Gujarat High Court
Gaskets And Radiators Private Limited vs The Union Of India (Uoi) Through The ... on 24 April, 1980
Equivalent citations: 1980CENCUS445D
JUDGMENT
The plaintiffs sue for a declaration that the assessment of the goods and the recovery of excise duty amounting to Rs. 54,252.54 p. was made by the defendant without jurisdiction and against the fundamental provisions of law. The second relief prayed for by the plaintiffs is for recovery and refund of Rs. 54,252,54 p. The third relief claimed is of interest by way of damages towards the amount of refund. The plaintiffs also pray for costs. Short facts giving rise to the institution of this suit may be briefly stated as under:
1. The plaintiffs are manufacturers of various types of Motor Vehicles Parts and accessories falling under item No. 34-A of the 1st Schedule of Central Excise and Salt Act, 1944. The Motor Vehicle Parts and accessories manufactured by the plaintiffs are inter alia sold by the plaintiffs to the Vehicle Factory, "Indian Ordinance Factory" Jabalpur who are manufacturers of motor vehicles and who use the said parts and accessories as original equipment parts and accordingly, the parts and accessories so sold by the plaintiffs to the Vehicle Factory at Jabalpur are exempted from duty leviable under Item No. 34-A of notification No. 99/71 as amended from time to time.
2. A new Tariff Item No. 68, was introduced in the Central Excise Tariff as part of Annual Budget of Government of India on 1-3-1975. As a result certain goods were made assessable to duty at one per cent ad valorem. The Central Excise Officers visited plaintiffs' premises on 1-3-1975 and took stock of Motor Vehicle Parts and accessories lying with the plaintiffs. According to directions the plaintiff filed the classification list of Motor Vehicle Parts and accessories showing therein the rate of duty at one per cent under Item No. 68 of the Tariff which was approved by Superintendent of Central Excise on 17-3-75.
3. The Plaintiffs aver that the goods manufactured by them fall under Tariff Item No. 34-A and were exempted from duty by reason of notification No. 99/71 dated 29-5-71. However, the excise authorities recovered without jurisdiction duty at one per cent on the said goods on the wrong assumption that the goods fall under tariff Item No. 68. There-after, the plaintiffs wrote a letter dated 29-9-75 to defendant No. 3, informing him that the goods manufactured by them are motor vehicle parts and accessories falling under Tariff Item No. 34-A and therefore one per cent duty collected was illegal, which was not due to the Government. The defendant No. 3 on 16-2-1976, confirmed the views of the plaintiffs.
4. Then between 1st March, 1975 and 16th March, 1976 plaintiffs cleared motor vehicle parts and accessories, which were used by the Vehicle Factory at Jabalpur and paid an aggregate sum of Rs. 90,200.77. The plaintiffs there-fore applied to defendant No. 3, on 15-12-76 for a refund of the said amount. Therefore, the defendant No. 3, by the order dated 28-5-1977 admitted in principle that the amount of Rs. 90,200.72 p. which was recovered by the Government as not legal. However, he allowed the refund of Rs. 35,948.33 p. out of the total refund claim and the rejection of the claim was on the technical ground that the said claim was time barred under Rule 11 and 173 J of the Central Excise Rules, 1944. According to the plaintiffs the said amount of alleged duty of Rs. 54,252.34 p. was paid and recovered under mistake of law. Therefore, by Statutory Notice under Section 80 Civil Procedure Code, dated 18-3-1978, the plaintiffs demanded the suit claim, but the notice did not bring any fruits to the plaintiffs and hence the suit. Thus the relief claimed is of Rs. 54,252.34 p. being the Excise duty, illegally and unauthorisedly collected from the plain-tiffs, by the department of the defendant on the suit goods for the period from 1-3-1975 to 5-12-1975. Rs. 5,750/- are claimed by way of interest in the shape of damages at the rate of 6% for the period from 16-12-1975 to 15-3-1978. Thus the total suit claim is for Rs. 60,002.34 p. Out of which, Rs. 2.34 p. are not claimed, hence the suit is for Rs. 60,000/-. Originally the suit was brought by M/s. Ideal Structural Private Ltd., Bil Padra Road, Dist: Baroda. Subsequently, M/s. Gaskets & Radiators Pvt. Ltd. has been substituted as plaintiffs by order passed below Ex. 12 in the suit.
