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Sitaram Vilas Talkies, Utkal Cinema, Vijaya Talkies and Jyoti Picture Palace Vs. Commercial Tax Officer and anr. - Court Judgment

LegalCrystal Citation
SubjectOther Taxes;Constitution
CourtOrissa High Court
Decided On
Case NumberO.J.Cs. Nos. 1851, 1852, 1853 and 1854 of 1980 and 1753, 1799 and 1800 of 1982
Judge
Reported in1984(II)OLR854
ActsOrissa Entertainment Tax Act, 1946 - Sections 6(1); Orissa Entertainment Tax Rules, 1947 - Rules 21 and 27(1)
AppellantSitaram Vilas Talkies, Utkal Cinema, Vijaya Talkies and Jyoti Picture Palace;saheb Behera, Dayanidhi
RespondentCommercial Tax Officer and anr.;commercial Tax Officer
Appellant AdvocateRanjit Mohanty, Adv.
Respondent AdvocateStanding Counsel and Adv. General (Amicus curiae)
DispositionPetition dismissed
Cases ReferredUnion of India v. J. N. Sinha
Excerpt:
- labour & services pay scale:[tarun chatterjee & r.m. lodha,jj] fixation - orissa service code (1939), rule 74(b) promotion - government servant, by virtue of rule 74(b), gets higher pay than what he was getting immediately before his promotion - circular dated 19.3.1983 modifying earlier circular dated 18.6.1982 resulting in reduction of pay of employee on promotion held, it is not legal. statutory rules cannot be altered or amended by such executive orders or circulars or instructions nor can they replace statutory rules. - ' the learned counsel submits that once this is satisfied, the rest of the conditions follow. if i fail to submit true returns it is open to you to forfeit the security furnished and recover the taxes due from me in addition to. 6. the learned, counsel for.....pathak, c.j.1. the facts giving rise to these seven writ petitions are common, short and simple arising out of the orissa entertainment tax act, 1946 (hereinafter called the 'act') and the orissa entertainment tax rules, 1947 (briefly, the 'rules').2. the petitioners are the proprietors of the cinema halls in question and they were permitted to pay the tax under the provisions of section 6(1) (c) of the act on the basis of returns. the petitioners made applications under rule 21 of the rules in form iii to the appropriate authority for allowing them to pay the tax u/s. 6(1) (c) of the act and they were granted permission under form iv to avail of the provisions of section 6(1) (c) for payment of the tax on the basis of returns: it is the case of the petitioners that by an order passed by.....
Judgment:

Pathak, C.J.

1. The facts giving rise to these seven writ petitions are common, short and simple arising out of the Orissa Entertainment Tax Act, 1946 (hereinafter called the 'Act') and the Orissa Entertainment Tax Rules, 1947 (briefly, the 'Rules').

2. The petitioners are the proprietors of the cinema halls in question and they were permitted to pay the tax under the provisions of Section 6(1) (c) of the Act on the basis of returns. The petitioners made applications under Rule 21 of the Rules in Form III to the appropriate authority for allowing them to pay the tax u/s. 6(1) (c) of the Act and they were granted permission under Form IV to avail of the provisions of Section 6(1) (c) for payment of the tax on the basis of returns: It is the case of the petitioners that by an order passed by the Commercial Tax Officer, opposite party No. 1, the permission granted to them to pay the entertainment tax on the basis of returns has been revoked as per Clause (1) of the permit as 'sufficient stamps are now available in the treasury'. They were also requested to make indents immediately for the Orissa entertainment tax stamps from the local treasury. In all these writ applications, the petitioners have challenged the revocation of the permission granted of them.

3. Before considering the rival contentions of the parties, we think that it will be useful to refer to some of the relevant provisions of the Act and the Rules.

Section 6 of the Act as it stood prior to the amendment in 1961 by Orissa Act 16 of 3961 reads as follows :

'6. (1) Save in the cases referred to in Section 5, no person shall be admitted for payment- to any entertainment where the payment is subject to the tax except-

(a) with a ticket stamped with an impressed, embossed, engraved or adhesive stamp (not previously used) issued by the State Government and indicating the proper tax for such ticket, or

(b) in special cases, the approval of the State Government through a barrier which, or by means of a mechanical contrivance which automatically registers the number of persons admitted,

(emphasised)

unless the proprietor of the entertainment has made arrangements approved by the State Government for furnishing returns of the payments for admission to the entertainment and on account of the tax and has given security upto an amount and in a manner approved by the State Government for the payment of the tax.

