Kerala High Court
Thressiamma vs Union Of India (Uoi) on 21 June, 1999
Equivalent citations: 2000(120)ELT602(KER)
Author: A.R. Lakshmanan
Bench: A.R. Lakshmanan
ORDER S. Sankarasubban, J.
1. The above Writ Appeal is filed by the petitioner in O.P. No. 14526 of 1993. The Original Petition was dismissed by judgment dated 23-12-1998. In the Original Petition, the petitioner had prayed for a writ of certiorari or other appropriate writ and set aside Ext. P7 order dated 21-7-1993 of the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi (hereinafter referred to as 'the Tribunal'. The grievance of the petitioner which was highlighted in the Original Petition is as follows :
2. The petitioner/appellant is the proprietrix of Vijaya Packers. The petitioner, on behalf of M/s. Corn Products Company (India) Ltd, who market Glucovita Glucose D, had undertaken the process of mixing and blending Dextrose Mono Hydrate with 0.6% of Tricalcium Phosphate and 0.00025% Vitamin-D on job work basis. According to the petitioner, Tricalcium Phosphate was added as an anti-caking agent and Vitamin D to improve the quality of Dextrose without any chemical change or reaction. According to the petitioner, there is no manufacturing process within the meaning of Section 2(f) of the Central Excises and Salt Act, 1944 (hereinafter referred to as 'the Act')- The fourth respondent in the Original Petition the Assistant Collector of Central Excise, Trichur, was of the view that the process involved manufacture and thus subject to levy of excise duty.
3. Originally when the petitioner was compelled to pay excise duty, she approached this Court by filing O.P. No. 5820 of 1990. O.P. No. 5820/90 was disposed of by Chettur Sankaran Nair, J. by judgment dated 29th June, 1990. The learned Judge directed the fourth respondent to hear the petitioner and take a decision on the matter as to whether there was any manufacturing process. The judgment of the learned Judge is produced as Ext. P2, in the Original Petition. In tune with Ext. P2. the petitioner was issued a show cause notice by the fourth respondent. It is Ext. P3. The petitioner gave a reply to Ext. P3 by Ext. P4 dated 5-9-1990. Thereafter, the fourth respondent passed Ext. P5 order dated 5-11-1990. The fourth respondent took the view that manufacturing process was involved and hence it was subject to levy of duty. From Ext. P5 it can be seen that the fourth respondent relied on the report of the Chief Chemist. According to the Chief Chemist, the blending of Dextrose Mono Hydrate with Tricalcium Phosphate and Vitamin D was done with some specific purpose, i.e., to enrich the product with Calcium and Vitamin D. The enriched product is not merely Dextrose Mono Hydrate, but a product of different character and identity. The 4th respondent also took note of the marking on the carton which showed that it was intended for use as a food for extra energy.
4. Against Ext. P5 order, the petitioner preferred an appeal before the third respondent-Collector of Central Excise and Customs (Appeals) - as Appeal No. 154/ 91(C). The appeal was disposed of by order dated 13-5-1991, true copy of which is produced as Ext. P6 in the Original Petition. The Appellate Authority agreed with the findings of the original authority and dismissed the appeal. Against that order, the petitioner preferred a Second Appeal under Section 35B of the Central Excise Act, 1944 before the Appellate Tribunal. The Appellate Tribunal dismissed the appeal by order dated 21-7-1993. The main order was rendered by the Judicial Member Jyothi Balasundaram and S.K. Bhatnagar gave a separate concurring judgment. It is challenging Ext. P7 that the Original Petition was filed.
5. The main ground taken in the Original Petition is that at the time of hearing the appeal before the Tribunal, the Departmental representative submitted that Tricalcium Phosphate and Vitamin D are deliberately added to Dextrose Mono Hydrate by the petitioner for the specific purpose of providing nutrients to the human body. The Departmental representative relied on certain extracts from the book titled 'Normal and Therapeutic Nutrition' (17th Edition) by Corinne H. Robinson and the Judicial Member has referred various extracts from that book. According to the petitioner, it is on the basis of the new ground and fresh evidence relied on for the first time that the Tribunal passed the order against the petitioner. The petitioner contended in the Original Petition that the allowing of fresh evidence was in violation of Rule 23 of the Customs, Excise Gold (Control) Appellate Tribunal (Procedure) Rules, according to which new evidence can be given only after giving an application and after hearing both parties and after the Tribunal being satisfied that it was necessary. According to the petitioner, she had and even now having evidence to rebut the ground urged that to provide nutrition to the human body a minimum quantity of Calcium and Phosphorous and Vitamin D are required and if as a matter of fact, an opportunity had been given to the petitioner the petitioner would have been able to convince the Tribunal that the Calcium Phosphate and Vitamin D were not of the minimum dose required to provide nutrients. Hence the petitioner contends that the order of the Tribunal is in violation of Rule 23 of the Rules as well as in violation of the principles of natural justice. In ground No. D the petitioner had taken the ground that the order passed is in violation of the principles of natural justice and in ground No. C, the petitioner had taken the contention that there is violation of Rule 23 of the Appellate Tribunal Rules.
