence had been made as far back as in 1982 and the Respondents had acknowledged receipt of the Petitioners application. By an amended prayer, the Petitioners have prayed for the refund of an amount of Rs. 9,93,637.39 together with interest from the date of payment made by the Petitioners till the date of refund by the Respondents.
2. By an Agreement dated 1-3-1982 between M/s. Jalan Dyeing and Bleaching Mills and M/s/ Supra Dye Chem of which one P. Murarka was the sole proprietor, the plant and machinery for manufacturing textile binders was leased by M/s. Jalan Dyeing and Bleaching Mills to M/s. Supra Dye Chem. By another Agreement of Assignment dated 24-7-1986, P. Murarka, the sole proprietor of M/s. Supra Dye Chem, transferred his right, title and interest under the Agreement dated 1-3-1982 to Bharat Dharamchand Jalan, the present Petitioner. M/s/ Supra Dye Chem applied for a licence from the central Excise Authorities on 15-6-1982.
3. The Petitioners filed a declaration giving the Tariff Item manufactured by them as Tariff Item No. 15AI(ii). The Petitioners relied on Notification No. 83/83-CE dated 1-3-1983 under which, in the case of first clearance, specified goods upto an aggregate value not exceeding Rs. 5,00,000/- were exempt from the whole of the duty of excise leviable under Section 3 of the Central Excises and Salt Act, 1944. According to the Petitioners, since their production was within the value of Rs. 5,00,000/-, they were exempt from payment of excise duty on textile binders. Although the Petitioners predecessors had applied for a licence under Treasury Challan No.6013 dated 15-6-1982 and had complied with all the requirement and necessary formalities, no licence was issued by the Respondents to the Petitioners.
4. By a letter dated 7-5-1984 addressed by the Petitioners predecessors to the Superintendent of Central Excise, the Petitioners predecessors demanded the refund of the excise duty paid under protest for the period from May, 1982 to March, 1984. The Respondents, however, failed to reply to this letter as also to refund the amount of excise duty. On 25-9-1986, the Collector of Central Excise searched the Petitioners factory premises and seized certain goods and records. On 5-11-1986, the Respondents addressed a show-cause notice dated 4-11-1986 to the Petitioners under which the Petitioners, along with three other concerns, were called upon to show cause why duty to the of Rs. 8,08,568.82 should not be levied and recovered under Rule9(2) of the Central Excise Rules, 1944 and under Section 11A of the Central Excises and Salt Act, 1944. The Respondents also called upon the Petitioners to show cause why penalty should not be imposed on them under Rule 9(2) and/or 173Q and/or 226 of the Central Excise Rules, 1944 for carrying on production without licence.
5. The Petitioners in their Petition contend that although they had applied for a licence from Respondent No. 4 as far as back as in 1982, no reply had been received from Respondent No. 4. The Petitioners stated that under the new licensing policy and the simplified procedure, postal acknowledgment of the application for licence would be deemed to be an issuance of licence. The Petitioners stated that they had paid the excise ,duty under protest and thus they were entitled to the refund of the excise duty paid by them.
6. Shri Bhatia, the learned Government Pleader appearing on behalf of the Respondents, has raised a preliminary point with regard to the maintainability of the Petition. Shri Bhatia pointed out that in the instant case a show cause notice had been issued to the Petitioners on 5-11-1986. Proceedings had been initiated by the Collector of Central Excise against the Petitioners and the Collector of Central Excise, by his order dated 31-1-1989, held that the Petitioners concern was a dummy unit created in 1986 by M/s. Jalan Dyeing and Bleaching Mills Ltd. Secondly, an order of confiscation was passed and excise duty was levied. A penalty of Rs. 5,00,000/- was also levied on M/s. Jalan Dyeing and Bleaching Mills Ltd. Shri Bhatia pointed out that the Petitioners had filed an Appeal against the said Order of the Collector of Central Excise before the customs, Central Excise and Gold Control Appellate Tribunal, which was pending disposal. Shri Bhatia contended that in view of the fact that the Petitioners` Appeal was pending before the Appellate Tribunal, the present Petition was not maintainable. In support of his submission, Shri Bhatia has relied on a ruling of the Division Bench of this Court in the case of Garware Plastics and Polyester Ltd. v. Union of India, 1986 (24) E>L>T> 449 to the effect :-
"Our Supreme Court in Assistant Collector of Central Excise, Chandan Nagar, West Bengal v. Dunlop India Ltd. and others- the admonition that Article 226 is not meant to short circuit or circumvent statutory procedures. Exceptions have been carved out, namely, that where statutory remedies are entirely ill-suited to meet the demands of extraordinary situations, as for instance, where the very vires of the statute is in question or where private or public wrongs are so inextricably mixed up and the prevention of public injury and the vindication of public justice require it that recourse may be had to article 226 of the Constitution. The Court went on to caution that in bypassing the alternative remedy provided by statute, good and sufficient reason must be shown and that matters involving the revenue where statutory remedies are available are not such matters."
