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TMI Blog1983 (8) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... oner, that "on a perusal of invoices it is seen that the transformers were sold by the petitioner after 1-4-1979 to M/s. Genelac Ltd." It was said that it is a related company of the petitioner, on the ground that "the petitioner and M/s. Genelac Ltd. are subsidiary companies of M/s. G.E.C. of India, and thus M/s. Genelac Ltd. becomes a related company". The petitioner was requested to file the price lists immediately under the Central Excise Rules, 1944, (vide Ext. P5). By Ext. P6, dated 29-1-1982 the petitioner filed their objections thereto. The petitioner denied the fact that M/s. Genelac Limited is a subsidiary company of the petitioner-company. According to the petitioner, it will not be a related company as stated by the 2nd respondent in Ext. P5. It was submitted that they may not be requested to file the price lists under Rule 177C of the Central Excise Rules. It was also specifically stated that they may be allowed to continue to pay duty on invoice value as provided in Notification No. 120/75, dated 30-4-1975. Ext. P7 order was passed by the 1st respondent on 15-3-1962. In this O.P. the petitioner assails Ext. P7 on many grounds. 2. Counsel for the petitioner Mr. Govind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his objections against Ext. P5 proposal and the petitioner did file his objection, Ext. P6. According to the Counsel for Revenue, opportunity to afford to the petitioner to file his representations, is sufficient compliance of the requirements of law and there is no violation of the principles of natural justice. 4. The interesting but vexed question that arises for consideration in this case, is whether an opportunity to be heard orally, should be afforded in all case, invariably, before an adverse order is passed against a person. Is oral hearing, an essential pre-requisite, in order to comply with the principles of natural justice? According to petitioner's Counsel, an oral hearing is an essential postulate of the content of `natural justice' in all cases whereas according to the Counsel for Revenue, it is not. It appears to me, that the oral position is, in between the two extreme positions canvassed by Counsel appearing for both sides. The answer to this question depends upon the facts and circumstances of each case. 5. Let us examine the position with reference to leading text books and the important decision on the subject. Halsbury's Laws of England (Fourth Edn.), Vol. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r "opportunity to be heard" are used in legislation, they nearly always denote a hearing at which oral submissions and evidence may be tendered. In some legislative contexts the term "hearing" is used in contract to "inquiry"; in practice a hearing may be held in private, though members of the general public are not necessarily excluded; the conduct of both hearings and inquiries in town planning matters is oral and is now governed by similar procedural rules. In the absence of clear statutory guidance on the matter, one who is entitled to the protection of the audi alterem partem rule is now prima facie entitled to put his case orally; but in a number of contexts the courts have held natural justice to have been satisfied by an opportunity to make written representations to the deciding body, and there are still many situations where a person will be able to present his case adequately in this way." Garner in his book "Administrative Law" (Fourth Edn.) at page 118 states : "It is then clear that a right to a hearing is not necessarily a right to a personal hearing before the person who is to make the decision. Sometimes the "appellant" may not have a right to any oral hearing; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be affected by the order. Except in proceedings in Courts, a mere denial of opportunity of making an oral representation will not, without more, vitiable the proceeding. A party likely to be affected by a decision is entitled to know the evidence against him, and to have an opportunity of making a representation. He however cannot claim that an order made without affording him an opportunity of a personal hearing is invalid. The President is performing a judicial function when he determines a dispute as to the age of a Judge, but he is not constituted by the Constitution a Court. Whether in a given case the President should give a personal hearing is for him to decide. The question is left to the discretion of the President to decide whether an oral hearing should be given to the Judge concerned. The record apply supports the view that the President did not does it necessary to give an oral hearing. There were no complicated questions to be decided by the President." In Rose v. Humbles [1970 (2) All. E.R. 519] an assessment was made in respect of unexplained increase in the tax payer's wealth (assessee's) alleging that it represented payments from undisclosed profits of company of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... professional assistance. Moreover, written submissions do not afford the flexibility of oral presentations; they do not permit the recipient to mould his argument to the issue the decision maker appears to regard as important. Particularly where credibility and veracity are at issue, as they must be, in many termination proceedings, written submissions are a wholly unsatisfactory basis for decision." I would respectfully and gratefully adopt the above statement as my own. 6. It should be remembered that the requirement of audi alterem partem is to give an opportunity to the person likely to be affected, an opportunity to be heard, "an opportunity to blow off steam", so that justice is not only done but is also seem to be done. It will also be conducive to `fair' hearing and will be a safeguard against arbitrary action. The recent decision of the Supreme Court reported in Ajay Hasia v. Khalid [AIR 1981 S.C. 487 (499)] states : "It must therefore now be taken to be well settled that what Article 14 strikes at is arbitrariness because an action that is arbitrary, must necessarily involve negation of equality. The doctrine of classification on which is evolved by the Courts is not p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... doption of a fuel both enterprising and beneficient, which can prevent much injustice at negligible cost to the efficiency of good administration. Granted that the discretion in exercising an administrative power belongs to the administrator; yet the courts can insist that before acting he shall at least find out the facts, and find out in particular whether there is another side to the case. The wielding of power would indeed be arbitrary if this were neglected and the courts have provided legal sanction to a canon of good administration by holding that unless the other side is first considered the power is improperly exercised. It is quite wrong to suppose that the rule is of little value in practice because it gives merely an opportunity, as the Attorney General has put it, for the objector to `blow off stem'. Legally, the administrator is entitled to disregard all that is said to him and exercise his free discretion. But the courts well know that is not how responsible officials Act. The rule is a safeguard not against perversity but against well-meaning ignorance or carelessness—as much more likely danger. The official, endowed with power, is kept in the light leading-strings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pression that the petitioner will be heard before an order is passed. The petitioner was heard orally on 28-12-1981. Apparently the 1st respondent was not proceeding on the basis originally assumed, that the supply of transformers to M/s. G.E.C. Ltd. will be to a related person. It was subsequently by Ext. P5 notice the 2nd respondent informed the petitioner of a new or different basis that the sales by the petitioner to M/s. Genelac Company Ltd., will be treated as sales to related persons and so the benefit of Notification No. 120/75 will not be available. The petitioner no doubt filed Ext. P6 objection. But in the way, things turned out and in view of the questions of law that required to be focussed and decided and in the light of the principles to be deduced from the legal position adverted to hereinabove, I am of opinion, that this is certainly a fit and proper case where the 1st respondent should have heard the petitioner orally before passing Ext. P7 order. It is common ground that the 1st respondent did not hear the petitioner orally before rendering Ext. P7 order. On that short ground, I hold that Ext. P7 order is illegal. It is violative of the principles of natural just ..... X X X X Extracts X X X X X X X X Extracts X X X X
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