6. The Original Petition came up for admission on 25-10-1993. Thereafter it is seen that it was posted on 24-11-1993. On that date on behalf of the fourth respondent, an objection was filed. In the paragraph 2 of the objection, the contention raised is that the Original Petition was not maintainable, since an appeal lies to the Supreme Court under Section 35L of the Act. The objection also deals with other contentions raised in the Original Petition. To the objection, a reply statement was filed by the petitioner on 10-12-1993. It is seen that on 3-2-1994 the Original Petition was admitted and notice was ordered. Thereafter it was posted on 7-10-1998 before the learned Judge. On 7-10-1998 the learned Judge posted the case to 12-10-1998 for argument regarding the maintainability of the Original Petition. Thereafter, it is seen that the case was posted on various dates and it was finally heard on 8-12-1998 and judgment was delivered on 23-12-1998. The learned single Judge dismissed the Original Petition. In paragraph 3 of the judgment the learned Judge posed the question whether the petition under Article 226 of the Constitution of India is maintainable, since an appeal lies under Section 35L of the Central Excises and Salt Act to the Supreme Court. In paragraph 6 of the judgment, the learned Judge held as follows : "All the authorities below found that Glucovita Glucose D manufactured by the petitioner comes under Heading 1702.21 of the Central Excises Tariff as preparation of other sugars. Thereafter, this Original Petition under Article 226 of the Constitution raising the said question cannot be maintained when there is a specific provision for appeal under Section 35L of the Central Excises and Salt Act". However, the learned Judge thereafter went on to examine the question whether there was any violation of the principles of natural justice and concluded that there was no violation. It is against the above judgment that the Writ Appeal is filed.
7. We heard Sri A. Hidyatulla, Senior Counsel for the appellant and Sri. K. Rama Kumar, Senior Standing Counsel on behalf of the respondents. Learned counsel for the appellant raised three points.
(1) The Learned single Judge went wrong in holding that the Original Petition was not maintainable. (2) The Learned single Judge was not correct in going to the question whether there was violation of the principles of natural justice after finding that the Original Petition was not maintainable. (3) The Original Petition ought to have been allowed on the ground that there was violation of the principles of natural justice by the Tribunal. On the other hand, Sri Rama Kumar contended that (1) The Original Petition was not maintainable, since there was an effective alternative remedy under Section 35L of the Act. (2) There was no violation of Rule 23 of the Appellate Tribunal Rules or violation of the principles of natural justice and (3) In any event, the learned single Judge and exercised a discretion, which is based on sound legal principles and hence should not be interferred in appeal.
8. Point No. 1 - Maintainability of the petition under Article 226 of the Constitution of India : Shri Hidyatulla contended that the Original Petition contained averments to the effect that the Appellate Tribunal violated the rules of procedure and also violated the principles of natural justice. Learned Counsel contended that it is true that an appeal lies to the Supreme Court under Section 35L of the Act. But that does not mean that a petition under Article 226 of the Constitution of India is not maintainable. Learned counsel cited authorities to show that the power under Article 226 of the Constitution of India can be exercised in spite of an alternate remedy, if there is any violation of any fundamental right, violation of any Act or Rules or violation of the principles of natural justice. Since me Original Petition contains the above allegations, it cannot be said that the petition is not maintainable. Further he contended that even though an objection was raised as to the maintainability of the Original Petition, the Original Petition was admitted on 3-2-1994 and Original Petition was lying in the Court for nearly 4 years and it is not proper to dispose of the Original Petition after four years on the ground that there is an alternate remedy. On the other hand, Shri Rama Kumar contended that it is not in all cases that the High Court exercises its jurisdiction under Article 226 of the Constitution of India. According to him in the appeal, violation of the Rules or violation of the principles of natural justice can be urged. He cited certain decisions to show that the jurisdiction under Article 226 of the Constitution has to be exercised with great restraint. Shri Rama Kumar cited the following decisions : C.A. Abraham v. Income Tax Officer, Kottayam and Anr., AIR 1961 SC 609, Bisra Stone Lime Co. Ltd. v. Orissa Textile Mills Ltd. and Anr., AIR 1976 SC 127, Assistant Collector of Central Excise v. Jainson Hosiery Industries, AIR 1979 SC 1889, Northern Corporation v. Union of India and Ors., 1990 (4) SCC 239, Additional Secretary to the Government of India and Ors. v. Smt. Alka Subhash Gadia and Anr., 1992 Supp. (1) SCC 496, State of U.P. and Ors. v. Bridge & Roof Company (India) Ltd., 1996 (6) SCC 22, State of Goa and Ors. v. Leukoplast (India) Ltd., AIR 1997 SC 1875 and also the decision of this Court in W.A. No. 2265/98.