5. Vide Ex. 11, the defendants have filed W.S. denying the suit claim of the plaintiffs. Suit notice is challenged on the ground of the legal validity. The jurisdiction of this Court is also challenged. It is also contended that defendants Nos. 2 & 3 are not a corporate soles and have been wrongly impleaded as parties. It is also contended that the suit is filed beyond the period of limitation and is barred by way of limitation. It is specifically denied that the goods manufactured by the plaintiffs were under the Tariff Item No. 34-A and that they were exempted from the duty. It is further contended that the plaintiffs have not exhausted all the remedies under the Central Excise Act and hence the present suit deserves to be dismissed.
The substance of the defence and as mentioned in the W.S. is that the plaintiffs consequent to imposition of levy of Excise Duty is not legally entitled for refund of claim. Thus the defendants' say that the plaintiff's suit deserves to be dismissed with costs.
6. Following issues are raised at Ex. 13:
(1) Whether the plaintiffs prove that the defendant has illegally and unauthorisedly collected Rs. 54,252.34 p. by way of Excise duty as claimed in para 14 of the plaint ?
(2) Whether the plaintiffs are entitled to claim Rs. 5,750/- by way of interest as claimed in para 14 of the plaint ?
(3) Whether the plaintiffs are entitled to the declaration as prayed for in para 15 of the plaint ?
(4) Whether the plaintiffs have served the defendant with legal notice under Section 80 of C.P. Code ?
(5) Whether the plaintiffs' suit is barred by the law of limitation ?
(6) Whether the defendants Nos. 2 and 3 are the necessary parties?
(7) Whether this Court has no jurisdiction to hear this suit ?
(8) Whether the plaintiffs' suit is bad for having not exhausted all the remedies available under the provisions of the Central Excises and Salt Act, 1944 ?
(9) What order and decree ?
7. My findings on the above issues are as under:
(1) In the affirmative.
(2) In the affirmative.
(3) In the affirmative.
(4) In the affirmative.
(5) In the negative.
(6) In the affirmative.
(7) In the negative.
(8) In the negative.
(9) As per order passed.
Reasons Issue No. 4
8. The suit notice is produced at Ex. 21. It is served upon the defendant vide Registered A.D. The notice is given under Section 80 of Civil Procedure Code and it contains all the particulars of the claim. The date of suit is 19-6-78. It is therefore clear that on receipt of notice and on expiry of 60 days thereof the suit has been filed by the plaintiff against the defendant. Thus, it is clear that the suit notice is legal and proper. It is not shown otherwise, as to how the suit notice is illegal. Consequently, I hold that the suit notice is legal and valid.
Issue No. 6.
9. It was contended on behalf of the defendants that deft. No. 2, i.e. Collector of Central Excise, Baroda and deft. No. 3 Assistant Collector of Central Excise Division-II, Baroda are not necessary parties to the suit, as no relief can be granted against them. Appreciating this argument in the light of the papers produced on record, it appears that defendants Nos. 2 and 3 are the legal administrative heads and that the refund order was also passed by defendant No. 3. Thus, it will be seen that defendants Nos. 2 and 3 are necessary parties to the suit, where of refund order passed by defendant No, 3 who is Assistant Collector of Central Excise, thus the joining of defendant No, 3 as also defendant No. 2. the Collector of Central Excise is proper. Hence my finding on issue No. 6, is in the affirmative.