7. Shri Bhatia then relied on a decision of a learned Single Judge of this Court in the case of Purshottam Thackersey v. Anantrama Ayyar, (1985) 154 I.T.R. 395 wherein it was held that it was improper for an assessee to prosecute two remedies simultaneously and the write jurisdiction could not be exercised to investigate the correctness of the order passed under Section 18(1)(c) of the Wealth Tax Act, 1957 when an appeal against the said order was pending before the Tribunal. Relying on the observations cited above, Shri Bhatia submitted that the present Petition was not maintainable in view of the fact that an Appeal before the Tribunal was pending. Shri Doctor, learned Counsel appearing for the Petitioners, submitted that that the preliminary objection was not tenable for the reason that the decision of the Appellate Bench, reported in 1986 (24) E.L.T. 449 referred heretofore, was on the footing that the show-cause notice and the proceedings pursuant thereto had been impuged and it was on those facts that the Division Bench had ruled that if an alternative remedy was available, then a Writ Petition was not maintainable. In the Present Petition the issue was with regard to the refund of the duty paid by the Petitioners under protest. Hence the Petition was maintainable.
8. Now, it appears to me that the submission made by Shri Doctor cannot be sustained for the reason that the show-cause notice and the proceedings before the Collector of Central Excise involved an issue whether the Petitioner-firm was one of the three bogus firms which had been brought into existence by M/s. Jalan Dyeing and Bleaching Mills. That issue was answered in the affirmative by the Collector of Central Excise by his Order dated 31-1-1989. Once the Petitioner-firm was held to be a fictitious firm, then the Petitioners cannot pray for the issue either of a licence or for refund. The issues, therefore, in the present Petition are materially and substantially the same as those involved in the proceedings before the Collector of Central Excise as also the issues which will be agitated in the appeal now pending before the Tribunal. In this view of the matter, I therefore, hold that the present Petition is not maintainable.
9. Shri Doctor then submitted that even if the Court was inclined to dismiss the petition on the ground that it was not maintainable, the Court should order on the petition that pending the disposal of the Appeal before the Tribunal and for four weeks thereafter, the Petitioners bee allowed to clear the goods on payment of duty under protest and in the event of the Petitioners finally succeeding in the Tribunal, the Petitioners would be at liberty to make an application for refund, which will be considered by the relevant Authorities according to law. Alternatively, Shri Doctor prayed that the Petition be adjourned till after the disposal of the Appeal pending before the Tribunal.
10. I do not think that once the Petition is dismissed on the ground of maintainability, I can pass an Order in terms sought for by learned Counsel. To pass such an Order would mean in essence that I would be continuing the Interim Order passed by this Court in terms of prayer (d). Further, to permit the Petitioners to clear the goods on payment of duty after dismissing the petition would mean that the Petitioners would be allowed to carry on the business without obtaining the licence from the appropriate Authority. For these reasons, I am unable to accede to the prayer of Shri Doctor for allowing the Petitioners to continue to clear the goods on payment of duty under protest,
11. With regard to the alternate prayer of Shri Doctor that the Petition be adjourned till after the disposal of the Appeal pending before the Tribunal, I see no reason for adjourning the matter after the same has been argued exhaustively by both learned Counsel.
12. Shri Doctor finally prayed that i should order the refund of duty paid by the Petitioners prior to 25the July, 1986 as no fraud was alleged prior to 1986. Once the Petition is dismissed on the ground of maintainability, I find it difficult to pass an Order with regard to the refund even if it be for the prior period when the firm's proprietor was P Murarka. In any event,m this question can also be agitated before the Tribunal by the Petitioners. I therefore, see no need for passing any order of refund at this stage.
13. In the result, rule stands discharged and the Petition dismissed. Each party will bear its own costs.
14. At the request of shri Doctor, the ad-interim order in terms of prayer (d) is extended till 12th March, 1990.