9911796707
TMI Blog1988 (10) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... Exhibit 'M' to the petition. 2. Briefly, the facts are that the petitioner No. 1 is a private limited company registered under the provisions of the Companies Act, 1956, The petitioner No. 2 is a share-holder of the said company. The petitioner No. 1 is a leading manufacturer of various qualities of paper having its factory at Ballarpur in the district Chandrapur. Since the paper was a controlled and/or essential commodity under the Essential Commodities Act, 1955, in order to maintain and to increase supplies of paper and for securing its equitable distribution and availability at fair prices, the Central Government in the exercise of the power under Section 3 of the Essential Commodities Act, 1955, issued an order known as "Paper (Regulation of Production) Order, 1978" (for short, "the Paper Regulation Order"). 3. The expression "white printing paper" is defined under Clause 2(i) in the Paper Regulation Order. In regard to the said white printing paper, Clause 3(a) of the said Order provided that every manufacturer should manufacture in respect of every month commencing on and from the 1st day of April 1978, and every quarter commencing on and from the 1st day of April 1978, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve out certain exceptions to the retention prices prescribed in Clause 6. 5. In the light of the above provisions of the Paper Regulation Order and the Paper Control Order it is submitted on behalf of the petitioners that it is obligatory upon the paper manufacturer to produce 30 per cent of the total production of paper and paper-boards as white printing paper and to dispose of the said paper as per the directions issued by the Central Government under Clause 4 of the Paper Control Order. It is further submitted that by issuing various orders under Clause 4, the Central Government or its delegate under Clause 4, has directed the petitioner No. 1 to sell white printing paper to the various institutions for various educational purposes such as for text books, exercise books and University Examinations etc. whose names are given in each of such orders. The petitioner further submit that it is in accordance with the said orders issued by the authorities concerned that the white printing paper, which is the subject matter of the instant writ petition, is disposed of or sold by the petitioners. 6. It may then be seen that as per the notification dated 16-3-1976, which the Central Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be actually used for claiming a concessional rate in regard to printing and writing paper whereas the language of the entry No. 1 referred to above shows that the condition therein is that such white printing paper should be supplied to the customers referred to therein. 8. At this stage, for proper understanding of the controversy in this petition, it is necessary to notice the "Self Removal Procedure" which was introduced by amendment of the Rules by the notification dated 14-7-1969 which has inserted in the Rules Chapter VII-A on removal of excisable goods on determination of duty by producers, manufacturers or private warehouse licensees. The petitioners have been following the said self-removal. It may be seen that prior to the introduction of the self-removal procedure there was staff of the Excise Department present in the factory itself. When the said staff was satisfied about the excise duty payable upon the goods in question, the excisable goods were allowed to be removed from the factory under the gate-passes which were in the prescribed proforma prepared for the said purpose and which had to be countersigned by the officer of the Excise Department, deputed in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment giving the details of the show cause notices issued to them by the Assistant Collector, Central Excise Division, Chandrapur. The said Tabular statement in Exhibit 'M' shows that all the show cause notices relate to the period from February 1982 to December 1983. The said Exhibit 'M' shows that there are 16 show cause notices issued to the petitioners during the above period and that actually the orders are passed by the aforesaid Assistant Collector, Central Excise, in six of them referred to at serial Nos. 1 to 6 of the said Exhibit 'M'. Since all the show cause notices and also the six orders passed by the aforesaid Assistant Collector are according to the petitioners identical, they have filed only a specimen copy of the show cause notice dated 3/5-8-1982 as Exhibit 'J' and a specimen copy of the order of the Assistant Collector dated 17-11-1983 in respect of the aforesaid show cause notice dated 3-8-1982 as Exhibit 'L' to the petition. 