Issues Nos. 1 and 5:
10. As these issues arc inter-related, they are discussed together and disposed off simultaneously for the sake of convenience. As regards issue No. 1, the burden is on the pltff. to prove that the defendant Government has illegally and unauthorisedly collected Rs. 54,252.34 p. by way of excise duty on the suit goods from 1-3-75 to 15-12-75. So far as issue No. 5 is concerned there is a question of limitation to be decided by the Court. According to the plaintiff, the suit as filed is within the limitation, while according to the defendants the suit is time-barred. It will be seen that mainly it will depend on the decision of question of limitation that the ultimate result of the suit will be affected. Now, it is the case of the plaintiff that a New Tariff Item No. 68, was introduced in the Central Excise Tariff as part of Annual Budget of Government of India on 1-3-75 and as a result of which, "All other goods not elsewhere specified" were made assessable to duty at one per cent ad valorem. According to the plaintiff, this duty was paid; however, the goods manufactured by the plaintiff fell under Tariff Item No. 34-A and hence were exempted from duty by reason of notification No. 99/71 dated 29-5-71. Thus, it is the case of the plaintiff that their product was not chargeable by any duty under the exemption and therefore, whatever duty of Rs. 90,200.72 p. which was paid between first, of March 1975 and 16th of April, 1976, on the goods was recoverable from the defendants, hence the plaintiff applied on 15-12-76 for a refund. On 28-5-77 deft. No. 3 entertained this application and sanctioned refund of Rs. 35,948.38 p. out of the above total refund claim and rejected claim to the extent of Rs. 54,252.34p. on the ground that the said claim was time barred under Rule 11 read with Rule 173 (J) of the Central Excise Rules, 1944; so far these facts are concerned there is no dispute between the parties. At this stage it may be stated that none of the parties has led oral evidence on record, and they have passed purshis accordingly vide Exs. 1,2,3, and 28 respectively. Therefore, the real question of controversy between the parties is the question of limitation and a time barred claim as alleged by the defendants. Before I may go to consider this question on merits, it is necessary to refer to certain documents which are produced and admitted by the parties on record. Vide order passed below Ex. 12, the Original plaintiff the Ideal Structural Private Limited is merged with the Gaskets and Radiators Private Limited by virtue of the application given by the plaintiff on the ground that the original plaintiff in the suit has merged with the Gaskets and Radiators Private Limited w.e.f. 5th October 1979. On the ground of such a declaration having been made by the order passed by the Hon'ble High Court in the company petition No. 43 of 1979, connected with Company Application No. 124/79 and 125/79. Ex. 26, is a letter by the plaintiff on 29th September 1975 to the Assistant Collector, Central Excise, Baroda regarding the payment of levy of one per cent under Tariff Item No. 68, though covered by Tariff Item No. 34-A and as such clarification was requested for Ex. 14 is a letter dated 16-2-76 written by defendant No. 3 i.e. Assistant Collector of Central Excise to the plaintiff clarifying that the Motor Vehicle parts as mentioned and supplied to Indian Ordinance Factory at Jabalpur will not fall under Tariff Item No. 68 since they will be covered by Tariff Item No. 34-A as Motor Vehicle parts. It is further written in this letter for this purpose, the plaintiff would have to prove that the issues were for Motor Vehicle Parts whenever such an exemption was claimed. Then it appears that the classification list dated 16-3-75 produced at Ex. 27 was sent by the plaintiff to the defendants, on 17-5-1975 vide Ex. 15, the approval of classification list was made. Then the record reveals that on 15-12-76 the plaintiff wrote a letter for refund application vide Ex. 16, for a refund claim of Rs. 90,200.72 p. The appendix application for refund dated 15-12-76 is at Ex. 16-A. There is a list of month-wise amount of refund claimed produced at Ex. 16-B for the total refund of Rs. 90,200.72 p. starting from the month of March, '75 to April '76. Then there is an order Ex. 17, dated 29the May, 1977 passed by defendant No. 3, granting refund of Rs. 35,948.38 p. for the period from 16-12-'75 to 30-4-'76 the amount of Rs. 98.80 p. was rejected for which no claim is preferred in this suit. Along with this rejection of the claim, the remaining amount of Rs. 54,252.34 p. was also rejected on the ground it was a time barred claim under Rule 11 read with Rule 173(J) of the Central Excises and Salt Act 1944, Exs. 17A is defendant No. 3's letter forwarding a cheque on 31-54977 for Rs. 35,948.38 p. Vide Ex. 18, an extract of Central Excise Rules 11 and 173(J) is produced Ex. 30, is an extract of notification No. 99/'77 dated 29-5-'71 as admitted by both the sides. It runs as under
:
In exercise of the powers conferred by Sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government here-by exempts motor vehicle parts and accessories, falling under Item No. 34-A of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), other than those specified in the schedule hereto annexed, from the whole of the duty of excise leviable thereon.
THE SCHEDULE
1. Brake Linings. 7. Shock Absorbers.
2. Clutch Facings. 8. Sparking Plugs.
3. Engine Valves. 9. Thin-walled bearings.
4. Gaskets. 10. Tie rod ends.
5. Nozzles and Nozzle Holders. 11. Electric Horns.
6. Piston Rings.
Exs. 31, 32 and 33 are the amendments made from time to time by the Government with respect to the article for the product manufactured by the companies concerned for the purpose, of levying excise duty.
