Andhra HC (Pre-Telangana)
Electronics Corporation Of India ... vs Union Of India Represented By ... on 13 March, 2018
Author: Ramesh Ranganathan
Bench: Ramesh Ranganathan
THE HONBLE THE ACTING CHIEF JUSTICE SRI RAMESH RANGANATHAN,THE HONBLE SRI JUSTICE V.RAMASUBRAMANIAN,AND THE HONBLE SRI J
WRIT PETITION NOS.9482 OF 2017 and batch
13-03-2018
Electronics Corporation of India Limited Petitioner.. Petitioner
Union of India represented by Secretary, Revenue and another Respondents
Counsel for petitioner : Sri C.V.Narasimha
Counsel for respondents: Sri B.Narasimha Sarma,
Sri M.V.J.K.Kumar and
Sri Vinod Kumar Tadakamalla
<Gist:
>Head Note:
? CASES REFERRED:
1. 2015 (319) ELT 51 (AP)
2. 2016 (41) S.T.R. 20 (A.P.)
3. 2008 (221) ELT 163 (SC) = (2008) 3 SCC 70
4. 2015 (326) ELT 532 (Gujarat.)
5. AIR 1958 SC 956
6. AIR 1980 SC 1789
7. (1997) 3 SCC 261
8. 2016 (344) E.L.T. 148 (Kar.)
THE HONBLE THE ACTING CHIEF JUSTICE SRI RAMESH
RANGANATHAN,
THE HONBLE SRI JUSTICE V.RAMASUBRAMANIAN,
AND
THE HONBLE SRI JUSTICE SANJAY KUMAR
WRIT PETITION NOS.9482 AND 9485 OF 2017
C O M M O N O R D E R
(Per Sri Justice Sanjay Kumar) The reference made by a Division Bench comprising one of us, SK,J, and another learned Judge, vide order dated 04.08.2017 in these writ petitions, led to the constitution of this Full Bench. The question raised before us is whether the decisions of this Court in M/s. RESOLUTE ELECTRONICS PVT. LTD. V/s. UNION OF INDIA and STAR ENTERPRISES V/s. JOINT COMMISSIONER, GUNTUR , require reconsideration. By these decisions, a Division Bench of this Court had held that a writ petition under Article 226 of the Constitution would not lie against an Order-in-Original passed under the Central Excise Act, 1944 (for brevity, the Act of 1944), once the statutory remedy of appeal against the said order stood foreclosed by the law of limitation.
In the cases on hand, Electronics Corporation of India Limited, the writ petitioner, was visited with two Orders-in-Original dated 21.10.2014 passed by the Assistant Commissioner of Customs and Central Excise, Hyderabad, holding it liable to pay interest under Section 11AA of the Act of 1944. These orders are sought to be challenged in the present writ petitions. W.P.No.9482 of 2017 relates to the Order-in-Original No.4/2014-PA levying interest for the years 2009-10 and 2010-11, while W.P.No.9485 of 2017 pertains to the Order-in-Original No.2/2014-PA levying interest for 2008-09.
These Orders-in-Original dated 21.10.2014 were appealable under Section 35 of the Act of 1944 but as per the said provision, such appeals had to be filed within sixty days ordinarily and the appellate authority was empowered to condone delay only up to thirty days thereafter, provided sufficient cause was shown. Admittedly, the petitioner company filed appeals impugning the Orders-in-Original dated 21.10.2014 long after the prescribed period. The appeals were filed by it only on 02.02.2016 along with applications to condone the delay. By separate orders dated 31.05.2016, the Commissioner (Appeals) opined that he could not condone the delay beyond the prescribed extended period of thirty days and dismissed the appeals on the ground of limitation. The petitioner company thereupon preferred appeals before the jurisdictional Customs, Excise & Service Tax Appellate Tribunal (hereinafter, the Tribunal). By common order dated 03.01.2017, the Tribunal affirmed the orders of the Commissioner (Appeals) opining that there was no infirmity therein, as per the law laid down by the Supreme Court in SINGH ENTERPRISES V/s. COMMISSIONER OF CENTRAL EXCISE, JAMSHEDPUR . The petitioner company then filed these writ petitions assailing the Orders-in-Original dated 21.10.2014.
While so, in the light of the above referred judgments of a co-ordinate Bench holding to the effect that a writ petition would not lie in these circumstances but taking note of a contrary judgment of a Full Bench of the Gujarat High Court in PANOLI INTERMEDIATE (INDIA) PVT. LTD. V/s. UNION OF INDIA , the aforestated Division Bench made the reference on the question of maintainability of these writ petitions.