11. The petitioners filed their replies to the show cause notices issued to them. A specimen copy of the reply dated 24-11-1982 to the aforesaid show cause notice dated 31-8-1982 is filed with the petition as Exhibit 'K'. In reply to the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the relevant documents because of the strike of the workers in the factory during August 1983 and had, therefore, asked for suitable date thereafter in October 1983. However, by the letter dated 3-9-1983, the Assistant collector, Central Excise, Division Chandrapur, at Nagpur did not accede to the above request and fixed the case for verification on 5-9-1983. It is after 5-9-1983, that the Assistant Collector, i.e. the respondent No. 2, passed the orders nearabout the same time in regard to six show icause notices which are referred to at Serial Nos. 1 to 6 of Exhibit'M'. 13. It is after these orders were passed in the aforesaid six show cause notices and it is before the orders could be passed in the remaining show cause notices at Serial Nos. 7 to 16 of Exhibit 'M' that the petitioners have moved this Court for necessary relief in this matter. Although a specimen copy of the show cause notice dated 3-8-1982 and a specimen copy of the order of the Assistant Collector in regard to the said show cause notice are alone filed as Exhibits 'J' and 'L', in the tabular statement in Exhibit 'M' the petitioners have included all the 16 show cause notices issued against them and the six or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h one of the show cause notices referred to in Exhibit 'M' and for the rest the petitioners will have to file separate writ petitions if so advised. 16. It is true that the petitioners have clubbed all the show cause notices referred to in Exhibit 'M' in one petition. It is also true that they relate to different periods and separate orders either are passed or will have to be passed in respect of the separate show cause notices. Normally, had we been really required to consider separate evidence or separate questions of fact in each of these show cause notices we would have directed the petitioners to make a choice to proceed with one of the show cause notices and to file separate writ petitions with regard to the others, if so advised. However, as we will hereafter show, the questions of fact and law which we have to deal with in this writ petition are all common in all these show cause notices and hence they can conveniently be disposed of in this common petition without causing any inconvenience. It may be seen that the objection in regard to common petition is not in that sense an objection to the jurisdiction or to the maintainability of the petition as such. If the said ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... writ petition raises disputed questions of fact which cannot be decided in the writ jurisdiction of this Court under Article 226 of the Constitution of India. It may be seen in regard to this objection that in the view which we take in this matter, we would not be deciding any disputed questions of fact as such but would be directing the respondent No. 2 to decide the same in the light of the view which we have taken in this judgment. It may, however, be seen that even in the writ jurisdiction of this Court under Article 226 of the Constitution, the High Court is competent to decide the question of fact unless they are so complex that they cannot appropriately be decided in a writ petition under Article 226. See Gunwant Kaur v. Bhatinda Municipality (AIR 1970 SC 862, para 14). It is only when there are complicated questions of fact which cannot be appropriately gone into in a petition under Article 226 that the petition may be rejected and the parties relegated to their other remedies. We do not, therefore, think that we can give effect to the above prelimiflary objection raised on behalf of the respondents that since the instant writ petition involves questions of fact, the parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they relate to different periods. It may further be seen that the petitioners have given the detailed description and the particulars of the show cause notices and the orders in Exhibit 'M'. It may also be seen that all these show cause notices are in respect of the same subject matter, viz. whether the petitioner No. 1 is entitled to the concessional rate of excise duty as provided in the notification dated 16-3-1976. In these circumstances, the above objection is merely hyper technical. Moreover, the respondents themselves have placed on record the orders passed by the respondent No. 2 which are referred to at Serial Nos. 1 to 6 in Exhibit 'M'. We have thus on record the said orders. The said objection is, therefore, academic. We, therefore, do not think that the non-filing of all the orders and all the show cause notices by the petitioners would be fatal to them in this writ petition. The above objection raised on behalf of the respondents, therefore, cannot be given effect to. 11-10-1988. 