11. I have heard the arguments of learned Advocate Shri Anatani for the plaintiff and the learned Government Pleader Shri Zaveri for the defendant Government. There is no dispute about the fact that all the products which were manufactured by the plaintiff and supplied to the Ordinance Factory, Jabalpur were exempted from levy of duty under this notification, read with Tariff Item No. 34-A. Therefore, the entire question of controversy which arises between the parties is whether the part rejection of the claim of the plaintiff and making part refund of the duty paid by the plaintiff is proper and justifiable in law. The learned Government Pleader Shri Zaveri for the Government vehemently urged relying upon the rules I 1 read with Rule 173(J) of the Central Excise Rules, 1944, that if the plaintiff company wanted to exercise its right of claim of refund, it should have made an application for refund within the maximum time limit of one year of the date of payment of levy for excise duty. He elaborated his argument by submitting that in the instant case, the order Ex. 17, dated 28th May, 1977 passed by defendant No. 3 Assistant Collector of Excise, Baroda clearly reveals that as the other part of the claim of Rs. 54,252.34 p. of the plaintiff was beyond the period of one year under those rules, the same was legally rejected and therefore this order was just and legal. Hence, in the opinion of learned Govt. Pleader Shri Zaveri, the pltff is debarred under the self contained law of limitation. Under these rules for making any claim of refund Mr. Zaveri also pointed out from the said order that since the part claim of the plaintiff was considered by the department of the deft, within the said time limit, it was allowed for Rs. 35,948.38 p. The arguments of the learned Govt. Pleader Shri Zaveri were counteracted by the learned advocate Shri Antani, for the plaintiff who submitted that in the instant case, there is no question of making applicable the rules as relied upon by the defendant, but only the general Law of Limitation which prescribed the time limit of three j ears would be made applicable. The collection of the excise duty by the defendant was itself illegal and unwarranted by law and this is projected by their own order Ex. 17 by which part claim was allowed to be refunded and hence there could be no question of permitting the defendant to allow avail of the self contained rules under the Central Excise Manual I, containing the Central Excises and Salt Act, 1944, read with the rules. Shri Antani, Advocate for the plaintiff further urged that the payment for refund of duty paid by the plaintiff is not either of tortrious nature or for compensation or damages. But it is a legitimate claim for the refund. In this connection, he relied upon the case of Bommidela Poornaish, Plaintiff Appellant v. The Union of India Defendant, Respondent. 1967 A,P. at page 33S, wherein it is held that:
"Only suits of tortious nature for compensation of damages are barred and the question of collection of illegal tax is an order imposing tax duty or penalty are not dealt with by Section 40. It is further held that the suit was not barred by Section 40 and hence limitation prescribed by Section 40(2) is not applicable to it, but general law of limitation would apply".
Applying the analogy of the principle laid down in the above ruling, it is true that the Rules 11 read with 173(J) admittedly provide that the claim of such refund should be preferred within one year from the date of payment of the duty. However, these rules cannot operate as impediment in the way of the plaintiff, because the defendant department is not entitled to collect levy of duty illegally but is restricted to collect the same only in accordance with Law. The duty, therefore, collected by the defendant department, making part refund falling within one year and the second part refund withholding, certainly cannot be said that the withholding of the other part of the duty was a legal with holding in the eye of Law. Such withholding therefore, cannot permit the defendant-department to take shelter under the provisions of the Rules 11 and 173(J) If it is so then the refund fully must be made. In other words, the defendant department cannot be allowed to retain the other part of the paid duty under the guise of law.
12. In another case of Rohtas Industries Ltd. Appellant v. Union of India as reported in A.I.K 1967 PATNA at page 363, also a similar view has been taken. In that case, the scope and applicability of Rule 11 of the Central Excises and Salt Act, 1944 read with Section 40(2), 37 and 38 were taken into consideration. It was a case where the application was made for refund of amount paid by mistake to the defendant department and it was held that the refund being only on equitable grounds is not one under Rule 11 of the rules and special limitation under Section 40(2) or Rule 11 was not applicable and it was held that the suit filed within three years from the date of knowledge of the mistake under Article 96 of Limitation Act was not barred. Thus it is clear that in the instant case, the application for refund made by the plaintiff, was in fact, and in substance an application for an equitable relief at the hand of the party to whom the aforesaid sum of Rs. 90,200.72 p. had been paid under either a mistake of fact or directions thereof. In this view of the matter, the order of the defendant department granting the part claim of the plaintiff and rejecting the other part which is a suit claim cannot be said by any stretch of imigination to have been passed equitably under the Central Excises and Salt Act, 1944 and its rules thereunder, so as to deprive the plaintiff of its legitimate right of claim of refund.