(2) Nothing in Sub-sac. (1) shall be deemed to preclude the State Government from requiting security from the proprietor of an entertainment, for the payment of the tax in other cases.'

Section 6 as it now stands after the 1961 Amendment, so far as levant for our purpose, reads as follows :

'6. (1) Save in the cases referred to in Section 5, no person shall be admitted for payment to any entertainment where the payment is subject to tax except -

(a) with a ticket stamped with an impressed, embossed, engraved or adhesive stamp (not previously used) issued by the State Government and indicating the proper tax for such ticket, provided the proprietor of the entertainment furnishes such accounts as may be prescribed ; or

(b) with the prior approval of the State Government

x x x x

(This provision does not concern us)

(c) where the proprietor of the entertainment has, with the prior approval of the State Government and subject to the rules made in that behalf, made arrangements for furnishing the returns of the payment for admission to the entertainment and on account of tax and has given a security upto an amount and in a manner approved by the State Government for the payment of the tax :

Provided * * * * * * * * * *.'(Underlined by us)

Rule 15 provides for the proprietor to give at least 5 days' notice of the place, date, time and nature of the entertainment to the Commercial Tax Officer. This rule is under Chapter II of the Rules and is applicable to the payment made under Clause (a) of Sub-section (1) of Section 6 of the Act.

Chapter III of the Rules makes provisions for payment of the tax on the basis of returns. Rule 21 reads as follows :

'21. Any proprietor wishing to enter into an arrangement for the payment of the tax in the manner prescribed in Clause (b) of Section 5 or in Sub-section (1) of Section 6 of the Act shall apply to the competent authority at least three days before the entertainment, in Form III furnishing details as to the place, date., time and nature of the entertainment and also the rates of payments for admission to it. Except in cases where the competent authority has, by an order in writing, exempted the proprietor from doing so, the application shall be accompanied by the tickets of all classes proposed for issue, the tickets of each class being printed in a different colour and bearing separate serial numbers. The competent authority may, for sufficient reasons, condone the delay in the presentation of the application provided it is presented at least 24 hours prior to the commencement of the entertainment.'

Rule 22 reads as follows :

'22. The competent authority shall fix the amount and the nature of the security to be furnished by the proprietor and the time within which such security should be furnished. When the security is furnished, the competent authority shall grant the proprietor a permit in Form IV.

NOTE-The security deposit may take the form of cash deposit, cash certificate, Government Promissory Notes, Savings Bank Account etc., as may be decided by the competent authority.'

Rule 27 reads as follows :

'27. (1) The proprietor shall keep true and correct accounts and submit the returns to the competent authority in the manner specified in the permit in Form IV and shall also abide by, and comply with, all the conditions specified therein.

(Underscored by us)

(2) The proprietor shall pay the tax due into a district treasury or a sub-treasury by means of a challan. He shall attach the treasury receipt to the return to which the tax relates.'

There is no dispute that in 1984 the powers of the State Government under Section 6(1) (c) were delegated to the Commercial Tax Officer by virtue of the Notification dated 19th February, 1964 issued in exercise of the powers under Section 10.

4. Mr. Ranjit Mohanty, the learned counsel for the petitioners, submits that the provisions of Clauses (a), (b) and (c) of Sub-section (1) of Section 6 are disjunctive and mutually exclusive as is clear from the use of the word 'or' after each sub-clause which underscores the position that they are mutually distinct and not co-de pendant and/or contingent. It is also submitted that none of the sub-clauses has any primacy over the other, nor are the sub-clauses subordinate to each other.

It is further submitted that on a reading of Clause (c) of Sub-section (1) of Section 6, it is found that the conditions pre-requisite for this clause are :

(i) Prior approval of the State Government.

(ii) Subject to the rules,

(iii) Security has been given, and

(iv) Approved method of payment of tax.

The learned counsel submits that the obligation of the proprietor is 'arrangement for furnishing the returns of the payments for admission to the entertainment.' The learned counsel submits that once this is satisfied, the rest of the conditions follow.

5. The main submission of the learned counsel for the petitioners is that the provisions of Section 6 (1) of the Act indicate in the aforesaid three clauses, namely, (a), (b) and (c), that the proprietor may have the option of making payment of the tax in any one of the modes of payment provided in the aforesaid clauses. He has submitted that once the authority has given prior approval and granted permission to make the payment by way of returns, it cannot be revoked unilaterally without giving the proprietors an opportunity of being heard. Therefore, according to the learned counsel, the revocation of the permit by the authority is in flagrant violation of the principles of natural justice.

