2024 (5) TMI 1274 - HC - Central Excise

Maintainability of petition - availability of alternative remedy - requisite documents relied upon, not supplied - opportunity of hearing not provided - violation of principles of natural justice - Recovery of short paid Central Excise Duty. Maintainability of petition - availability of alternative remedy - HELD THAT - It hardly needs to be stated that the rule of alternate remedy is not a Thumb Rule to non-suit every litigant approaching the writ Court. It all depends upon the facts and circumstances of each case and the requirement of doing justice to the party aggrieved. This Court finds support in its view by the judgment passed in the case of M/S GODREJ SARA LEE LTD. VERSUS THE EXCISE AND TAXATION OFFICERCUM- ASSESSING AUTHORITY ORS. 2023 (2) TMI 64 - SUPREME COURT wherein it has been observed that availability of alternative remedy does not operate as an absolute bar to the 'maintainability' of a writ petition and that the rule, which requires a party to pursue such remedy provided by a statute, is a rule of policy, convenience and discretion evolved by the judiciary rather than a rule of law. Therefore, in all the cases, the entities answering Article 12 of the Constitution of India cannot press into service the doctrine of alternative remedy as the China Wall against the invocation of writ jurisdiction. Failure to supply documents reled upon - opportunity of hearing not provided - violation of principles of natural justice - Recovery of short paid duty - HELD THAT - Undisputedly, the petitioner has not been supplied with the documents, on the basis of which show cause notice was issued and despite repeated communications from the petitioner, the said documents were not provided due to which the petitioner would not be in a position to give reply to the show cause notice which culminated into passing of final order and judgment of recovery - even on remand, the respondent no.2 without adhering to the directions of Commissioner (appeals) i.e. without providing requisite documents and in the absence of affording opportunity of hearing has again proceeded to pass a final order of recovery alongwith levying of penalty thereby again violating the principles of natural justice. Under such circumstances, the final order of recovery dated 29.03.2024 is not allowed to stand. The matter is remanded back to the respondent no.2 for fresh adjudication - Petition allowed by way of remand.

Summary

Issues Involved:
1. Non-supply of relied upon documents (RUDs) to the petitioner.
2. Violation of principles of natural justice.
3. Maintainability of the writ petition despite the availability of an alternative remedy.

Summary:

Non-supply of Relied Upon Documents (RUDs):
The petitioner, a partnership firm engaged in the manufacture of Pan Masala, Mouth Freshner, and Sweet Supari, challenged the order dated 29.03.2024 issued by respondent no.2 for recovery and penalty. The petitioner argued that despite being issued a show cause notice on 09.11.2012, only 6 out of 32 relied upon documents were provided. The petitioner was assured that the remaining documents would be supplied, which did not happen, leading to the inability to file a proper reply. Consequently, the respondent no.2 passed a final order on 16.11.2022 confirming the demand and penalty without providing the necessary documents. The Commissioner (Appeals) allowed the petitioner's appeal and remanded the matter for fresh adjudication, but respondent no.2 again failed to provide the documents and passed another recovery order on 29.03.2024.

Violation of Principles of Natural Justice:
The petitioner contended that the final order of recovery and penalty was passed in gross violation of the principles of natural justice as they were not afforded a proper opportunity of hearing. The respondent no.2 did not comply with the Commissioner (Appeals) order to provide the necessary documents before adjudicating the show cause notice afresh. This non-compliance led to the violation of the petitioner's constitutional rights u/Article 19(1)(g) and 21.

Maintainability of the Writ Petition:
The respondent opposed the petition, arguing that the petitioner had not claimed non-receipt of documents in their communication and had an alternative remedy of appeal. The respondent cited various judgments to support their contention that the petitioner should have availed the alternative remedy. However, the court held that the rule of alternative remedy is not an absolute bar to the maintainability of a writ petition. The court referred to the judgment in Godrej Sara Lee Ltd. Vs. Excise & Taxation Officer, which states that the availability of an alternative remedy does not oust the jurisdiction of the high court and that the rule is one of policy, convenience, and discretion rather than law.

Judgment:
The court found that the petitioner was not supplied with the necessary documents, which prevented them from replying to the show cause notice, leading to the final order of recovery. The respondent no.2 did not adhere to the directions of the Commissioner (Appeals) and violated the principles of natural justice by not providing the documents and opportunity of hearing. Consequently, the final order dated 29.03.2024 was set aside, and the matter was remanded back to respondent no.2 for fresh adjudication. Respondent no.2 was directed to provide all relied upon documents to the petitioner and then proceed to pass an order on the merits after giving due opportunity of hearing. The petition was allowed with no order as to cost.