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TMI Blog1997 (3) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... imited is said to be engaged in the manufacture of M.S. ingots from iron, iron scrap and sponge iron etc. On the other hand, M/s. Alfa Springs Limited is said to be engaged in the business of manufacturing M.S. bars (saria) for which it purchases M.S. ingots, inter alia, from M/s. Alfa Castings Private Limited. 3.On 21st August, 1996, a team of officers from the Directorate of Anti-Evasion (Central Excise), New Delhi, and the Zonal Office of the Central Excise at Kanpur conducted a search at the two factories of the two companies situated at Orai in District Jalaun. Several incriminating documents were alleged to have been recovered indicating evasion of excise duty and investigation has been started by a team of Central Excise investigators at New Delhi. 4.Section 14 of the Central Excises and Salt Act, 1944 (hereinafter referred to as `the Act') confers power to summon persons to give evidence and produce documents. The same reads as under : "14. Power to summon persons to give evidence and produce documents in inquiries under this Act :- (1) Any Central Excise Officer duly empowered by the Central Government in this behalf shall have power to summon any person whose atte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lication for supplying photostat copies of certain documents. He claims that the employees could not be traced despite best efforts. A fifth summons was issued on 10th October, 1996, requiring his presence on 17th October, 1996. Again on 16th October, 1996, an application was moved seeking adjournment for one month. Then, a sixth summons was issued on 31st October, 1996, requiring the petitioner's presence on 6th November, 1996. It is claimed that the petitioner Rakesh Bagla appeared before the senior intelligence officers at New Delhi and he was interrogated on 6th and 7th November, 1996. According to the petitioner, the investigation was completed. It is claimed that the petitioner sent a telegram dated 8th November, 1996, reiterating what he had stated during the interrogation on 6th and 7th November, 1996. It is claimed that such a telegram was given because the respondents had not given any copy of the statement to the petitioner. The respondents are said to have sent another summons dated 11th November, 1996, requiring his presence on 20th November, 1996. An adjournment was sought on medical grounds. Another summons was issued on 22nd November, 1996, requiring his presence on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wait outside the office. It is claimed that it is not permissible under the provisions of the Act to torture the witnesses and to make the petitioner and the witnesses run very frequently to Delhi and there is no reason why the investigation should not be conducted at the zonal office. It is claimed that there is no provision in the Act prescribing the manner and the place for conducting the investigation, but it is necessarily implicit that the same should be done at the place where the factory is situate or in its vicinity. 8.It is claimed that use of torture and third degree methods during investigation is illegal and has been deprecated and criticised by the Hon'ble Supreme Court as well as by the High Courts. It is claimed that, usually, the trials are held at the place of the incident so that the witnesses are not harassed and, in any case, it is the Commissioner of Central Excise, Kanpur Nagar, before whom the investigating team will submit its report for determining the quantum of duty, if any, to be levied. It is claimed that respondent Nos. 2, 3 and 4 are acting arbitrarily and unjustifiably in conducting the investigation at New Delhi. It is claimed that since the resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apprehension of beating and torture on phone at late night of 21st November, 1996. Thereupon, the wife of the petitioner No. 1 talked to Sri Chandra Bhan, respondent No. 2, complaining of misbehaviour with her husband. She is also alleged to have sent a telegram to that effect on 22nd November, 1996. Before their release, the petitioner Nos. 1 and 2 were given summons for appearing the next day, that is 22nd November, 1996. Later, when the respondent Nos. 3 and 4 noticed that the petitioners were unable to walk because of the injuries sustained by them, they took back their summonses and asked them not to appear on 22nd November, 1996. After midnight of 21/22nd November, 1996, when the petitioner Nos. 1 and 2 were released, they proceeded to the nearby telephone P.C.O. in R.K. Puram where they met Sri Ved Ram Sagar and Rafaqat Ali. From there, the petitioner No. 1 alleged to have talked to his wife at Jhansi on phone who told him that she had a talk with respondent No. 2 shortly before. 