1986 (2) TMI 71 - HC - Central Excise

Summary

Issues Involved:
1. Legality of the notification investing the Director of Anti Evasion with the powers of the Collector of Central Excise.
2. Alleged violation of principles of natural justice in the passing of the impugned order.
3. Non-application of mind and procedural impropriety in the passing of the impugned order.
4. The appropriateness of the High Court entertaining the petition despite the availability of a statutory appeal.

Summary of Judgment:

Issue 1: Legality of the Notification
The petitioners challenged the notification dated August 6, 1984, investing the Director of Anti Evasion with the powers of the Collector of Central Excise. The Court found the notification valid but noted that the powers conferred should not have been exercised by someone closely involved in the investigation.

Issue 2: Violation of Principles of Natural Justice
The Court observed that the respondent No. 1, who was closely connected with the raids and investigation, should not have undertaken the adjudication. The principle that "a prosecutor or a complainant can never be a judge of his own cause" was emphasized. The Court held that respondent No. 1 flouted every principle of natural justice, making the impugned order unsustainable.

Issue 3: Non-application of Mind and Procedural Impropriety
The Court found serious procedural impropriety in the manner the impugned order was passed. It was deemed physically impossible for respondent No. 1 to have dictated and signed a 130-page order within such a short time. The presence of corrections and interpolations not made by respondent No. 1 further indicated that the order was not prepared solely by him. The imposition of a Rs. 50,00,000 penalty on petitioner No. 2 without a show cause notice was another instance of non-application of mind.

Issue 4: Appropriateness of High Court Entertaining the Petition
Despite the petitioners filing a statutory appeal, the Court entertained the petition due to the gross miscarriage of justice and the inherent lack of jurisdiction. The Court referenced the Supreme Court's stance that in cases of natural justice violations, the High Court should exercise jurisdiction.

Conclusion:
The impugned order dated June 1, 1985, and the corrigendum dated June 6, 1985, were quashed. The Court did not find it necessary to strike down the notification or the show cause notice, allowing for fresh adjudication by a new officer. The respondents were ordered to pay the costs of the petitioners.