2007 (7) TMI 228 - HC - Central Excise

Gutka case concealment of filing of appeal with tribunal - maintainability of this writ petition petitioner not informed the HC that he has already availed statutory alternative remedy by filing the appeal to tribunal hence challenge to decision of commissioner of imposing duty and penalty of 320 crore in this petition is not permissible plea of petitioner that he filed petition for speedy disposal, is not acceptable petition not entertainable mere because of heavy duty involved

Issues Involved:
1. Maintainability of the writ petition.
2. Interpretation of Section 11A(2A)(a) of the Central Excise Act, 1944.
3. Alleged concealment of material facts by the petitioner.
4. Imposition of costs for misuse of the judicial process.

Issue-wise Detailed Analysis:

1. Maintainability of the Writ Petition:
The respondent raised a preliminary objection regarding the maintainability of the writ petition due to the availability of a statutory alternative remedy under Section 35B of the Central Excise Act, 1944. The petitioner argued that the writ petition was maintainable despite the alternative remedy, citing the Supreme Court's decision in Whirlpool Corporation v. Registrar of Trade Marks, Mumbai, which allows for exceptions when there is a violation of fundamental rights, principles of natural justice, or when the order is wholly without jurisdiction. However, the court noted that the petitioner had already filed an appeal before the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) on 17-4-2007 but failed to disclose this fact to the court. The court held that the writ petition was not maintainable due to the availability of an alternative remedy and the petitioner's concealment of material facts.

2. Interpretation of Section 11A(2A)(a) of the Central Excise Act, 1944:
The petitioner contended that the impugned order was passed beyond the one-year period stipulated in Section 11A(2A)(a) of the Act, making it void and without jurisdiction. The court examined the provision, which states that the duty shall be determined within one year "where it is possible to do so." The court found that the phrase "where it is possible to do so" implies that the one-year period is not rigid and can be extended if circumstances warrant. The court noted that the petitioner did not provide any pleading to show that the delay was unjustified. The court also considered that the proceedings involved multiple parties and concluded that the order was passed within a reasonable time after the hearings concluded.

3. Alleged Concealment of Material Facts by the Petitioner:
The court observed that the petitioner had failed to disclose the filing of an appeal before CESTAT, which was a material fact. The court emphasized that a party seeking relief under Article 226 must approach the court with clean hands and disclose all relevant facts. The petitioner's conduct of pursuing simultaneous remedies and not informing the court about the appeal was deemed reprehensible and amounted to an abuse of the judicial process.

4. Imposition of Costs for Misuse of the Judicial Process:
The court held that the petitioner's conduct warranted the imposition of exemplary costs to deter such behavior in the future. The court cited various precedents emphasizing that litigants must not misuse the judicial process and should be penalized for doing so. Consequently, the court dismissed the writ petition with costs of rupees two lacs, to be deposited with the Registrar of the court. The amount was to be divided equally between the Legal Aid Society of the High Court and the Mediation Center.

Conclusion:
The writ petition was dismissed due to the availability of an alternative remedy and the petitioner's concealment of material facts. The court imposed exemplary costs on the petitioner to deter misuse of the judicial process. The court also clarified that its observations should not influence the pending appeal before the Tribunal.

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