Case Law Details
Apollo Tyres Ltd. Vs Union of India (Gujarat High Court)
It is undisputed fact that the issue involved in the impugned Show Cause Notices had earlier raised with respect to the petitioner’s operation in Kerala. The said dispute stood resolved in favour of the petitioner by order dated 08.02.2005 passed by the CESTAT, Bangalore. It also emerges that it is undisputed fact that it only after filing of the present petition, the concerned respondent has resurrected the dormant impugned Show Cause Notice from call book and issued communication dated 03.12.2018 to the petitioner for personal hearing in respect of the impugned show cause notice.
It is an undisputed fact that the issue of impugned show cause notices was the subject matter with respect to the petitioner operation in Kerala. The issue has been finally resolved in favour of the petitioner by an order dated 08.02.2005 passed by the CESTAT, Bangalore, in appeal preferred by the Revenue. The respondents after keeping the impugned show cause notices in the call book, have not chosen to follow up it for unduly long period. It is very evident from the affidavit in reply filed by the respondents that it was only after the filing of this petition, the impugned show cause notices have been taken out from the call book and notice for personal hearing was issued to the petitioner. The act on the part of the respondents of keeping the impugned show cause notices in call book for unduly long period, without disclosing any reason for delay is arbitrary in exercise of powers and is also in violation of provisions of Section 11A of the Customs Act. It would in our opinion vitiate the entire proceedings.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
1. Rule. Learned advocate Mr. P.Y. Divyeshvar waives service of Rule on behalf on behalf of the respondents.
2. With the consent of the learned advocates for the parties, the mater is taken up for final disposal.
3. The petitioner has preferred present petition under Article 226 of the Constitution of India for the following reliefs:
“a) THAT this Hon’ble Court be pleased to issue a Writ of Certiorari or a Writ in the nature of Certiorari, or any other appropriate Writ, Order or direction, calling for the papers and proceedings leading to the records relating to Annexure B1 to B25 show cause notices and after looking into the same and the legality thereof, this Hon’ble Court be pleased to quash and set aside the same.
b) THAT this Hon’ble High Court may be pleased to issue a writ of Mandamus or Writ in the nature of Mandamus directing the Respondent Nos.3 to 7 and sub-ordinate officers to desist from taking any actions pursuant to Annexures B1 to B25 show cause notices pending final hearing and disposal of the Writ petition.”
4. The background facts leading to filing of this petition as could be gathered from the memo of the petition needs to be set out as under:
4.1 The petitioner, a Public Limited Company incorporated under the Companies Act, 1956, with factory at Limda in Vadodara District, is engaged in the manufacture of pneumatic tyres. The petitioner also manufactures at its factories in Perambra and Kalamasserry in Kerala as well as in Orgdam in Chennai, Tamil Nadu. While selling these tyres, during the period 28.08.2002 till 26.05.2017 covering the period from August, 1997 to October, 2016 covered by the 25 Show Cause Notices, the petitioner was entitled to arrive at an assesable value after deducting the Government levies from the Net Dealer Price. In the present case, the 25 Show Cause Notices concern only the aspect of deduction of Government levies which include turnover tax, octroi / entry tax leviable in the respective States in the country. During the aforesaid period, such Government levies were being averaged based on a costing done by the petitioner’s Chartered Accountants and such averaged Government levies were adopted for the purpose of deduction from the Net Dealer Price. The 24 Show Cause Notices in question impugned were issued inter alia raising the ground that such averaged / equalized deduction of Government levies is not admissible and consequently demanding differential excise duty.
4.2 A similar issue arose with respect to the petitioner’s operations in Kerala, which stood finally resolved in favour of the petitioner by order dated 08.02.2005 passed by the Customs, Excise & Service Tax Appellate Tribunal (hereinafter referred to as “CESTAT”), Bangalore.
4.3 According to the petitioner, 25 Show Cause Notices are issued from 28.08.2002 till 26.05.2017 covering the period from August, 1997 to October, 2016 all of which are now in clear breach of statutory mandate of Section 11A (11) of the Customs Act. In the case of the petitioner, the issue itself has been resolved by CESTAT, Bangalore, against which no appeal has been preferred by the Department. Thus, by way of present petition, impugned 25 Show Cause Notices are challenged in this petition.
5. We have heard Mr. Joseph Kodhiantera, learned senior counsel assisted by Mr. Hardik P. Modh, learned advocate for the petitioner and Mr. P.Y. Divyeshvar, learned advocate for the respondents.
6. Learned advocate for the petitioner submitted that the issue involved in the present petition is no longer res integra and the show cause notice issued by the respondent No.4 herein are in clear breach of the statutory mandate of the Section 11A(11) of the Customs Act and can no longer be sustained. In support of his submissions he placed reliance on the decision of this Court in the case of M/s. Siddhi Vinayak Syntex Pvt. Ltd. Vs. Union of India and ors. reported in 2017 (352) ELT 455. It his further submission that the issue of the impugned show cause notices has arisen with respect to the petitioner operation in Kerala. He submitted that the issue is finally resolved in favour of the petitioner by an order dated 08.02.2005 passed by the CESTAT, Bangalore and has attained finality. He, therefore, urged that the petition may be allowed and the impugned show cause notices may be quashed and set aside.
