1999 (6) TMI 39 - HC - Central Excise

Summary

Issues Involved:
1. Maintainability of the petition under Article 226 of the Constitution of India.
2. Violation of Rule 23 of the Appellate Tribunal (Procedure) Rules and principles of natural justice.
3. Discretion exercised by the learned single Judge.

Issue-wise Detailed Analysis:

1. Maintainability of the petition under Article 226 of the Constitution of India:
The appellant contended that the Original Petition was maintainable despite the availability of an appeal under Section 35L of the Central Excises and Salt Act, 1944, because it involved allegations of procedural violations and breaches of natural justice. The learned single Judge had initially dismissed the petition on the grounds that an appeal to the Supreme Court was available under Section 35L. However, the High Court noted that the existence of an alternate remedy does not bar the maintainability of a writ petition if there is a violation of fundamental rights, statutory provisions, or principles of natural justice. The Court cited various precedents, including AIR 1958 SC 86 and AIR 1961 SC 1506, to support the view that the rule requiring exhaustion of statutory remedies is a rule of policy, convenience, and discretion rather than a rule of law. Consequently, the Court disagreed with the learned single Judge's conclusion that the Original Petition was not maintainable.

2. Violation of Rule 23 of the Appellate Tribunal (Procedure) Rules and principles of natural justice:
The appellant argued that the Tribunal had accepted fresh evidence and decided the case based on new arguments not presented before the lower authorities. Specifically, the Tribunal had relied on extracts from the book 'Normal and Therapeutic Nutrition' to conclude that the addition of Tricalcium Phosphate and Vitamin D to Dextrose Mono Hydrate was for the purpose of providing nutrients, which was a new contention. Rule 23 of the Appellate Tribunal (Procedure) Rules stipulates that additional evidence can only be admitted if the Tribunal is satisfied that it is necessary and only after providing an opportunity for the opposing party to rebut it. The High Court found that the Tribunal had violated Rule 23 by accepting new evidence without giving the appellant an opportunity to respond, thereby breaching the principles of natural justice. The Court emphasized that a proper hearing must include a fair opportunity for parties to correct or contradict anything prejudicial to their case.

3. Discretion exercised by the learned single Judge:
The respondents argued that the learned single Judge had exercised discretion correctly by dismissing the petition on the grounds of alternate remedy. However, the High Court noted that the learned single Judge had also examined the merits of the case and concluded that there was no violation of natural justice. The High Court held that it was within its purview to review whether the learned single Judge's findings on the merits were correct. Upon review, the High Court found that the Tribunal's decision was indeed in violation of Rule 23 and the principles of natural justice. Consequently, the High Court quashed the Tribunal's order and directed the Tribunal to reconsider the appeal afresh, allowing the Department to file a petition under Rule 23 if it wished to introduce new evidence.

Conclusion:
The High Court allowed the writ appeal, set aside the judgment of the learned single Judge, and quashed the Tribunal's order. The Tribunal was directed to reconsider the appeal afresh, with the Department required to comply with Rule 23 if it wished to introduce new evidence. The judgment emphasized the importance of adhering to procedural rules and ensuring a fair hearing in accordance with the principles of natural justice.