21. Turning now to the merits of the controversy, it is urged on behalf of the petitioners that the question whether the white printing paper was supplied to the persons referred to in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relation been made by the respondent No. 2 about the various documents shown to the inspecting party, a conclusion was irresistible that the white printing paper was sold by the petitioner No. 1 for the educational purposes as mentioned in Clause (ii) of column 4 of Item No. 1 of the notification dated 16-3-1976. Before we refer to the argument about co-relation, we may make it clear that it is not necessary to decide in the instant writ petition what the effect of the Paper Control Order is, in the sense whether it is obligatory upon the manufacturer to sell the white printing paper only to such persons as directed by the Central Government under Clause 4 of the said order or whether it is permissible for him to sell the said paper to any other person also, the reason being that, according to the petitioners, they have sold the white printing paper only as per allotment orders issued under the authority of the Central Government for the educational purposes covered by Clause (ii) in column 4 of Item 1 of the exemption notification dated 16-3-1976. The controversy in the instant writ petition is thus narrowed down. It is, therefore, necessary to find out whether the petitioners hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de against April/June 1981 quarter's allocation. He has then brought to our notice the allotment letter dated 18-4-1981 Exhibit 'F' which is addressed to the petitioner No. 1. It is stated in the said letter that the office of the Paper Controller by its letter dated 23-3-1981 had allocated the concessional rate paper for the quarter April-June 1981 for the printing of text books/exercise books and the list of allottees was enclosed with the said letter in which the allotted quota against the name of each of them was shown. The aforesaid allotment order had directed the petitioner No. 1 to issue the white printing paper, as per the list enclosed, to the allottees at an early date. The learned counsel for the petitioners brought to our notice the list of allottees in which at Serial No. 18 the name of M/s. S. Chand Co., New Delhi, appears to whom as per the said allotment letter, the quantity of white printing paper to be supplied was 206.500 M.T. 26. It is by this process of co-relating the gate pass to the invoice, the invoice to the delivery memo, and the delivery memo to the allotment order that the petitioners have sought to establish that the white printing paper which was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as required by the aforesaid Clause (ii) in the notification dated 16-3-1976. 29. In view of the above submissions made on behalf of the petitioners, we had asked the learned counsel for the respondents to bring to our notice any of the allotment orders referred to in Annexures R-1 to R-6 to support his case that in the said allotment orders the educational purpose was not mentioned. The learned counsel for the respondents has not been able to substantiate his case in this regard on a specious plea that the said allotment orders are not in his possession. It may, however, be seen that the allotment orders were verified by the inspecting party and even their numbers are noted and given in the charts filed by the respondents. It is, therefore, not possible for us to believe that the inspecting party would not go through the contents of the documents and would not know that the allotment orders were for educational purpose which was mentioned therein. It is clear from the allotment orders which are filed with the petition and the allotment orders which are shown to us that the educational purpose of the allotment is mentioned therein. In fact a list of dealers to whom the white prin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the return against which it is mentioned that the allotment letters referred to in the said entries were not received by the Department. The learned counsel for the petitioners has, however, urged before us that during the time the inspecting party visited the factory there was a strike in the factory and it was not, therefore, possible for the petitioner No. 1 to produce all the relevant documents before the inspecting party for verification for which some time was also sought by the petitioner No. 1 but the respondent No. 2 did not extend the time till the end of September 1983 and sent the inspecting party on 5-9-1983 itself on which date it was not possible for the petitioner No. 1 to produce all the relevant allotment orders and all other necessary documents to show its co-relation with the paper which was removed. The learned counsel for the petitioners has, however, told us that the petitioner No. 1 has now got all the allotment orders including those which could not be shown to the inspecting party and the petitioner No. 1 can satisfy the Assistant Collector in regard to the same. In fact, he made a statement that he can satisfy us in regard to the aforesaid allotment ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order