From the above discussion I am unable to agree with arguments made by the learned Government Pleader Shri Zaveri.
13. Then it was urged by the learned Government Pleader Shri Zaveri, that even if it is held that not the special law of limitation under the Central Excises and Salt Act, is applicable to this case but a General Law of Limitation is applicable, then also part of the suit claim is time barred. In this connection, he invited my attention to the date of filing of this suit which is 19-6-78, and submitting that under Article 113 of the Limitation Act, the plaintiff is entitled to refund of claim only for a period of three years from the date of payment which is 1-3-1975. Therefore, according to the Govt. Pleader Shri Zaveri, when the refund has been asked for from 1-3-1975 by the plaintiff and when the plaintiff has filed the suit on 19-6-1976, the suit is time barred. Alternatively Shri Zaveri, Govt. Pleader urged that if the period of limitation is computed for a period of three years, preceding the date of filing of the suit, which is filed on 19-6-78, then the plaintiff could be entitled to the refund starting from 20-6-1975 and not anything above for a period above 20-6-75. For this, Shri Zaveri, the Government Pleader pointed out my attention to Ex. 168, which shows that the refund which has been asked for by the pltff. starts from the month of March 1975 till the month of April 1976. In the opinion of Government Pleader Shri Zaveri, therefore, the suit should be treated time barred in respect of the claim of refund starting from the month of March 75 till the month of June 75, which comes to Rs. 14,767.12 p. In order to appreciate the argument advanced by the learned Govt, Pleader Shri Zaveri, it will be necessary to refer to Article 113 of the Indian Limitation Act, which runs as under:
113. Any suit for which no Three When the period of limitation years right to sue is provided elsewhere accrues.
in this Schedule.
Reading therefore the Article 113 of the Indian Limitation Act, it is clear that the period of three year time to be computed for the purposes of present suit should be form the date when the right to sue accrues If the argument that from l-3-'75 the plaintiff has started making payment of Excise Duty or that the plaintiff has claimed for refund from the even date, were to be accepted as true, could it be said that on the said date of 1.3.1975 when such payment was made, right to sue accrued to the plaintiff. Obviously not for a simple reason that the plaintiff did not make payment of excise duty from 1.3.'75 under the belief that he had from the very date, a right to sue. Then the question which naturally arises is which could be the date when a right to sue is to be said to have accrued to the plaintiff. For this, if the record is perused for a while it transpires that for the first time a clarification was made by the defendant-department vide its letter Ex. 14 dated 16.2.1976 as earlier discussed that the motor vehicle parts supplied to the Indian Ordnance Factory, Jabalpur will not fall under Tariff Item No. 68 since they would be covered by Tariff Item 34-A as motor vehicle parts. Thereupon, 'he plaintiff supplied the classification list which was approved by the department and ultimately a refund application was preferred on 15.12.'76, vid Ex. 16, which came to be partly granted by an order Ex. 17 and resulted into the rejection of the suit claim, which was the other part of the refund claim. This order Ex. 17 was passed by the deft, department on 29.5.'77, which in my opinion could be taken to be the date of a right which accrued in favour of the plaintiff to sue the defendant. If, therefore, from the view point of these circumstances, the whole matter is seen, the reflection would be none other than to say that suit as filed on 19.6.'78 which is within the date of a period of three years from the date of passing of the order on 28.5.'77 is within the time. Of course, an argument was advanced on behalf of the defendant that if after so many years such an order would have been passed, could it be said that after so many years, the suit brought by the plaintiff for claiming the refund from 1.3.75 could be treated within time. I think, the reply should be in the affirmative. The essence of Article 113 of the Indian Limitation Act, is that as to when does the right to sue accrue in favour of the plaintiff and no other, such a right to sue, thus, has accrued to the plaintiff decisively, n the instant case from 28.5.'77 when the suit claim was rejected on the ground of limitation by the defendant-department. If this is so, I hold that the suit as brought is within the time for the claim of refund by the plaintiff.