10.The petitioner Nos. 1 and 2 tried to get themselves medically examined and treated at some hospital in Delhi, but having failed to get admission in any of the hospitals at Delhi, they had to le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough Sri A.K. Gaur, Standing Counsel, and Sri S.C. Agarwal. Initially, a counter affidavit sworn by one Sri K.R. Bhargava, Deputy Director (Intelligence), Directorate General of Anti-Evasion, Central Excise, R.K. Puram, New Delhi, was filed on behalf of the respondents. It was stated that on the basis of the searches, evasion of excise duty to the tune of about rupees ten crores was suspected and investigation in that regard has been initiated and is in progress. It is claimed that the allegations of threats and terrorising physical assault made against the officers of the Central Excise conducting the investigation and supervising the same have been made to thwart investigation and to terrorise the fearless and bright officers of the Directorate to pressurise them not to effectively investigate into the matter. It was alleged that this is being done with the active connivance of the senior officers of the State of Uttar Pradesh. 14.The father of Rakesh Bagla is said to be a senior retired officer of the Indian Administrative Service, who is currently Chairman of the Scheduled Castes and Scheduled Tribes Commission of Uttar Pradesh. The brother-in-law of Rakesh Bagla is said to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioners have all sorts of assistance of lawyers and officers at Delhi and another brother-in-law of Rakesh Bagla is also a Deputy Commissioner of Income Tax posted at Delhi. It is claimed that the petitioner (Rakesh Bagla) has been avoiding inquiries and has been evasive in his replies. He has not cooperated with the investigating agencies on one pretext or the other and that he appeared only once on 6th and 7th November, 1996, and that too, after a prosecution was launched against him under Section 14 of the Act. The allegations of misbehaviour with Nasir Khan and Shaheed Ali were denied. 16.At the hearing, it was pointed out to the learned counsel for the respondents that the counter affidavit sworn by K.R. Bhargava was not in order when allegations of misbehaviour were made against the respondents. Thereafter, the affidavits personally sworn by Chandra Bhan, respondent No. 2, J.L. Kapoor, respondent No. 3, and R.K. Goel, respondent No. 4, were filed in both the petitions, each of them denying the allegations of misbehaviour, torture, bias etc. etc. Rejoinder affidavits have also been filed in writ petition No. 861 of 1996 repeating the allegations, mentioned above. 17. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21.After arguing the matter fully and projecting their respective grievances, the learned counsel for the parties stated that since in the matter of allegations regarding physical torture, criminal complaints are pending before the concerned Magistrates at Jhansi and Kanpur and petitions under Section 482 of the Code of Criminal Procedure are also pending in this Court for quashing the proceedings launched by Nasir Khan and Shaheed Ali, this Court should refrain from making any observation about the veracity or otherwise of the allegations and we agreed to the suggestion. 22.Investigation in matters relating to tax avoidance is governed by statutory provisions. In this case, the investigation is being undertaking for suspect evasion of excise duty. The authority to investigate is conferred by the Central Excises and Salt Act and Section 14 confers the power to summon witnesses for oral evidence or production of documents; so much so that sub-section (3) of Section 14 confers on the enquiry proceedings the status of "judicial proceedings" within the meaning of Sections 193 and 228 of the Indian Penal Code. 23.It is not in dispute that the respondent Nos. 2, 3 and 4 have statuto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Tax Service Association v. Taxation Bar Association - (1995) 5 S.C.C. 716, the Advocates practising before the Sales Tax authorities at Agra started an agitation against a Deputy Commissioner (Appeals) alleging him to be corrupt and boycotted him. The officer continued to dispose of the appeals on merits in the absence of the lawyers. The advocates came to this Court in a writ petition and this Court issued an interim writ of prohibition restraining the said officer from discharging his appellate functions. The Hon'ble Supreme Court did not approve of this and quashed the High Court's order observing that this could be done only when the inferior Court or Tribunal :- Proceeds to act without or in excess of jurisdiction,(a) Proceeds to act in violation of the rules of natural(b) justice, Proceeds to act under law which is itself(c) ultra vires or unconstitutional, or Proceeds to act in contravention of fundamental rights.(d) 28.The Hon'ble Supreme Court observed that the High Court cannot at the instance of the Advocates and the Bar, issue a writ or order of prohibition, prohibiting a quasi judicial authority from discharging its statutory functions or transferring thos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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