dated 17-11-1983 are also brought to our notice by the learned counsel for the petitioners which show that the petitioner No. 1 was following such a practice. If such a practice was in vogue it was all the more necessary for the respondent No. 2, to determine whether the paper was really cleared to self or whether it was sent to the dealer as per the allotment letter. The impugned order of the Assistant Collector does not show that he has taken note of such a practice and he has considered it. It was, therefore, necessary in the instant cases that the respondent No. 2 should have actually satisfied himself whether the paper which was cleared to self was actually despatched to the dealers as per the allotment orders for the educational purpose. The impugned orders of the Assistant Collector are thus infirm and are liable to be set aside and it is necessary for him to consider these cases afresh after applying his mind to all the material on record. It would be also open to the petitioners to place before him all the relevant documents, including the invoices, delivery orders etc. upon which they rely, including the allotment letters which were not available when the inspect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cleared to self and not to the dealers as per the allotment letters for the educational purposes. 36. The learned counsel for the respondents has in support of his submissions relied upon Section 9(l)(bb), Section 34A and Section 36A of the Act, and Rules 8,52A, 173G, 173Q, 197 and 198(2) of the Rules framed under the Act. He has also relied upon the following decisions: (1) Ramkrishna v. Vithal Laxinan -1980 Mh. L.J. 477 (2) Union of India v. Haim Aghajan - AIR 1968 Bom. 366 (3) S.I. Coir Mills v. Addl. Collector, Customs - AIR 1976 SC 1527 (4) Sharif-ud-din v. Abdul Gani - AIR 1980 SC 303 (5) Delhi Municipality v. Tek Chand - AIR 1980 SC 360 (6) Kedarnath Jute Mfg. Co. v. Commrl. Tax Officer - (1965) 16 STC 607 (7) Charanjit Lal Des Raj v. Sales Tax Tribunal (P H) - (1977) 40 STC 361. He has further relied upon certain quotations from Halsbury's Laws of England, Vol. 20, of which he has given us a note. The whole attempt on behalf of the respondents in referring us to the above decisions is to show that even though a declaration may be untrue, the person making such a declaration is bound by it. 37. Section 9 of the Act is in respect of offences and penalties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate-pass is conclusive. Rule 52A deals with the removal of the goods under a gate-pass when the officer of the Excise Department is present in the factory. The Explanation to sub-rule (1) of Rule 52A emphasises that the gate-pass should be in the proper form and the proper form is defined in the Rules to mean the proper form as prescribed in Appendix to the Rules. Sub-rule (5) of Rule 52A imposes a penalty upon any person who carries or removes the excisable goods from the factory without a valid gate-pass. The said rule in terms has no bearing on the question raised on behalf of the respondents because it is not their case that the goods are removed without a valid gate-pass. 40. Turning now to Rule 173G(2) it enables the manufacturer to remove the goods under the gate-passes without the counter-signature of the appropriate officer at the time of removal of the goods because the manufacturers who adopt the self-removal procedure get the gate-passes countersigned by the proper officer before hand. It is the manufacturer who fills in the requisite information in the gate-passes about the removal of the goods and has, therefore, to file a return under sub-rule (2A) which is to be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ily relied upon on behalf of the respondents to press the submission that any untrue or incorrect declaration given therein is also binding upon the assessee. It is for this purpose that the learned counsel for the respondents has relied upon the several cases already referred to above. However, all the cases relied upon on behalf of the respondent No. 1 are not relevant on this question and we need to consider, therefore, the decisions which are relevant to the above question. Careful scrutiny of these cases would show that in these cases either the provisions of the Act or the Rules required a declaration to be given which is interpreted in the said cases. 