9. AIR 1961 SC 609 was a case which arise from a decision of this Court. There the challenge before this Court was against a notice under Section 28 of the Indian Income Tax Act and Section 4 of the Travancore Income Tax Act for the escaped income. The Original Petition was entertained by this Court, but finally it was dismissed. The Supreme Court held thus :
"In our view the petition filed by the appellant should not have been entertained. The Income Tax Act provides a complete machinery for assessment of tax and imposition of penalty and for obtaining relief in respect of any improper orders pissed by the Income Tax Authorities..."
Thereafter, the Court went on to hold that "the High Court did entertain the petition and has also granted leave to the appellant to appeal to this Court...we do not think that we will be justified at this stage in dismissing the appeal in limine". According to us, this is the general principle stated by the Supreme Court and a perusal of the case shows that the attack on the notice was on merits and not on the basis of any violation of any principles of natural justice or violation of any rule. AIR 1976 SC 127 was a case where the Supreme Court held that when there is an arbitration clause in agreement the question whether the Electricity Board has power to levy surcharge is covered by the arbitration clause and hence the petitioner could not pursue the remedy under Article 226 of the Constitution of India. AIR 1979 SC 1889 was a case where the Supreme Court was dealing with an appeal filed by the Assistant Collector of Central Excise against an order of the High Court releasing certain goods seized. In the course of the judgment, Krishna Iyer, J. observed thus:
"It is correct to say that the High Court must have regard to the well established principles for the exercise of its writ jurisdiction and unless it is satisfied that the normal statutory remedy is likely to be too dilatory or difficult to give reasonably quick relief, it should be loath to act under Article 226. May be, in exceptional cases - the present one does not appear to be one -that extraordinary power may be exercised."
The above decision does not help the respondents. 1990 (4) SCC 239 was a case under Article 32 of the Constitution of India. Hence, it is not relevant for our purpose. 1992 Supp. (1) SCC 496 was a case where a detention order was challenged even before it was issued. The Supreme Court considered the scope of Article 226 of the Constitution of India. In paragraph 30 of the judgment, it was held as follows :
"Neither the Constitution including the provisions of Article 22 thereof nor the Act in question places any restriction on the powers of the High Court and this Court to review judicially the order of detention. The powers under Article 226 and 32 are wide, and are untrammelled by any external restrictions, and can reach any executive order resulting in civil or criminal consequences. However, the courts have over the years evolved certain self restraints for exercising these powers. They have done so in the interests of the administration of justice and for better and more efficient and informed exercise of the said powers. These self-imposed restraints are not confined to the review of the orders passed under detention law only. They extend to the orders passed and decisions made under all laws. It is in pursuance of this self-evolved judicial policy and in conformity with the self-imposed internal restrictions that the courts insist that the aggrieved person first allow the due operation and implementation of the concerned law and exhaust the remedies provided by it before approaching the High Court and this Court to invoke their discretionary extraordinary and equitable jurisdiction under Articles 226 and 32 respectively.
The above decision only says that this Court has got a discretion to exercise the power under Article 226 of the Constitution of India and the courts have evolved certain self-restraints in exercising the same. 1996 (6) SCC 22 was a case where the dispute was relating to the terms of private contract and there was an arbitration clause. In those circumstances, the Supreme Court held that the Writ Petition was not maintainable. In AIR 1997 SC 1875 the question was whether certain substances like Zinc Oxide Adhesive Plaster, etc. are drugs or medicines. The Supreme Court held that it was a question of fact and the petitioner has to resort to the remedies under local Sales-tax Act and the Writ Petition as such was not maintainable. So far as W.A. No. 2265/98 is concerned, that is a case where the judgment was delivered by one of us - A.R. Lakshmanan, J. (as he then was) on behalf of the Bench. There the appellant's case was that the appellant could not file an appeal under Section 35L of the Central Excise Act to the Supreme Court, because the appellant was not able to arrange institution of such appeal, in view of its extremely precarious financial situation. The Division Bench held that precarious financial situation cannot at all be a ground for not filing an appeal.