As we have noticed, the main controversy hinges on the question as to whether the payment of entertainment tax under the Act is to be made by way of adhesive stamps affixed to the cinema ticket or by the alternative modes. This brings into focus the provisions of Clauses (a), (b) and (c) of Sub-sec.(l) of Section6. On a proper reading of the provisions of Section 6 it appears that the usual and normal mode of payment is as provided under Clause (a) of Section 6(1). So far as Clauses (b) and (c) are concerned, the same are hedged inasmuch as prior approval is necessary, application is to be made and it must be in accordance with rules. Clause (a) of Section 6(1) is not any way encumbered or hedged. There is no question of making any application by the proprietor for making payment under this clause, the only requirement being giving of three days' notice to the competent authority as required by Rule 15. On the other hand, Clause (c) of Section 6(1) with which we are concerned is hedged with certain pre-conditions as we have noticed above. Further, even assuming that Clauses (a), (b) and (c) are mutually exclusive and the proprietor can opt to make the payment in one of the modes, it cannot be said that the authority cannot adopt any one of the modes for collection of the tax. The authority is not precluded from adopting the mode provided under Clause (a) of Section 6(1) having once given permission under Clause (c) of Section 6(1). The petitioners' counsel fairly concedes that the authority having the power to grant the permit may also legitimately exercise the power of revocation of the permit.

Mr. Mohanty further draws our attention to the provision of Section 6(1) of the Act as it obtained prior to the amendment in 1961. In the said section, Clause (b) provided that 'in special cases', with the approval of the Provincial Government, the mode of a payment of tax is through a barrier which, or by means of a mechanical contrivance which automatically registers the number of persons admitted.

It is submitted by the learned counsel that in the amended provision of Section 6(1) as it now obtains, no special case is to be made out either as per Clause (b) or Clause (c) in order to opt for payment of tax. The present state of law is that the proprietor is only to make an application in accordance with Rule 21 in Form III and no special case is to be made out. The relevant portion of Form III reads as follows :

'Sir,

I beg to apply for grant of permission to pay the entertainment tax on the basis of returns

under........Section 5 (b) ------------------------the latter part of Section 6(1) of the Orissa Entertainments Tax Act, 1946.

I agree to furnish the security demanded for payment of the entertainment tax due from me and to furnish the returns of payment for admission to the entertainments under each class of ticket value in such form and at such time as may be stipulated.

I agree to pay the taxes due in respect of each entertainment along with the returns before the next entertainment; commences and shall pay any excess found due within seven days after it is demanded.

I agree to and shall abide by all the conditions of the permit.

If I fail to submit true returns it is open to you to forfeit the security furnished and recover the taxes due from me in addition to.Date............... I beg to remain Sir,Yours most obedient servant.'(Emphasis provided)

Once the application is made under Form III and the same is allowed, the permission to pay the tax on the basis of return is given in Form IV. The relevant portion of Form IV with which we are concerned reads as follows:

'(1) This permission may be revoked at any time without reason being assigned and no compensation shall be payable by Government on account of any loss caused to the proprietor by reason of such revocation.'

(Emphasis is supplied by us)

The petitioners made applications in Form III and permission was granted to them under Form IV. Therefore, the petitioners, it is submitted, had a valuable right of making payment in accordance with the permits granted to them on the basis of applications made by them under Rule 21 of the Rules for making payment on the basis of returns as provided under Clause (c) of Section 6(1) of the Act, This valuable right, it is urged, cannot be taken away without giving the petitioners an opportunity of showing cause.

6. The learned, counsel for the petitioners addressed us at great length on the point that the action of the authority in revoking the permission, once granted, without giving any notice to the petitioners to show cause or any opportunity of being heard is clearly arbitrary and in complete violation of the principles of natural justice. A number of decisions have been placed before us by the learned counsel as to the content of the principles of natural justice and under that circumstances the principles should be followed.

