Case Law Details
Shivkrupa Processors Private Ltd Vs Union of India (Gujarat High Court)
It is settled law that inordinate delay (17 Years in this case) in adjudication results into denial of principles of natural justice and such violation cannot be overlooked by any authority.
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.
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.
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.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
1. The petitioners have, by way of this petition, approached this Court under Articles 226 and 227of the Constitution of India, challenging the Order in Original dated 8.3.2017 passed by the respondent no.2 determining the liability and penalty on the petitioners pursuant to the show cause notice, which had been issued on 22.8.2002 for the reasons stated in the Order in Original.
2. Facts in brief leading to filing of this petition, as could be culled out from the memo of petition, deserve to be set out as under:
The petitioner no.1 Company is a Private Limited Company which was engaged in the processing of man-made fabrics falling under CETH 54.06 of the First Schedule Central Excise Tariff Act, 1985 during 2001-02 through its EOU located at the address. The petitioner no.2 is a Director as well as shareholder of the petitioner no.1 Company. The petitioner Company obtained advance DTA sales permission dated 27.6.2001 and served a copy of the same on the jurisdiction range superintendent vide letter dated 28.6.2001. Suddenly in October, 2016, petitioner no.1 company received a personal hearing notice dated 5.10.2016 fixing personal hearing on 18.10.2016 for a show cause notice dated 22.8.2002. The petitioner vide letter dated 14.10.2016 informed the respondent no.2 that it has no copy of the show cause notice dated 22.8.2002 and sought a copy of the same along with request for adjournment of the personal hearing fixed on 18.10.2016. Accordingly, the Assistant Commissioner (Adjudication) Surat-I, Commissionerate furnished copy of show cause notice dated 22.8.2002 to the petitioner vide letter dated 21.10.2016 and thereafter several notice of hearing was sent by the authority and same was adjourned as per request of petitioner no.1. Thereafter the petitioner filed its detailed reply on 13.11.2016 against show cause notice dated 22.8.2002 served in October, 2016. It is case of petitioners that without furnishing any proof of service of show cause notice in the year 2002, respondent heard the petitioners on 16.11.2016 and 2.3.2017 and passed the impugned Order in Original dated 8.3.2017 upholding the demand of Rs.3,37,38,198/- towards central excise duty and imposed penalty equal to duty confirmed on the petitioner no.1 company and a personal penalty of Rs.1,00,000/- was imposed on the petitioner no.2. Thus, by way of this petition, the Order in Original dated 8.3.2017 is challenged invoking Articles 226 and 227 of the Constitution of India.
3. Learned counsel for the petitioners invited this Court’s attention to the show cause notice as well as date of show cause notice to vehemently contend that the said show cause notice culminated into impugned order, which cannot be passed on 8.3.2017, as the time lag between the two, itself is sufficient for rendering the Order in Original as invalid, inappropriate and without jurisdiction of settled proposition of law.
4. Learned counsel appearing for the petitioners invited Court’s attention to page-72, which was reply to attempt to revive and resurrect the matter on the original show cause notice and indicated that the said attempt on the part of authority would not be in consonance with provisions of law and the decision then prevailing on the situation in case of Lanvin Synthetics Private Limited Vs. Union of India, reported in 2015 (322) ELT 429(Bom) was relied upon. This aspect has unfortunately not been adverted to the authority while rendering Order in Original, which is impugned in this petition and therefore, it can well be said that the order suffers from basic infirmity, which would go the root of the matter, therefore, order impugned is required to be quashed and set aside.
5. Learned counsel for the petitioners have relied on following authorities :
I) 2017 (352) ELT 455 (Guj.) in case of Siddhi Vinayak Syntex Pvt Ltd Vs. Union of India;
II) decision rendered in SCA No. 20125 of 2016 dated 6.2017 by the Division Bench;
III) decision rendered in SCA No. 8940 of 2017 and allied matters dated 06.11.2017 by the Division Bench;
IV) decision rendered in SCA No. 9298 of 2017 to SCA 9301 of 2017 dated 04.12.2017 by the Division Bench;
and submitted that the aspect of lack of authority and power in resurrecting stale old show cause notice after an inordinate delay of 15 years is no more res-integra. It was further submitted by learned advocate for the petitioners that as per his knowledge decision rendered in case of Siddhi Vinayak Syntex Pvt. Ltd (supra) has been upheld.
6. Learned counsel for the petitioners submitted that this Court has followed the said ratio in case of Alidhara Textile Engineers Ltd Union of India and in that view of the matter, the order impugned deserve to be quashed and set aside.
7. Learned counsel for the respondent no. 2 invited this Court’s attention to two circulars dated 28.5.2003 & 26.4.2016 to indicate that the respondent authorities were justified in late conducting the proceedings pursuant to show cause notice of the year 2002 as there is a procedure for keeping in ‘Call Book’ when the show cause notice and adjudication are required to be kept in abeyance and same similar issues are pending adjudication before the High Court and Supreme Court. The said circulars have been pressed into service to indicate that there was sufficient justification on the part of authority in conducting the matter pursuant to show cause notice of the year 2002.
8. Learned counsel appearing for respondent further submitted that petitioners have unfortunately not indicated in any manner as to whether they were really prejudiced on account of lost of evidence as it was a case in case of Siddhi Vinayak Syntex Pvt. Ltd (supra), where the Court did record that evidences are also not available. In the instance case, unfortunately there is no clear averments to that
9. Learned counsel appearing for the respondent submitted that there is no obligation on the part of the respondent to intimate the petitioner about the fact that the case has been transferred to the call book. Even the language of the Circular No. 7 19/35/2003 does not provide any instance, where it becomes obligatory on the part of the authority to inform the petitioner and on the contrary, contributory negligence ought to be attributed to the petitioner for not being vigilant enough to check and inquire the statute of the proceedings and therefore, the Court may not quashed the order. In case if the Court is of the view that the authority in question has not adverted to the aspect of belated conducting of the proceedings pursuant to old show cause notice, then, let the matter be remanded to the authority for calling upon it to advert to said aspect.
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.
13. In that view of the matter, the notice dated 22.8.2002 as well as Order in Original dated 8.3.20 17 passed by respondent no. 2 deserve to be quashed and set aside and they are quashed and set aside. The petition is allowed to aforesaid extent. There shall be no order as to costs.