10. Learned Counsel for the appellant relied on the following decisions : State of U.P. v. Mohammad Nooh, AIR 1958 SC 86, A.V. Venkateswaran, Collector of Customs, Bombay v. Ramchand Sobhraj Wadhwani and Anr., AIR 1961 SC 1506, Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad, AIR 1969 SC 556, South Travancore Distilleries v. Asstt. Commissioner of Commercial Taxes, 1999 (1) KLJ 506, Whirlpool Corporation v. Registrar of Trade Marks, (1998) 8 SCC 1, decisions of the Bombay High Court in Tata Engineering & Locomotive Co. Ltd. v. Union of India, 1997 (89) E.L.T. 463, Plethico Pharmaceutical v. Union of India, 1995 (80) E.L.T. 755 and Ceat Tyres of India Ltd. v. Union of India, 1992 (62) E.L.T. 517, Tata Tea Ltd. v. The Agricultural Income Tax & Sales Tax Officer, 1993 (1) KLT 269 and the decision of the Madras High Court in Madura Coats Ltd. v. Assistant Collector of Central Excise, 1990 (48) E.L.T. 321. In AIR 1958 SC 86, the Supreme Court held as follows:
"The fact that the aggrieved party has another and adequate remedy may be taken into consideration by the superior court in arriving at a conclusion as to whether it should, in exercise of its discretion, issue a writ of certiorari to quash the proceedings and decisions of inferior courts subordinate to it and ordinarily the superior court will decline to interfere until the aggrieved party has exhausted his other statutory remedies, if any. But this rule requiring the exhaustion of statutory remedies before the writ will be granted is a rule of policy, convenience and discretion rather than a rule of law. The superior court will readily issue a certiorari in a case where there has been a denial of natural justice before a court of summary jurisdiction."
In AIR 1961 SC 1506, it was observed by the Supreme Court as follows:
"The wide proposition that the existence of an alternative remedy is a bar to the entertainment of a petition under Article 226 of the Constitution unless (1) there was a complete lack of jurisdiction in the officer or authority to take the action impugned, or (2) where the order prejudicial to the writ petitioner has been passed in violation of the principles of natural justice and could, therefore, be treated as void or non est and that in all other cases, Courts should not entertain petitions under Article 226, or in any event not grant any relief to such petitioners cannot be accepted".
In 1999 (1) KLJ 506 a Division Bench consisting of A.R. Lakshmanan, J. (as he then was) and K. Narayana Kurup, J. held as follows :
"It has been established before us that the Writ Petition has been filed by the appellant for enforcement of his fundamental rights. Secondly, it has been established before us that there has been violation of principles of natural justice".
In AIR 1969 SC 556, the Supreme Court considered whether the existence of alternate remedy is a bar to a Writ Petition, and it was held as follows:
"There are at least two well-recognised exceptions to the doctrine with regard to the exhaustion of statutory remedies. In the first place, it is well settled that where proceedings are taken before a Tribunal under a provision of law, which is ultra vires it is open to a party aggrieved thereby to move the High Court under Article 226 for issuing appropriate writ for quashing them on the ground that they are incompetent, without his being obliged to wait until those proceedings run their full course.
In the second place, the doctrine has no application in a case where the impugned order has been made in violation of the principles of natural justice".
In that case even though violation of fundamental right and principles of natural justice were alleged in the Writ Petition, the Writ Petition was dismissed in limine. In paragraph 4 of the judgment, the Supreme Court held as follows:
"It is manifest in the present case that the appellant had alleged in the Writ Petition that the Taxing Officer has no authority to impose the tax and there was no validity constituted Antarim Zila Parishad after December 31,1959. It was further alleged that Sections 114 & 124 of the U.P. District Boards Act No. X of 1922 violated Article 14 of the Constitution... There is also an allegation that the imposition of the tax violated the provisions of Article 276 of the Constitution... It was further contended on behalf of the appellant that the procedure for assessment of the tax was not followed and there was violation of the principles of natural justice."
Thereafter, the Supreme Court observed as follows :
"In view of the allegations of the appellant that the taxing provisions are ultra vires and that there was violation of the principles of natural justice, we think that the High Court was in error in summarily dismissing the Writ Petition on the ground that the appellant had an alternative remedy of statutory appeal".
