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Dawn Mills Co. Limited Vs. Union of India - Court Judgment

LegalCrystal Citation
SubjectExcise
CourtMumbai High Court
Decided On
Case NumberMisc. Petition No. 2470 of 1979
Judge
Reported in1990(47)ELT256(Bom)
ActsConstitution of India - Article 226; Essential Commodities Act
AppellantDawn Mills Co. Limited
RespondentUnion of India
Excerpt:
.....earlier stage as well as the subsequent material produced both by the petitioners and the department. shri dhanuka on the other hand submits that the powers are delegated to him by the textile commissioner and he was perfectly justified in passing the order......by the senior enforcement officer of the department of industrial development, office of the textile commissioner, and the order dated december 12, 1979, annexed as exh. i to the petition, passed by the deputy secretary to the government of india in its appellate jurisdiction.2. only few facts are required to be stated to appreciate the grievance of the petitioners. the government of india published a notification dated june 29, 1979 in exercise of powers conferred by clause 20 and sub-clause (5) of clause 21 of the cotton textiles (central) order, 1948. the notification provided that every producer of yarn shall pack yarn, for civil consumption, in hank form, in each quarter commencing from july/september 1979 quarter and in every subsequent quarter is proportion not less than 50%.....
Judgment:

1. By this petition filed under Article 226 of the Constitution of India, the petitioners are challenging the legality of the order dated October 5, 1979, annexed as Exh. F to the petition, and passed by the Senior Enforcement Officer of the Department of Industrial Development, Office of the Textile Commissioner, and the Order dated December 12, 1979, annexed as Exh. I to the Petition, passed by the Deputy Secretary to the Government of India in its Appellate Jurisdiction.

2. Only few facts are required to be stated to appreciate the grievance of the Petitioners. The Government of India published a Notification dated June 29, 1979 in exercise of powers conferred by Clause 20 and sub-clause (5) of Clause 21 of the Cotton Textiles (Central) Order, 1948. The Notification provided that every producer of yarn shall pack yarn, for civil consumption, in hank form, in each quarter commencing from July/September 1979 quarter and in every subsequent quarter is proportion not less than 50% of the total yarn packed by him during each quarter for civil consumption. The Government of India also issued another Notification dated July 12, 1979 in almost identical terms in respect of Art Silk Yarn. The earlier notification was in respect of cotton yarn. Both these notifications provided that if the producer of yarn is not able to comply with the provisions of the notification for valid reasons he shall apply to the Textile Commissioner giving full justification for his inability to comply with the notification and obtain specific orders in that behalf. In other words, the Notifications conferred powers upon the Textile Commissioner to exempt certain producers from the operation of the notifications for valid reasons.

3. The petitioners applied for exemption on July 22, 1979 and the copy of the application addressed to the Textile Commissioner, Bombay, is annexed as Exh. E to the petition. The petitioners set out various reasons for their inability to comply with the requirements of the notifications. The petitioners pointed out that they would be required to spend a large amount for importing the machinery and that they are not in position to secure additional accommodation to keep the same. The petitioners also pointed out various other reasons which need not be set out in detail. In answer to this application, the Senior Enforcement Officer, informed the petitioners by letter dated October 5, 1979 that their request cannot be granted. That order was confirmed by the Government of India by letter dated December 12, 1979. These two orders are under challenge.

4. Shri Setalvad, the learned counsel appearing in support of the petition, raised two contentions to challenge the legality of the order. The learned counsel submitted that it is not permissible for the Government of India to compel any producer to pack yarn in hank form. It was urged that the Government had gone beyond its powers under the Essential Commodities Act by compelling the producer to pack yarn in a hank form, even though the producer was not doing so previously. The learned counsel challenged the competence of the Textile Commissioner to issue such notification. The second attack against the impugned orders was that both, Senior Enforcement Officer and the Deputy Secretary to the Government of India, had not applied their minds to the material produced before them seeking exemption and have passed the orders which suffer from serious infirmities. It was urged that not only the relevant material was not taken into consideration but the order indicates that the officer had a close mind and was not willing to consider any of the valid reasons put forth by the petitioners.

5. On behalf of the respondents, a return has been filed traversing the claim of the petitioners. On hearing the learned counsel for the contesting parties, I find that the second contention raised by Shri Setalvad deserves to be accepted. The two impugned orders clearly suffer from non-application of mind. Shri Dhanuka, appearing on behalf of the respondents, very rightly pointed out that the petitioners have produced certain additional material in this court, so also the Department is in possession of certain material which was not available at the time of passing of the order. Shri Dhanuka suggested that in these circumstances it would be fair to quash the two impugned orders, Exhs. F and I to the Petition, and give direction to the Senior Enforcement Officer to decide the application of the petitioners for exemption afresh on merits. In my Judgment, that would be the proper course to adopt in the present case.

6. Accordingly, the petition succeeds and the order dated October 5, 1979 (Exh. F) and the order dated December 12, 1979 (Exh. I) are set aside and the Senior Enforcement Officer, Bombay, in the office of the Textile Commissioner, is directed to decide the claim of the petitioners for exemption from the operation of the notifications afresh within a period of two months from today. Shri Dhanuka on behalf of the respondents, states that the Department would disclose the material which they possess to the petitioners as early as possible. The petitioners in their turn would furnish the material to the Department thereafter within two weeks. The Senior Enforcement Officer thereafter shall decide the matter on the material produced before him at the earlier stage as well as the subsequent material produced both by the petitioners and the department. The officer shall pass the order after setting out the reasons for his conclusion.

7. The Rule is made absolute accordingly.

8. It is necessary to make it clear that the first contention urged by Shri Setalvad about the competence of the Textile Commissioner to issue the notification is not considered in view of the fact that the impugned orders are set aside on merits. The other contentions which the petitioners desire to urge are also left open. It is also required to be made clear that the Affidavits-in-rejoinder were filed by the petitioners only yesterday when the hearing commenced and Shri Dhanuka requested for grant of time to file the sub-rejoinder. As the matter is being remanded back for a fresh consideration on merits, I do not think it necessary to give him any opportunity to file sub-rejoinder.

9. Shri Setalvad submitted that the Senior Enforcement Officer, who had earlier passed the order dated October 5, 1979, was not authorised to pass such an order. Shri Dhanuka on the other hand submits that the powers are delegated to him by the Textile Commissioner and he was perfectly justified in passing the order. I need not go into the controversy at this stage, as I am sure that the competent officer would pass the order as directed by this Judgment.

10. In the circumstances of the case, there will be no order as to costs.


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