1973 (3) TMI 59 - HC - Central Excise

Summary

Issues Involved:
1. Validity of the Trade Notice dated 21st May 1965.
2. Authority of the respondents to issue the Trade Notice.
3. Petitioner's right to be assessed under the Central Excises and Salt Act, 1944.
4. Petitioner's right to maintain the application under Article 226 of the Constitution.

Detailed Analysis:

1. Validity of the Trade Notice dated 21st May 1965:
The petitioner challenges the issuance of the Trade Notice dated 21st May 1965, which imposes restrictions on the right to be assessed concerning shoddy wool. The Trade Notice specifies that shoddy yarn must conform to certain specifications, including a requirement that it contains not less than 80% wool fibers. The petitioner argues that this notice imposes undue restrictions and is not backed by any statutory authority.

2. Authority of the respondents to issue the Trade Notice:
The court held that there is no authority under any statute or rules framed under any statute for the issuance of the Trade Notice. The court referred to several Supreme Court decisions, including Orient Paper Mills Ltd. v. Union of India and South Bihar Sugar Mills Ltd. v. Union of India, which emphasized that assessing authorities under the Central Excises and Salt Act, 1944, must act in a judicial or quasi-judicial manner. The court concluded that the respondents cannot levy duty and make assessments in terms of the trade notice, as it lacks statutory sanction.

3. Petitioner's right to be assessed under the Central Excises and Salt Act, 1944:
The court emphasized that the petitioner has the right to be assessed in accordance with the provisions of the law and is protected against any executive direction not sanctioned by legislative provisions. The court stated that any assessment or levy of duty must be done in accordance with the statute or rules framed under the statute, and not based on any executive direction or new definitions of items in the taxing statute.

4. Petitioner's right to maintain the application under Article 226 of the Constitution:
The respondents contended that the petitioner had no right to maintain the application under Article 226 of the Constitution, arguing that the petitioner should agitate its grievance in the appellate proceedings. However, the court held that a trader or businessman is entitled to be assessed or proceeded against in accordance with law, and any interference by the executive authority with that right amounts to an infringement. The court found that the trade notice is being enforced against the petitioner, and therefore, the petitioner is entitled to challenge it under Article 226 of the Constitution.

Conclusion:
The court restrained the respondents from giving effect to the Trade Notice dated 21st May 1965 and directed that the levy of duty on the petitioner should be made ignoring the said trade notice. A writ in the nature of Mandamus was issued accordingly, and the rule was made absolute to the extent indicated. There was no order as to the costs of the application, and the petitioner undertook not to insist on the hearing of any appeal or assessment where the said notice might be relevant for a period of eight weeks.