From all the above discussion I hold that the plaintiffs suit is not barred under the General Law of Limitation which in cases of equitable relief oversides the Special Act and the rules made thereunder of the Central Excises and Salt Act, 1944. Consequently I hold that the excise duty of Rs. 54,252.34 p. as recovered by the defendant has been illegally and unauthorisedly collected. Thus my finding on issue No, 1 is in the affirmative while my finding on issue No. 5, is in the negative.
Issue No. 2:
14. In the plaint, the plaintiff has claimed interest by way of damages in the sum of Rs. 5,750/- as per para 14 of the plaint at the rate of 6% p.a. for the period from 16.12.75 to 15.3-'7 j. In the Written Statement, the defendants have denied the liability for the payment of interest. I have heard the arguments of both the sides' Advocates on this point. It has been strenuously urged by the learned Government Pleader Shri Zaveri for the defendant that all this is a case in which plaintiff has put forth a claim of refund of duty. When the said claim for the refund of duty paid has been preferred on account of the existence of a certain notification, if the plaintiff is to be refunded the said duty along-with interest it would amount to unjust or illegal enrichment of the plaintiff. In other words. The Govt. Pleader Shri Zaveri urged that levy of excise duty is an indirect tax on consumers. Therefore, if the manufacturer is to be refunded the suit claim alongwith interest, the effect whereof would be to make the plaintiff richer without the plaintiff's paying such talk. On the other hand, it was submitted by the learned Advocate Shri Antani for the plaintiff that the defendant had collected and used the amount of the plaintiff without Authority of Law and hence the defendant is bound to pay interest ever such illegal collection. Again, it was submitted that the excise duty is such which is recoverable from the manufacturer even if ultimately the consumer does not pay it or that the manufacturer is unable to recover it from the consumer and therefore the manufacturer is entitled to get interest. I think, that there is some force is the argument of Shri Antani. In a case of Maharaja Shree Umaid Mills Ltd. Plaintiff v. Union of India and Ors. Defendants as reported in A.I.R. 1960, Rajasthan at page 93, it has been held that:
No doubt excise duty is an indirect tax which is ultimately intended to fall on the consumer. But it is recoverable from the manufacturer even if the manufacturer is unable to recover it from the consumer. A suit for the refund or reimbursement of the excise duty is maintainable even though the pltff. has collected the same from consumer over and above the ex-mill price of the cloth.
15. Further, in the case of M/s. Vijay Textile and Anr. v. Union of India and Ors. as reported in G.L.R, Vol. XX. at Page 946, it has been held that:
It must be emphasized that these amounts which are directed to be refunded, were collected by the Excise authorities without the authority of law and were illegal levies. The Central Government had use of these amounts during this period of three years and correspondingly the petitioner concerned was kept out of use of these amounts during the said period. It is, therefore, just and proper that the respondent should pay interest at twelve per cent per annum (which is the proper rate looking to the conditions in the money market) from the dates of the collection of the said amounts directed to be refunded till the date of actual repayment.
From the above rulings, I adopt the reasonings and hold that though in the case of M/s. Vijay Textile and anr. v. Union of India, interest at the rate of 12% was allowed, in the instant suit, the plantiff has claimed interest only at the rate of 6% p.s. I think, therefore that the plaintiff is entitled to recover the interest as claimed for the simple reason that the defendantGovernment had without any authority of law, used the money of the plaintiff putting the plaintiff to the loss of use thereof for such period. Under the circumstances, I hold issue No. 2, in the affirmative.
Issue No. 3:
16, In view of my finding in the affirmative in issue No. 1, I hold that the plaintiff is entitled for a declaration as prayed for in para 15 of the plaint and that the assessment of the goods and the recovery of the Excise Duty amounting to Rs. 54,252.34 p. was made by the defendant without jurisdiction and hence the defendants are liable to the grant of refund thereto, to the plaintiff alongwith interest. Thus my finding on issue No. 3, is in the affirmative.