Be it noted that the decisions in M/s. RESOLUTE ELECTRONICS PVT. LTD.1, and STAR ENTERPRISES2 were rendered by a Division Bench comprising the then Honble The Chief Justice and one of us, SK,J. In both those cases, the writ petitioners had unsuccessfully availed the appellate remedy but were turned down on the ground that their appeals were time-barred. They thereupon challenged the original orders directly before this Court.
However, Sri C.V.Narasimham, learned counsel for the petitioner company, would contend that the plenary power of this Court to issue writs under Article 226 of the Constitution cannot be fettered by the bar of limitation prescribed under the Act of 1944 in relation to entertainment of appeals thereunder. Learned counsel would argue that a blanket proposition holding that no writ petition would lie under any circumstances when the remedy of appeal under the Act of 1944 is barred by limitation would leave the aggrieved party totally remediless even in deserving cases. He would further submit that the view taken in M/s. RESOLUTE ELECTRONICS PVT. LTD.1 and STAR ENTERPRISES2 that when orders of the appellate authority/Tribunal are not subjected to challenge, it would not be open to the writ Court to entertain an independent challenge against the Order-in-Original which stood confirmed by the dismissal of such appeals, also requires reconsideration as the dismissal of such appeals would not be on the merits of the matter but based on the procedural technicality of such appeals being time-barred.
It would be apposite to note the statutory scheme of the Act of 1944 in this regard: Section 35(1) thereof states that any person aggrieved by any decision or order passed under the said Act by a Central Excise Officer lower in rank to a Principal Commissioner of Central Excise or Commissioner of Central Excise may appeal to the Commissioner of Central Excise (Appeals) within sixty days from the date of communication to him of such decision or order. The proviso thereto states that the Commissioner (Appeals) may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforestated period of sixty days, allow it to be presented within a further period of thirty days.
Presentation of such an appeal beyond the time prescribed in the aforestated provision fell for consideration before the Supreme Court in SINGH ENTERPRISES3. In that case, the Commissioner (Appeals), Central Excise and Service-tax, Ranchi, had dismissed the appeal filed beyond the time stipulated in Section 35(1) of the Act of 1944 on the ground of limitation. The said order was challenged by way of a writ petition before the Jharkhand High Court. The High Court held that as the Commissioner had no power of condonation beyond the statutorily prescribed period, no interference was warranted. In appeal, the Supreme Court opined that the Commissioner of Central Excise (Appeals), being a creature of the statute, was vested with jurisdiction to condone the delay beyond the permissible period provided under the statute but the period up to which such condonation could be accepted was also statutorily provided. The Supreme Court pointed out that the proviso to Section 35(1) made the position crystal clear that the appellate authority has no power to allow the appeal to be presented beyond the further period of thirty days. The Supreme Court accordingly upheld the decision of the High Court.
In M/s. RESOLUTE ELECTRONICS PVT. LTD.1, the Division Bench took note of the fact that the orders of the appellate authority and the Tribunal were not challenged before it and observed that the petitioner, after exhausting all the remedies, had filed the writ petition. The Division Bench opined that the petitioner, with its eyes open, allowed the period for preferring the appeal as well as for condonation of the delay to expire, thereby frittering away its own remedy, and was therefore responsible for creation of the situation of being remediless. The Division Bench further held that the provisions of Section 35(1) of the Act of 1944 were rigid and once the period thereunder was allowed to expire, intentionally or unintentionally, then the remedy would be absolutely barred and no Court of law could entertain the matter.
In STAR ENTERPRISES2 also, the orders of the appellate authority and the Tribunal were not assailed. Referring to its earlier decision in M/s. RESOLUTE ELECTRONICS PVT. LTD.1, the same Bench observed that the conclusion recorded therein was in consonance with SINGH ENTERPRISES3. The Division Bench observed that the issue was whether, after availing of the remedy unsuccessfully before another forum, this Court could accept a challenge under writ jurisdiction to the self-same order, which had reached finality. The Division Bench opined that it was not legally permissible, as the writ Court would then unsettle a legally settled position. It was further observed that when the appellate authority had already decided the matter against the petitioner, the writ Court would be debarred from doing so and the same would bind the writ Court, applying the principle of res judicata, particularly, when the appellate authorities orders were not challenged in writ jurisdiction.
At this stage we may note, with due respect, that absence of challenge to the orders of the appellate authority and the Tribunal in the circumstances obtaining cannot be a factor for non-suiting the petitioner company. It must be kept in mind that dismissal of the appeals by the appellate authority and, thereafter, by the Tribunal, was only on the ground of limitation and not on the merits of the matter. A decision based purely on technicalities would not be binding on the writ Court on the strength of the principle of res judicata. Further, as the fate of the appeals, be it before the appellate authority or the Tribunal, was already sealed owing to the limitation prescribed under Section 35(1) of the Act of 1944, they were, in reality, no longer effective appellate remedies available to the petitioner company. Failure to challenge the said orders would therefore not impact the maintainability of the present writ petitions filed only against the Orders-in-Original.