11. On a perusal of the above decisions, it is clear that the existence of an alternate remedy is not a bar to the maintainability of a Writ Petition, if there is violation of the fundamental right or violation of any Act or rule or violation of the principles of natural justice. A perusal of the Original Petition shows that the petitioner has attacked the order of the Tribunal on the ground of violation of Rule 23 of the Tribunal Procedure Rules and also violation of the principles of natural justice. As held by the Supreme Court in the decision in AIR 1969 SC 556, if there is allegation of violation of the principles of natural justice or violation of any Rule or Act, the dismissal of the Writ Petition on the ground of alternate remedy is not proper. Hence, we don't agree with the learned single Judge in holding that the Original Petition is not maintainable.
12. Further, in this case, we find that the Original Petition came up for admission on 24-11-1993. Notice on the Original Petition was given to the Standing Counsel for the Central Government and an objection was filed on behalf of the Central Government in which the question of maintainability was taken. It was only after that this Original Petition was admitted on 3-2-1994. According to the counsel for the respondents, even though the question of maintainability was heard, no order was passed. Whatever that may be, once the petition has been admitted, normally the question of maintainability does not arise. Further in this case we find that even after the objection by the respondents, the Original Petition has been admitted without any reservations. Another thing we find is that the Original Petition has been lying in this Court for four years. To dismiss the Original Petition after the lapse of four years or after a long time, according to us, is not proper. This will ultimately put the party into difficulty because by the time when the Original Petition is disposed of, the alternate remedy would have been barred. Taking the same view there are two decisions of the Madras High Court; one is Prasad Film Laboratories v. CEGAT, 1993 (68) E.L.T. 747 and another is Madura Coats Ltd. v. Assistant Collector of Central Excise, 1990 (48) E.L.T. 321. In 1993 (68) E.L.T. 747, Misra, J. (as he then was) held as follows:
"Availability of an alternate remedy cannot operate as a bar to such a constitutional remedy, though we exercise the refrain as a rule of prudence that a person should ordinarily first avail the internal remedy and invoke the writ jurisdiction as a last resort. In the instant case, in my view, the petitioner should not be asked to go in appeal at the final hearing stage of the case which had been admitted to hearing about six years ago".
In 1990 (48) E.L.T. 321, Kanakaraj, J. held as follows :
"Secondly, the Writ Petition has been pending from the year 1981 and to direct the petitioner to file an appeal in the year 1990 will amount to a mockery of justice. It has been held that the existence of an alternative remedy is no ground for refusing the relief of writ of certiorari where it appears on the face of the proceedings or on disputed facts that the authority had acted without jurisdiction or in excess of jurisdiction."
The Bombay High Court, in a number of cases, has also taken the view that when a Writ Petition has been pending for a long time, it may not be proper to dismiss that Writ Petition on the ground of alternate remedy. We are in agreement with the above decisions.
13. According to us, after the Writ Petition is admitted, it has to be disposed of on merits. Of course while disposing of the case, the court may have to exercise its discretion when disputed question of facts arise. But to dismiss such a Writ Petition after a lapse of years on the ground of alternate remedy is not proper.
14. Point No. 2 - Whether there has been violation of any rule or the principles of natural justice in passing Ext. P7 order. Before we proceed to consider this point, we would like to point out that the learned single Judge should not have considered this question when the learned Judge found that the Writ Petition was not maintainable and relegated the party to the alternate remedy. Once it is found that the Writ Petition was not maintainable, it was not proper to consider the other points.
15. The argument of the learned counsel is that Ext. P7 order is in violation of Rule 23 of the Appellate Tribunal (Procedure) Rules and in violation of the principles of natural justice. According to him, the Tribunal accepted fresh evidence and decided the case on the basis of new argument which was not set out before the 4th or 3rd respondents. As already stated, the question in issue is whether mixing of Tricalcium Phosphate and Vitamin D with Dextrose Mono Hydrate in the percentage given by the petitioner amounts to manufacture of new substance. According to the petitioner, what was done by the petitioner was the process of shifting, mixing and blending of Dextrose Mono Hydrate with miniscule quantities of Tricalcium Phosphate and Vitamin D. The case of the appellant is that Tricalcium Phosphate is added as an anti caking agent and Vitamin D is to improve the quantity of Dextrose without any chemical change or reaction. Hence, according to the appellant, there is no manufacture within the meaning of Section 2(f) of the Art Ext. P5 is the order passed by the fourth respondent. The finding of the fourth respondent in Ext. P5 order is as follows : In paragraph 2 of Ext. P5, it is stated that "it has been admitted that the entire activity carried out by M/s. Vijaya Packers in manufacturing Glucovita Glucose D amounts to 'processing', consists of cleaning, purifying and blending and packing from bulk into small packs, which is in agreement with the definition of the word "manufacture" given in Section 2(f) of the Central Excises & Salt Act". The order further refers to the report of the Chemical Examiner, which is as follows :
"The sample is in the form of white powder. It is a preparation containing mainly Dexorose with a small amount of calcium phosphate."