Issues No. 7 and 8:
17. As regard these issues, Shri Zaveri Government Pleader for the defendant urged that this Court has no jurisdiction to hear this suit especially when the plaintiff has not exhausted all the remedies available under the provisions of Section 35 Appeals and Revisions under Section 35-A and 36 of the Central Excises and Salt Act, 1944. Government Pleader Shri Zaveri, further submitted that this Act is a self contained Act and unless those remedies as provided under the said Act are exhausted, this Court would have no jurisdiction to hear this suit. Mr. Antani Advocate for the plaintiff assailing this argument submitted on the other hand that there could arise no question of first exhausting efficacious remedies provided under this Act, and then bringing the present suit because, after all, the very order Ex. 17 rejecting the suit amount has been passed without the Authority of law. Appreciating the rival contention of the parties' advocates, I am of the opinion that when the original order Ex. 17, has been earlier held by me to have been passed without jurisdiction and as such, it is liable to be set aside, hardly it remains to be added that the plaintiff was under obligation to exhaust all the efficacious remedies provided under the said Act. This view becomes fortified in the case of A' had Cotton Mfg. Co. Ltd. etc, Appellants v. Union of India and Ors. Respondents, as reported in A I.R. 1977 Guy at page No. 113, by a full bench decision, wherein it has been held as under ;
When the petitioner is to be asked to exhaust his alternative remedies provided under the Act before entertaining the writ petition, this distinction would always be material where the order is a nullity as being ex facie without jurisdiction or in non-compliance with the provisions of the actor the essential jurisdiction of justice of any other ground as explained in Tarachand Gupta's case AIR 1971 SC (1565) or Bhopal Sugar Industries case. AIR 1967 SC 549 or Mohd. Nooh's case. AIR 1958 SC 86 (94) and is, therefore, a purported order or nullity. In such a context the alternative remedy would be a futile remedy because it did not affect the inherent nullity in the challenged decision, which would result in the material distinction that the party may appeal against such decision but he was not bound to do so. Therefore, in such cases where the challenge is on the ground that the order is an ultra vires order, the question of exhausting alternative remedy could hardly arise as the petitioner could straightway seek remedy of judicial review. These settled principles would be all the more applicable after this constitutional fetter where the emphasis is now on redress of injuries for which specified purpose only this extraordinary remedy is created so that in such substantial injuries consisting of non-compliance with other constitutional or statutory provisions or illegalities which go to the root so as to result in failure of justice when committed by authorities and tribunals acting under these provisions, it would be a poor consolation to a citizen to be told in cases of such purported orders to avail of such remedy which he is not bound to exhaust and which would not be efficacious at all but a futile remedy in case the order is confirmed as it would still remain a nullity.
It has been further held that:
Every Act would have to be examined when such a question of the existence of alrernative remedy arises and it would have to be found out as to what is the amplitude of the normal Act remedies for appeal or revision...(incomplete). If the Act remedy is so wide as to cover even purported orders so that no part of the activity of the authority is a collateral activity, the Act having provided for direct remedies to such a wide extent, that remedy would have to be first exhausted. On the other hand, where the Act remedies are not of such wide amplitude but only for orders under the Act, in cases of such purported orders., the appeal remedy could not come in the Way of the petitioner as it could not be said to have been provided for such purported orders which are null and void and which it would not be obligatory for the petitioner to exhaust for the simple reason that such an appeal remedy would not be able to cure the defect even if the appeal confirms the original order bearing this indeliable mark of nullity.
18. I humbly adopt the reasoning of the above cited case, and without reproducing the same for the sake of brevity, I hold that as the order Ex. 17, was a nullity, the alternative remedy would be a futile remedy because, even in an appeal provided under the said Act if the order is confirmed it would still remain a nullity
19. From all the above discussion, I hold that this Court has jurisdiction to hear, try and decide this suit, even without the plaintiff's having not exhausted all the remedies available under the provisions of Central Excises and Salt Act, 1944 Thus my findings on issues Nos. 7 and 8 are in the negative.
Issue No. 9:
20. In view of my findings on all the foregoing issues, following order is passed:
ORDER Plaintiff do recover Rs. 60,000/- alongwith interest thereon at the rate of 6% p.a. from the date of the suit till realisation from the properties of defendant No. 1 The Union of India, defendant No. 1. to pay cost of the plaintiff and do bear its own.
Decree be drawn accordingly.
Pronounced to-day in open Court this 24 day of April, 1980.