We have dealt with this issue though it does not find mention in the reference order as it was also cited as a ground for dismissal of the writ petitions in M/s. RESOLUTE ELECTRONICS PVT. LTD.1 and STAR ENTERPRISES2.
As the remedy of appeal to the Commissioner (Appeals) is provided under Section 35(1) of the Act of 1944, invocation of such remedy would invariably be subject to the restrictions prescribed in the statute. However, the fundamental issue is whether, when such an appellate remedy stands foreclosed against an Order-in-Original because the appeal is time-barred in terms of the limitation prescribed in the statute, the said Order-in-Original would also be immune to judicial review by this Court in exercise of its extraordinary writ jurisdiction under Article 226 of the Constitution.
In our considered opinion, the Constitutional power of judicial review vesting in this Court under Article 226 cannot be whittled down or be made subject to statutory restrictions and parameters prescribed in the context of the remedies provided thereunder. It is only by way of self-imposed restraints that this Court sometimes refuses to exercise its discretionary jurisdiction under Article 226 of the Constitution in a given case.
As long back as in the year 1958, in IN RE THE KERALA EDUCATION BILL, 1957 (SPECIAL REFERENCE NO.1 OF 1958) , the Supreme Court observed that any law which seeks to take away or restrict the jurisdiction of the High Court under Article 226 must be held to be void as the most important power given to the High Court by the Constitution is under Article 226. In MINERVA MILLS V/s. UNION OF INDIA , the Supreme Court characterized the power of judicial review conferred upon the High Court by Article 226 of the Constitution as part of the basic structure and held that it could not be abrogated without affecting the basic structure. In L.CHANDRA KUMAR V/s. UNION OF INDIA , the Supreme Court reiterated that writ jurisdiction conferred upon the High Court under Article 226 of the Constitution is part of the inviolable basic structure of the Constitution.
In this regard, it may also be noted that the Tribunal traces its origin to Article 323B of the Constitution. Exercise of writ jurisdiction under Article 226 vis--vis the subject matter of adjudication before Special Tribunals constituted under Article 323B of the Constitution fell for consideration before the Supreme Court in L.CHANDRA KUMAR7. Holding that such Tribunals were not substitutes for the writ Court exercising jurisdiction under Article 226 of the Constitution, a Constitution Bench of seven Judges again reiterated that the power of judicial review vesting in the High Court under Article 226 is integral to and an essential feature of the Constitution, forming part of its basic structure.
We find that in PANOLI INTERMEDIATE (INDIA) PVT. LTD4, a Full Bench of the Gujarat High Court had occasion to consider the issue of maintainability of a writ petition in identical circumstances. The matter went before the said Full Bench upon reference of the following questions by a Division Bench of that Court:
(i) Whether the period of limitation provided of 60 days, for filing an appeal under Section 35 of the Central Excise Act, 1944, could be extended only up to 30 days as provided by the proviso or the delay beyond the period of 90 days could also be condoned in filing an appeal?
(ii) Where a statutory remedy or appeal is provided under Section 35 of the Central Excise Act, 1944 and the delay cannot be condoned under Section 35 beyond the period of 90 days, then whether Writ Petition under Article 226 of the Constitution of India would lie for the purpose of condoning the delay in filing the appeal?
(iii) When if the statutory remedy or appeal under Section 35 is barred by the law of limitation whether in a Writ Petition under Article 226 of the Constitution of India, the order passed by the original adjudicating authority could be challenged on merits?
On a comprehensive consideration of all issues, factual and legal, the Full Bench opined that no piece of legislation, including Section 35 of the Act of 1944, could whittle down or dilute or nullify the power of the High Court under Article 226 of the Constitution but added the rider that exercise of extraordinary jurisdiction thereunder should be in cases where the Tribunal or the authority acted without jurisdiction or in excess of jurisdiction or in flagrant disregard of the law or the rules of procedure or in violation of the principles of natural justice, thereby resulting in failure of justice. The Full Bench cautioned that writ jurisdiction should not be converted into appellate jurisdiction resulting in re-appreciation of evidence or correction of errors, where two views are possible.
Referring to SINGH ENTERPRISES3, the Full Bench observed that the issue as to whether Section 35 of the Act of 1944 affects the jurisdiction of the High Court under Article 226 of the Constitution was not considered therein. It was further observed that it would always be open to the High Court to decline to exercise power under Article 226 of the Constitution in a given case after expiry of the permissible condonable period of 30 days, if the case did not fall in any of the exceptional categories where gross injustice is satisfactorily demonstrated.