The fourth respondent then went on to consider the decisions of various courts. The discussion was thereafter with regard to manufacture. It is stated that the Chief Chemist has viewed that the blending of Dextrose Mono Hydrate with Calcium Phosphate and Vitamin D is done with some specific purpose, that is, to enrich the product with Calcium and Vitamin D. The enriched product is not merely Dextrose Mono Hydrate, but a product of different character and identity. It also refers to the instructions on the container, which show that Glucovita Glucose D is intended for use as a food only for extra energy. Finally, in the order, the fourth respondent states thus:
"Following the ratio contained in the above cited judgments and decisions and considering the expert opinion of Chief Chemist as contained in Government of India, Ministry of Finance, Department of Revenue Circular No. 7/90X. 1, dated 7-3-1990 issued from F. No. 14/8/89/CX-l, I consider that the process of sifting and blending Dextrose Mono Hydrate with Tricalcium Phosphate and Vitamin-D amounts to "manufacture"....".
Learned Counsel for the appellant submitted that nowhere in the order it has been stated that Tricalcium Phosphate and Vitamin D are added to provide nutrients to the human body. Ext. P6 order-in-appeal agrees with the order of the fourth respondent and is on the same line as that of the fourth respondent.
16. Now, we come to Ext. P7 order passed by the Tribunal. After stating the case of the appellant, in paragraph 4 the Tribunal discussed the case of the respondents. It is stated thus :
"In reply the learned SDR, Smt. Shanti Sundaram contended that the processes carried out by the appellant amount to manufacture as the raw materials viz. Dextrose Mono Hydrate admittedly has multiple uses and has been channelised for a particular use viz. food use and therefore, the sifting/sieving of the industrial raw to make it fit for direct human consumption is a process of manufacture. She submits that blending of glucose/Dextrose with Tricalcium Phosphate and Vitamin D is not merely incidental but deliberate, the additions being made for the purpose of human body to assist in the metabolic processes of converting glucose into energy. The Tricalcium Phosphate, though an anticaking agent, has been added in this case for a specific purpose viz. that of adding vital body nutrients. Vitamin D has been added not only for the purpose of improving the quality of dextrose but to aid absorption of Calcium Phosphate thereby providing nutrition. She cites relevant extracts from Normal and Therapautic Nutrition 17th Edition by Corinne H. Robinson and others on classification/distribution and characteristics of glucose, its functions, distribution and functions of Calcium and Phosphorous and Vitamin D to support her contention that the addition of Tricalcium and Vitamin D, albeit in miniscule proportions, is for the specific purpose of supplying vital body of nutrients...."
According to the Counsel for the appellant, it is for the first time that the case was developed. First time, it was submitted that Tricalcium was added for the purpose of supplying vital body nutrients and vitamin D was added for providing nutrients. The Departmental Counsel relied on the extracts from 'Normal and Therapeutic Nutrition' 17th Edition by Corinne H. Robinson. Counsel for the appellant submitted that as a matter of fact, the appellant was not informed about the new development of the case and was also not informed about the extracts from the book referred to above. From Paragraph 7, in Ext. P7, we find the discussion of the case. It can be seen in paragraph 8 that relevant extracts were taken from the book 'Normal and Therapeutic Nutrition'. After making various discussions, in paragraph 14, it is stated as follows:
"The literature referred to above shows that addition of Calcium and Phosphorous and Vitamin D to Glucose is for a specific purpose that is to provide essential body nutrients and the learned SDR was, therefore, correct in submitting that the addition of Tricalcium Phosphate and Vitamin D in small proportions is done with a specific purpose specially in view of the fact that Tricalcium Phosphate is not only an anticaking agent but the addition of Tricalcium Phosphate in this case, is to serve as a nutrient supplement".
According to the learned Counsel for the appellant, it is one of the requirements of natural justice that there should be a fair hearing. For fair hearing, the opposite party should know what is the case set up against him and further learned counsel submitted the question whether the quantity of Tricalcium and Vitamin D was added with a view to provide nutrients is a question of fact, which was not considered by the first two authorities. New evidence was let in by producing the literature referred to in Ext. P7 to contend that the addition of the above substances is a nutrient supplement and not as an anti-caking agent. Learned counsel submitted that if an opportunity was given to the appellant, she would have shown that this view was not correct and she has got materials to show that addition of low quantity of Tricalcium Phosphate and Vitamin D will not serve as a nutrient supplement. Counsel even submitted that he was ready with the materials for producing before this Court. According to him, fresh evidence can be adduced only in accordance with Rule 23 of the Rules.
