2001 (8) TMI 1400 - HC - Central Excise

Summary

Issues Involved:
1. Legality of the Magistrate's procedure in allowing a supplementary complaint.
2. Applicability of Section 9AA of the Central Excises and Salt Act, 1944, to acts committed before its enactment.
3. Retrospective application of substantive versus procedural law under Article 20(1) of the Constitution.

Detailed Analysis:

1. Legality of the Magistrate's Procedure in Allowing a Supplementary Complaint:
The Magistrate's procedure in permitting additional accused to be brought in by way of a supplementary complaint is found to be legally unsustainable. Initially, the complaint against two accused was filed under Section 200 Cr.P.C., and the Magistrate took cognizance. Once cognizance is taken under Section 190(1)(a) Cr.P.C., the further course of action should be governed by Chapter XIX or Chapter XX Cr.P.C. The only legally permissible method to add new accused in such a proceeding is by invoking Section 319 Cr.P.C. at the appropriate stage. The complainant cannot file supplementary complaints to bring in additional accused at different times. Therefore, entertaining the supplementary complaint by the Magistrate is not legally sustainable.

2. Applicability of Section 9AA of the Central Excises and Salt Act, 1944, to Acts Committed Before Its Enactment:
Section 9AA of the Act, which deals with offences by companies, was inserted by the Central Excises and Salt (Amendment) Act, 1985, effective from 27-12-1985. The period concerned for the alleged evasion of duty is from 1-10-1975 to 28-2-1983. Section 9AA cannot be applied retrospectively to acts committed before its enactment as it would violate Article 20(1) of the Constitution. Article 20(1) mandates that no person shall be convicted of any offence except for the violation of a law in force at the time of the commission of the act charged as an offence. Section 9AA is substantive law creating an offence for the first time against specific categories of persons and is not merely procedural. Therefore, applying Section 9AA to acts committed before its enactment is unconstitutional.

3. Retrospective Application of Substantive Versus Procedural Law Under Article 20(1) of the Constitution:
The court examined whether Section 9AA is substantive or procedural. If it is substantive, it cannot be applied retrospectively. If procedural, it could have retrospective effect. The court concluded that Section 9AA is substantive as it creates new offences for specific categories of persons. The provision's wording and legislative intent indicate that it was not possible to convict persons covered under Section 9AA merely under Section 9 before its enactment. The court referenced multiple judgments, including those from the Gujarat High Court and Bombay High Court, which support the view that Section 9AA is substantive and cannot be applied retrospectively. The court also distinguished Section 9AA from procedural provisions in other statutes, reinforcing that Section 9AA creates new liabilities and is not merely procedural.

Conclusion:
The petitions are allowed, and the impugned proceeding is quashed concerning the petitioners. The Magistrate's procedure in entertaining the supplementary complaint is legally unsustainable, and Section 9AA, being substantive law, cannot be applied retrospectively to acts committed before its enactment, as it would violate Article 20(1) of the Constitution.