The Full Bench finally answered the reference as under:
(1) Question No.1 is answered in negative by observing that the limitation provided under Section 35 of the Act cannot be condoned in filing the appeal beyond the period of 30 days as provided by the proviso nor the appeal can be filed beyond the period of 90 days.
(2) The second question is answered in negative to the extent that the petition under Article 226 of the Constitution would not lie for the purpose of condonation of delay in filing the appeal.
(3) On the third question, the answer is in affirmative, but with the clarification that (A) the petition under Article 226 of the Constitution can be preferred for challenging the order passed by the original adjudicating authority in following circumstances that (A.1) The authority has passed the order without jurisdiction and by assuming jurisdiction which there exist none, or (A.2) Has exercised the power in excess of the jurisdiction and by overstepping or crossing the limits of jurisdiction, or (A.3) Has acted in flagrant disregard to law or rules or procedure or acted in violation of principles of natural justice where no procedure is specified.
(B) Resultantly, there is failure of justice or it has resulted into gross injustice.
We may also sum up by saying that the power is there even in aforesaid circumstances, but the exercise is discretionary which will be governed solely by the dictates of the judicial conscience enriched by judicial experience and practical wisdom of the judge.
We find ourselves in complete agreement with the views expressed by the Full Bench in the aforestated decision.
The ratio laid down in the said decision was followed by the Karnataka High Court in PHOENIX PLASTS CO. V/s.
COMMISSIONER OF CENTRAL EXCISE (APPEAL-I), BANGALORE .
It is therefore manifest that the power of judicial review vesting in this Court under Article 226 of the Constitution cannot be diluted or shut out by applying statutory prohibitions and restrictions. In consequence, the observations of the Division Bench in M/s. RESOLUTE ELECTRONICS PVT. LTD.1 and STAR ENTERPRISES2 that no Court of law, including the High Court in exercise of its jurisdiction under Article 226 of the Constitution, can entertain the matter when the statutory appellate remedy under the Act of 1944 is barred by limitation and that the writ Court is debarred from entertaining a challenge to the Order-in-Original which has attained finality, by applying the principle of res judicata, do not constitute good law.
That being said, as rightly pointed out by Sri B.Narasimha Sarma, Sri M.V.J.K.Kumar and Sri Vinod Kumar Tadakamalla, learned counsel for the Revenue, entertainment of a writ petition against an Order-in-Original in circumstances such as are obtaining presently cannot be for the mere asking. The High Court would necessarily take note of the fact that the writ petitioner who seeks to assail the validity of such an Order-in-Original lost out on invocation of appellate remedies due to delay, intentionally or otherwise, and exercise its discretion judiciously on the facts of that individual case to decide as to whether challenge made by such a writ petitioner should be entertained. The length of the delay on the part of the petitioner in filing a writ petition may be one of the crucial factors that would weigh with the Court as it would not be open to a person aggrieved by an Order-in-Original to sleep over the same for years together and then seek to challenge it. Further, various other aspects on facts may also weigh upon the writ Court in deciding whether or not the writ petition should be entertained. Some of the parameters have already been indicated by the Full Bench of the Gujarat High Court in PANOLI INTERMEDIATE (INDIA) PVT. LTD.4 to the effect that this Court would be guided by the nature of the challenge, viz., that the authority had passed an order without jurisdiction or by assuming jurisdiction when there exists none or has exercised power in excess of jurisdiction or overstepping the limits of such jurisdiction or has acted in blatant disregard of the law or rules of procedure or in violation of the principles of natural justice where no such procedure is specified.
Ultimately, what would weigh with this Court is whether gross injustice would result from non-consideration of the challenge sought to be laid against the Order-in-Original. It is for the Court to decide, on the facts of each individual case, as to whether it should entertain the writ petition or not and this discretion cannot be shackled at this stage by laying down any straightjacket formula or conditions.
In the result, the reference is answered holding that the decisions in M/s. RESOLUTE ELECTRONICS PVT. LTD.1 and STAR ENTERPRISES2 do not constitute good law. A writ petition would lie against an Order-in-Original, against which an appeal was filed and dismissed as time-barred or no appeal had been preferred as it would have been time-barred, provided sufficient grounds are made out warranting exercise of the power of judicial review under Article 226 of the Constitution. In this regard, it would also not be necessary for the writ petitioner to assail the orders, if any, dismissing his appeals as time-barred, be it by the appellate authority or the Tribunal, in the event he chose to invoke such appellate remedies.
The writ petitions shall be placed before the appropriate Court for further consideration on merits in the light of the observations made supra. The reference stands answered accordingly.
RAMESH RANGANATHAN,J _______________________________ V.RAMASUBRAMANIAN,J ___________________________ SANJAY KUMAR,J 13th MARCH, 2018