17. Learned counsel for the respondents Shri K. Rama Kumar submitted that a perusal of Ext. P7 order will show that all the contentions urged by the appellant were considered. No doubt, the Tribunal also considered the question whether the addition of Tricalcium Phosphate and Vitamin D will amount to nutrient supplement. It cannot be said to be a new case and according to him, the reference to the book 'Normal and Therapeutic Nutrition' cannot be said to be a new evidence and further he contended that it was not merely on the basis that it was a nutrient supplement that the Tribunal came to the conclusion that the process of manufacture was involved.
18. Before we discuss the above point, we shall refer to Rule 23 of the Appellate Tribunal (Procedure) Rules, which reads thus :
"23 . Production of additional evidence :- (1) The parties to the appeal shall not be entitled to produce any additional evidence, either oral or documentary, before the Tribunal, but if the Tribunal is of opinion that any documents should be produced or any witnesses should be examined or any affidavit should be filed to enable it to pass orders or for any sufficient cause, or if adjudicating authority or the appellate or revisional authority has decided the case without giving sufficient opportunity to any party to adduce evidence on the points specified by them or not specified by them, the Tribunal may, for reasons to be recorded, allow such documents to be produced or witnesses to be examined or affidavits to be filed or such evidence to be adduced.
(2) The production of any document or the examination of any witness or the adducing of any evidence under Sub-rule (1) may be done either before the Tribunal or before such departmental authority as the Tribunal may direct.
(3) Where any direction has been made by the Tribunal to produce any documents or to examine any witnesses or to adduce any evidence before any departmental authority, the authority shall comply with the directions of the Tribunal and after such compliance send the documents, the record of the deposition of the witnesses or the record of evidence adduced, to the Tribunal.
(4) The Tribunal may, of its own motion, call for any document or summon any witnesses on points at issue, if it considers necessary to meet the ends of justice".
This shows that additional evidence can be produced in appeal only on the basis of affidavit filed by the party showing sufficient cause and if the authorities are satisfied that the case was decided without giving sufficient opportunity to the party to adduce evidence. Order 41 Rule 27 of the Code of Civil Procedure gives power to the Appellate Court to receive fresh evidence. Additional evidence can be adduced only on the basis of a petition showing why the evidence could not be adduced before the lower authorities and it is necessary to give opportunity to the opposite side to rebut the case of the applicant. Further, the authorities have to be satisfied that there was no opportunity given to the applicant to produce evidence before the lower authorities and that fresh evidence was necessary to decide the case. Admittedly, no application was filed under Rule 23 by the Department. It cannot be said that the reference to the book 'Normal and Therapeutic Nutrition' is not an item of evidence, because that was referred for the purpose of showing that addition of the substances was for the purpose of supplying body nutrients. Opportunity should have been given to the opposite side to answer to any evidence let in by the appellant. Here no opportunity was given to the writ appellant to defend the contention raised by the respondents that the addition of the articles amounts to supplying body nutrients. Hence, according to us, there is violation of Rule 23. Further we also find that it is a new case set up. It cannot be denied that the case supplying vital body nutrient appears for the first time in the order of the Tribunal. In this context, we shall refer to a passage from Wade's on Administrative Law, seventh edition at page 531. Under title 'Fair Hearings-General Aspects' the author states as follows:
"A proper hearing must always include a fair opportunity to those who are parties in the controversy for correcting or contradicting anything prejudicial to their view"
The author quotes the decision of Lord Denning in Kanda v. Government of Malaya (1962) AC 322 - wherein it was held as follows :
"If the right to be heard is to be a real right which is worth anything, it must carry with it a right in the accused man to know the case which is made against him. He must know what evidence has been given and what statements have been made affecting him : and then he must be given a fair opportunity to correct or contradict them".
Thus, it is an elementary principle or fair hearing, which is one of the basic features of natural justice. In this case, we find that such an opportunity was not given to the appellant by the Tribunal. In this context, it is pertinent to refer to the decision of the Supreme Court in Reckitt & Colman of India Ltd. v. Collector of Central Excise, 1996 (88) E.L.T. 641, where the Supreme Court held as follows:
"It was beyond the competence of the Tribunal to make out in favour of the Revenue a case which the Revenue had never canvassed and which the appellants had never been required to meet".