43. We may first refer to the decision of the Supreme Court in the case of M/s. South India Coir Mills, Poockakka v. Additional Collector of Customs and Central Excise and another. The question considered therein was about the construction of Section 12(1) of the Foreign Exchange Regulation Act, 1947 (for short 'FERA') after it was amended by the Act No. 40 of 1969. It was held in the said case that under the amended Section 12(1), the exporter was required to furnish a declaration in the prescribed form which must be true in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 113 of the Customs Act. 45. It would, however, be proper to consider also at this stage the decision of the Supreme Court in the case of Union of India and others v. Rai Bahadur Shreeram Durga Prasad Private Ltd. and others (AIR 1970 SC 1597), which is upon the unamended provision of Section 12(1) of the FERA and which is distinguished on that ground in the decision of the Supreme Court cited supra. Prior to amendment also Section 12(1) of the FERA required a declaration to be made before the prescribed authority that the amount representing the full export value of the goods has been or will within the prescribed period be paid in the prescribed manner. It is pertinent to see that Section 23 of the FERA made the contravention of Section 12(2) punishable and not of Section 12(1) of the FERA. Howeve, resort was taken to Section 23A of the FERA for showing that the contravention of Section 12(1) was punishable under the Customs Act as referred to by us above while dealing with the later judgment of the Supreme Court in S.I. Coir Mill's case, cited supra. The majority judgment delivered by Hegde J. in para 34 held in the case of M/s. Shriram Durga Prasad; cited supra, that bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acted. It is for this reason that it appears that Section 12(1) of the FERA was amended by the Act No. 40 of 1969 providing for a true declaration in respect of matters contained therein because of which it is held in the case of S.I. Coir Mill's case, cited supra, that there is contravention of the amended Section 12(1) of the FERA. When in the absence of the provision for a true declaration in Section 12(1) of the FERA it is held by the Supreme Court in Shriram Durga Prasad's case cited supra, that its contravention does not attract the penal provision although a declaration may be untrue, we fail to see how in the absence of a specific provision either in the Act or the Rules for even a declaration with affirmation, the judgment of the Supreme Court in the case of the S.I. Coir Mill's case would support the respondents. 48. As regards the decision of the Supreme Court in the case of Kedarnath Jute Mfg. Co. v. Commercial Tax Officer [(1965) 16 STC 607], Section 5(2)(a)(ii) of the Bengal Finance (Sales Tax) Act, 1941, construed therein provided for a statutory declaration by the purchaser if the dealer wanted to get the exemption from the sales tax. That provision was construed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y giving wrong information in the gate-pass. In this regard, it may be seen that it is well settled that the provisions relating to prosecution, confiscation and penalty should be strictly construed and, therefore, in the absence of a specific provision in the Act or the statute, it is difficult to hold that because some incorrect information is given in the gate-passes in question, it will attract the penal provisions in the statute. As regards the applicability of the cannon of struck construction, it is held in the decision of the Supreme Court in M/s. Shriram Durga Prasad's case that although the rigour and sanctity of the regulations should be maintained for protecting the economic and financial interest of the country, at the same time, it should not be forgotten that Section 12(1) under consideration therein is a penal provision and, therefore, as per the well settled cannon of construction such a provision should be strictly constructed. (See para 37 of the judgmet in M/s. Shriram Durga Prasad's case, cited supra). The contention raised in this regard on behalf of the respondents thus deserves to be rejected. 51. However, on merits also, the question which needs examinati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are bound by the equitable principles of estoppel and approbate and reprobate. It may again be seen that if the facts in the instant case are seen and read in the light of the commercial practice adopted by the petitioners, the remark in the gate-pass that the paper in question is removed to self cannot be construed as such an admission which will preclude the petitioners from showing that the paper in question is sold to the dealers to whom it was directed to be sold in the allotment letters. The learned counsel for the petitioners has also brought to our notice the decision of the Supreme Court in the case of Dunlop India Ltd. v. Union of India (AIR 1977 SC 597), in which it is held by the Supreme Court that in tax matters the principles of estoppel etc. are not applicable. The said judgment of the Supreme Court no doubt supports the petitioners. For all these reasons we cannot accept the contention raised on behalf of the respondents relating to estoppel etc. 54. In the result, we partly allow the instant writ petition. The impugned orders passed by the respondent No. 2 in respect of show cause notices referred to at Serial Nos. 1 to 6 of Exhibit 'M' of the petition are quashe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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