Madras High Court
Madurai Metal Industries vs Union Of India on 6 November, 1990
Equivalent citations: 1991(34)ECC187, 1991ECR466(MADRAS), 1991(52)ELT495(MAD)
ORDER
1. The petitioner in W.P. Nos. 15770 to 15773 of 1990 is the appellants in these four writ appeals. The respondents in the writ petitions are the respondents in the writ appeals. We propose to refer to the parties as per their nomenclature in the writ petitions. The petitioner challenged in the writ petitions this show cause notices under Section 16 of the Tamil Nadu General Sales Tax Act, 1959. Before the learned Single Judge, who dealt with the writ petitions, two contentions were raised; one is that the show cause notices have clearly indicated closed mind and this vitiated them. The second is that the third respondent abdicated his powers by simply copying the notice issued by the second respondent under the Central Excise Act. The learned Single Judge found that the third respondent is not justified in drafting the impugned show cause notices in the manner in which they were done. However, the learned Single Judge opined that it would suffice the purpose, if direction is given to the third respondent to consider the objections impartially and with case, not with a closed mind. The learned Single Judge was also of the view that there are appeals and revisions to higher authorities and hence there is no need for interference in writ powers with the impugned show cause notices. As a result, the writ petitions were dismissed. These four writ appeals are directed against the common order of the learned Single Judge.
2. Considering the limited scope of the controversy in the writ appeals, we deemed fit to order notice of motion. Notice of motion has been served and there is representation by counsel for the respondents. The counsel for the parties made their submissions and we are proceeding to dispose of the writ appeals on merits today itself.
3. Mr. R. Thiagarajan, learned counsel for the petitioner, would primarily contend that when once it is found that the third respondent issued the impugned show cause notices with a foreclosed mind or a prejudged mind, any answer or objection to the impugned show cause notices will be an empty formality, and such an issuance of show cause notices voltages the principles of natural justice. Learned counsel for the petitioner also submits that the direction to the third respondent to deal with the matter impartially and with case, as done by the learned Single Judge, will not be of any solace at all to the petitioner and will not ameliorate the vitiating factor. It is true that the stage of issuance of show cause notice; be it so in disciplinary action or under any other statute, is a premature one for this Court to examine the propriety or otherwise of the proceedings. But there are exceptions to this rule. We need not delineate all the exceptions. One of the well accepted exceptions is that if the Authority issuing the show cause notice has done it with a foreclosed or a prejudged mind, that would amount to violation of the principles of natural justice, and proceedings further on the basis of the said cause notice is not permissible. In the instant case, the impugned show cause notices bear the following passage :
"Thus it is proved beyond any shadow of doubt that the dealers have been clandestinely indulging in massive purchases and sales suppressions by manoeuvering and manipulating their accounts deliberately and wilfully not only to evade payment of Excise duty, but also the tax legitimately due to the Commercial Taxes Department."
Without any ambiguity it has been stated that it is proved beyond any shadow of doubt that the dealers have been clandestinely indulging in massive purchases and sales suppressions by manoeuvering and manipulating their accounts deliberately and wilfully. We have no doubt in our mind that this passage clearly indicates a foreclosed and a prejudged mind.
4. In Bimlakantha v. State of West Bengal [1980 (2) SLR 232] it has been held by a Division Bench of the High Court of Calcutta that if the Disciplinary Authority had already formed a bias against the servant and he had already come to a definite and confirmed opinion, that would show that the charge-sheet was framed with a closed mind, and as such, the principles of natural justice stood violated.
5. In Manindra Nath Ghose v. State of West Bengal [1980 (1) LLJ 46] the very same Bench of the High Court of Calcutta found from the conspectus of the decisions cited at the Bar that if the second show cause notice is impeached on the ground, that the charge-sheet was issued with a closed mind, the High Court could interfere because such issuance of show cause notice violated the principles of natural justice.
6. In Surendra Chandra Das v. State of West Bengal [1982 (1) LLJ 250], a learned Single Judge of the High Court of Calcutta also opined that if from the attending circumstances and also from the language of the charge-sheet, it appears that the Disciplinary Authority had really drawn a positive conclusion against a delinquent officer and has started disciplinary proceeding by issuing a charge-sheet, that proceeding must be held to be vitiated by basis and a closed mind and could be interfered even at that stage.
7. In Dr. Anil Kumar v. State of West Bengal [1983 (2) SLR 306] a learned Single Judge of the High Court of Calcutta observed that is is well-settled that the rules of natural justice will apply where the charge-sheet was framed with a closed mind.
8. In Sampath, M. K. v. The Committee of Management of Pachaiyappa's Trust [1989 Writ L.R. 379], K. N. Natarajan, J., frowned upon a show cause notice wherein there was an indication of having arrived at the conclusion that the person against whom it was issued, committed the acts.
9. The above principle obliges us to countenance the case of the petitioner. As rightly contended by the learned counsel for the petitioner, the impugned show cause notices cannot be allowed to stand by merely directing the third respondent to proceed further impartially and with case on the basis of the impugned show cause notices. The learned Single Judge, as already noted, seems to be of the view that the disciplinary enquiry will stand on different footing. The basic principle is that a show cause must be a real show cause, keeping an open mind with regard to the subject-matter of the enquiry proposed and if the show cause bears out a foreclosed or a prejudged mind, that will violate the principles of natural justice. We could not distinguish cases arising under other circumstances from cases relating to disciplinary action, with regard to application of this basic principle.
10. For all these reasons, we allow these four will appeals; set aside the common order of the learned Single Judge and the writ petitions will stand allowed as prayed for. We, however, make it clear that the liberty is that of the third respondent to issue show cause notices afresh without committing the above infirmity, which alone obliged us to interfere in writ powers. Equally so, it is open to the petitioner to challenge the fresh show cause notices if issued on grounds that may be available to him. No costs.