So also in Commissioner of Customs, Calcutta v. Hanuman Trading Corporation. - 1997 (95) E.L.T. 8, in paragraph 5 the Supreme Court held as follows:
"There is no controversy that the respondents did not avail of the opportunity before the authorities to adduce any evidence and it was only before the Tribunal that material was produced by the respondents/sole proprietor challenging confiscation and penalty. In the facts and circumstances of the case, we are satisfied that the course adopted by the Tribunal of permitting respondents to adduce evidence before it for the first time and then in proceeding to decide the case on merits on which basis was not correct. If the Tribunal was of the view that a fresh opportunity was required to be given to the respondents to adduce evidence and show cause in response to the notice given to the respondents, the appropriate course for adoption was to remit the matter to the Commissioner of Customs, Calcutta. For this reason alone, the Tribunal's order must be set aside."
Thus we are of the view that the question whether addition to Tricalcium Phosphate and Vitamin D will amount to nutrient supplement was a case developed before the Tribunal by the Department and this was done without giving an opportunity to the appellant. Hence, according to us, there is violation of the principles of natural justice and violation of Rule 23 of the Appellate Tribunal (Procedure) Rules in passing Ext. P7 order.
19. Point No. 3 - This is with regard to the case whether the Appellate Court should interfere because a discretion has been exercised by the learned single Judge. Learned Counsel for the respondents Sri Rama Kumar then submitted that the learned single Judge found that the Writ Petition was not maintainable and that the principles of natural justice was not violated. In support of the above contention, the learned Counsel relied on the decision in Lakshmanan v. Roy Alexander, 1992 (2) KLT 634, wherein a Bench of this Court held that unless it is shown that a decision of the single Judge is manifestly wrong, it was not proper to interfere with that discretion exercised by the learned single Judge when the learned Judge refused to exercise the jurisdiction on the basis of alternate remedy. Paripoornan, J. speaking for the Bench held as follows :
"We are unable to accept the above plea. It is undoubted law that the availability of an alternate remedy is no bar for the exercise of the discretionary jurisdiction vested in this Court under Article 226 of the Constitution of India. It cannot be denied that the availability of an equally efficacious alternate remedy provided by the statute is a wrong circumstance which will dissuade this Court to exercise the discretionary jurisdiction under Article 226 of the Constitution of India. If in a particular case, even if it is shown that there is patent illegality or irregularity in the proceedings or a fundamental error has taken place, the single Judge exercising the jurisdiction under Article 226 of the Constitution of India, in his discretion, relegates the party to the alternate remedy provided by the statute, it cannot be stated that the single Judge was wrong in doing so. It may be that in such a case, the discretionary jurisdiction under Article 226 of the Constitution could have been exercised. But the failure to so exercise the said jurisdiction cannot be said to be wrong, to merit interference by the appellate court. It is settled law that on the hearing of the appeal it is for the appellant to show that the decision appealed against is wrong. It will not be sufficient for the appellant to urge or plead that a contrary conclusion is possible on the basis of the materials disclosed in the case. The burden is on the appellant to provide that the decision appealed against is manifestly wrong..."
20. In this context, we shall refer to the Supreme Court decision in Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad, AIR 1969 SC 556. There, answering to a similar contention, the Supreme Court held as follows:
"It was contended by Mr. Chagla on behalf of the respondent that in dismissing the writ petition the High Court was acting in its discretion. But it is manifest in the present case that the discretion of the High Court has not been exercised in accordance with law and the judgments of the Division Bench dated March 27,1964 and of the learned single Judge dated February 13,1964 summarily dismissing the writ petition are defective in law".
So far as the present case is concerned, the learned single Judge went into the question whether there is any violation of the principles of natural justice and gave a finding that there is no violation of any Rule or the principles of natural justice. Certainly in appeal we can go into the question whether the finding on this issue is correct or not, even though the learned single Judge has taken the view that alternate remedy is available. Since such a finding has been entered by the learned single Judge we went into the question and whether the view that Ext. P7 order has been passed in violation of Rule 23 of the Appellate Tribunal (Procedure) Rules and in violation of the principles of natural justice.
21. In the above view of the matter, we quash Ext. P7 and direct the second respondent to reconsider Appeal No, E/3118/91-D afresh. If the Department wishes to raise the contention that the addition of Tricalcium Phosphate and Vitamin D will amount to nutrient supplement and also wishes to rely on any authority for proving the above case, it has to file a petition under Rule 23 of the Appellate Tribunal (Procedure) Rules. Then the appellant will be given an opportunity to file objection to it including the objection that the contention cannot be raised, since admittedly it was not raised before the first two authorities. The Tribunal may dispose of the appeal as expeditiously as possible. The judgment of the learned single Judge is set aside.