7. Mr. P.Y. Divyeshvar, learned advocate for the respondents submitted that present petition is not maintainable as the impugned show cause notices have been taken out of the call book and personal hearing has already fixed vide communication dated 03.12.2018. He also submitted that the petitioner can avail of the alternative remedy for redressal of his grievance. He relied upon para 2.1 of the affidavit-in-reply to buttress his submissions, which reads as under:
“2.1 The petition is not maintainable and required to be dismissed on the ground of non fulfillment of “Sine Qua Non” that no demand no refusal for issuance of writ of mandamus and other writs. The petitioner could have availed of the remedy available to them under the law for the grievance of the same. It is most respectfully submitted that the captioned petition may be dismissed due to the fact that the main grievance raised by the petitioner in the captioned petition is against the transfer of the impugned 25 show cause notices to the call book and resultant delay in adjudication of the case. In this regard, it is submitted that the grievance of the petitioner has been redressed. The impugned 25 show cause notices have been take out of the call book and personal hearing has been fixed for 14.12.2018 at 11.30 A.M. before the Commissioner. A copy of the letter F.No. V(15)14/ D.Wag/Dem/ Apollo/16-17 dated 03.12.2018 issued by Shri S.K. Roy, Superintendent (Adjudication Section – Commr. Power) CGST and Central Excise, Vadodara-I is annexed as R-1 for the ready reference.”
8. We have heard learned advocates of either side and we have also perused the documents on record. It is undisputed fact that the issue involved in the impugned Show Cause Notices had earlier raised with respect to the petitioner’s operation in Kerala. The said dispute stood resolved in favour of the petitioner by order dated 08.02.2015 passed by the CESTAT, Bangalore. It also emerges that it is undisputed fact that it only after filing of the present petition, the concerned respondent has resurrected the dormant impugned Show Cause Notice from call book and issued communication dated 03.12.2018 to the petitioner for personal hearing in respect of the impugned show cause notice.
9. It is an undisputed fact that the issue of impugned show cause notices was the subject matter with respect to the petitioner operation in Kerala. The issue has been finally resolved in favour of the petitioner by an order dated 0.8.02.2005 passed by the CESTAT, Bangalore, in appeal preferred by the Revenue. The respondents after keeping the impugned show cause notices in the call book, have not chosen to follow up it for unduly long period. It is very evident from the affidavit in reply filed by the respondents that it was only after the filing of this petition, the impugned show cause notices have been taken out from the call book and notice for personal hearing was issued to the petitioner. The act on the part of the respondents of keeping the impugned show cause notices in call book for unduly long period, without disclosing any reason for delay is arbitrary in exercise of powers and is also in violation of provisions of Section 11A of the Customs Act. It would in our opinion vitiate the entire proceedings.
10. Similar issue raised for consideration before this Court in the cases of Parimal Textiles Vs. Union of India reported in 2018(8) G.S.T.L. 361 (Guj.), M/s. Siddhi Vinayak Syntex Pvt. Ltd. (supra) and Shivkurpa Processors Pvt. Ltd. Vs. Union of India reported in 2018 (362) E.L.T. 773 (Guj.). In the case of Shivkrupa (Supra), this Court has held as under:
“10. We have heard learned counsels for the parties and perused the documents on record. The undisputed aspect that emerged from the proceedings would unequivocally indicate that notice dated 22.8.2002 did not result into any order for quite sometime and as per say of respondent, it was consigned to the call book as per the circulars prevalent. The authority appeared to have proceeded with broad aspect of the matter that non- receipt of the said notice cannot be said to be established by the noticee and based thereupon, recording findings that concerned authorized person of the petitioner Company, who also is the signatory to this petition, did receive the notice and therefore, it cannot be in any manner correct on the part of the petitioners to say that there was no knowledge of existence of show cause notice dated 22.8.2002. We are of the view that this contention needs to be examined in light of the principles underlying the law, which is by now settled that inordinate delay in adjudication results into denial of principles of natural justice and that proposition cannot be said to be nonest in the present proceedings. The receipt of notice dated 22.8.2002 and findings recorded thereon would pale into insignificance, if the same is to be viewed in light of observations of the Court in case of Siddhi Vinayak Syntex Pvt. Ltd (supra), Alidhara Textile Engineers Ltd. (supra) and other decisions cited as bar.
11. The ground of alternative remedy is also does not impress this Court in any manner, as there is clear violation of principles of natural justice, which cannot be overlooked by any authority, therefore, this ground is also not available to respondent.
12. Learned counsel for the respondent attempted to develop the ground for resisting this petition based upon plea of prejudice. We are of the view that said ground would also not be available to the respondent, as notice dtd 22.8.2002 had not been acted for long long period of 17 years, that in itself is sufficient to accept and justify the plea of prejudice without any further probing into the matter. The resurrection of notice dated 22.8.2002 assuming for the sake of convenience without admitting that was admittedly after subsequent notice, then also, in view of established principles of law and provisions of statute, the said resurrection would be not permissible in light of decisions cited hereinabove.”
11. In our view, the issue involved in this petition is therefore, squarely covered by the decisions of this Court and the impugned show cause notices cannot be permitted to be processed further.
12. For the foregoing reasons, the impugned notices at Annexure B/1 to B/25 are hereby quashed and set aside. Rule is made absolute. The parties are left to bear their own costs.
