1970 (3) TMI 55 - SC - Central Excise

Whether an assessment made by a subordinate officer in accordance with the instructions issued by the Collector to whom an appeal lay against the order of that subordinate officer can be called a valid assessment in the eye of law? Held that - In the present case, when the assessment is to be made by the Deputy Superintendent or the Assistant Collector, the Collector, to whom an appeal lies against his order of assessment, cannot control or fetter his judgment in the matter of assessment. If the Collector issues directions by which the Deputy Superintendent of the Assistant Collector is bound no room is left for the exercise of his own independent judgment. These appeals must succeed on the ground that the impugned orders were vitiated for the reasons given and deserve to be set aside. The assessing authorities, namely, the Deputy Superintendent or the Assistant Collector shall make fresh assessment of duty in accordance with law and thereafter the question of refund will be decided by the appropriate authorities

Summary

Issues:
Assessment of excise duty based on instructions from the Collector, Validity of assessment made by subordinate officer, Quasi-judicial nature of assessment proceedings, Independence of assessing authorities, Effect of directions given by Collector on assessment, Right to appeal against assessment orders, Central Government's role in upholding assessment decisions.

Analysis:
The judgment involves appeals against orders made by the Central Government under Section 36 of the Central Excises and Salt Act, 1944, concerning the assessment of excise duty on creamwove paper. The main issue revolves around the validity of the assessment made by a subordinate officer based on instructions from the Collector, against which an appeal could be filed. The court emphasized the importance of independent judgment in assessment proceedings, highlighting that assessing authorities exercise quasi-judicial functions and must act in a judicial and independent manner.

The court held that if the judgment of assessing authorities is controlled by directions from a higher authority like the Collector, it undermines their independence and renders the appeal process a mere formality. Drawing from previous decisions, the court concluded that invalid directions vitiate the assessment proceedings. In this case, the court found that the orders made by the assessing authorities were vitiated due to the invalid directions from the Collector, leading to the quashing of the orders.

The judgment underscores the significance of allowing assessing authorities to exercise their independent judgment in assessment matters, free from external influence. The court directed the assessing authorities to conduct fresh assessments of duty in accordance with the law, emphasizing the need for a fair and unbiased assessment process. The appeals were allowed, and the court awarded costs to the appellants, signaling a victory for fair and independent assessment practices in excise duty matters.