The phrase 'natural justice' is not capable of any static and precise definition. It cannot be imprisoned in the straight jacket of a cast-iron furmula,. 'There can be no tape-measure of the extent of the natural justice.' [As observed in Liberty Mills and Ors. v. Union of India and Ors., 1984 (1) Scale, 131]. Historically, natural justice has been used in a way 'which implies the existence of moral principles of self-evident and unarguable truth'. (Natural justice by Paul Jackson, 2nd Edition, Page 1 ). In course of time, the Judges, nurtured in the tradition of British Jurisprudence, often invoked it in conjunction with a reference to 'equity and good conscience'. Legal experts of earlier generations did not draw any distinction between 'natural justice' and 'natural law'. Natural justice was considered as 'that part of natural law which relates to the administration of justice'. Rules of natural justice are not embodied rules. Being means to an end and not an end in itself, it is not possible to make an exhaustive catalogue of such rules. The rules of natural justice are based on the maxim which clothes twin principles, namely, (i) Audi alteram partem and (ii) nemo judex in causa sua. The maxim audi alteram partem has many facets. Two of them are (i) notice of the case to be made and (ii) opportunity to explain. This rule is universally respected and the duty to offer a fair hearing in Lord Loreburn's oft-quoted language is 'a duty lying upon everyone who decides something' in the exercise of legal power. The rule cannot be sacrificed at the altar of administrative convenience or celerity, for, 'convenience and justice', as Lord Atkin felicitously put it, 'are often not on speaking terms.' (General Council of Medical Education v. Spackman, 1943 A. C. 627 at 638).

Two fundamental maxims of natural justice have now become deeply and indelibly ingrained in the common consciousness of mankind as pre-eminently necessary to ensure that the law is applied impartially, objectively and fairly. This principle was well recognised even in the ancient world. It is attributed to Seneca, the philosopher, to have referred in Medea that it is unjust to reach decisions without a full hearing. In Maneka Gandhi's case (AIR 1978 Supreme Court, 597), Bhagwati, J., emphasised that audi alteram partem is a highly effective rule devised by the Courts to ensure that the statutory authority arrives at a just decision and it is calculated to act as a healthy check on the abuse or misuse of power. Hence its reach should not be narrowed and its applicability circumscribed.

During the last few decades, the concept of natural justice has made great strides in the field of administrative law. Before the celebrated decision of the House of Lords in Ridge v. Baldwin (1964 A. C. 40) it was generally thought that the rules of natural justice apply only to judicial or quasi judicial proceedings; and for that purpose whenever a breach of the rules of natural justice was alleged, Courts in England used to ascertain whether the impugned action was taken by the statutory authority or tribunal in exercise of its administrative or quasi judicial power. In India also, the same position obtained prior to the watershed decision of the Supreme Court in Dr. Binapani Dei's case (AIR 1967 Supreme Court, 1269). Wherein it was held that even an administrative order or decision in matters involving civil consequences has been made consistently with the rules of natural justice. The supposed distinction between quasi judicial and administrative decisions which was perceptibly mitigated in Bina Del's case (supra) was further watered down to a vanishing point in A. K. Eraipak v. Union of India (AIR 1970 Supreme Court, 150) where it has been held :

'If the purpose of the rules of natural justice is to prevent miscarriage of justice, one fails to see why these rules should be-made inapplicable to administrative enquiries. Often times, it is not easy to draw the line that demarcates administrative enquiries from quasi judicial enquiries, x x x x. Arriving at a just decision in the aim of both quasi judicial enquiries as well as administrative enquiries. An unjust decision in an administrative enquiry may have more far-reaching effect when a decision in a quasi judicial enquiry.'

In Kraipak's case (supra) the Court also quoted with approval the observations of Lord Parker from the Queen's Bench In re : H. K. (An Infant) 1965 A. C. 201) which were to the effect that good administration and/or honest and bona fide decision require not merely impartiality or merely bringing one's mind to bear on the problem but acting fairly. Thus irrespective of whether the power conferred on a statutory body or tribunal is administrative or quasi judicial a duty to act fairly, i. e., in consonance with the fundamental principles of substantic justice, is generally implied because the presumption is that in a democratic polity wedded to the rule of law, the State of the Legislature does not intend that in exercise of their statutory powers its functionaries should act unfairly or unjustly.

In Mahendra Singh Gill's case (AIR 1978 Supreme Court, 851), Krishna Iyer, J., observed :

'Subject to certain necessary limitation, natural justice is now a brooding omnipresence although varying in its play. Its essence is good conscience is a given situation; nothing more- but nothing less.'

(Emphasised by us)

7. The petitioners' counsel further submits that in view of the factual and legal position, to which our attention has been drawn, the revocation of the permits clearly suffers from the vice of arbitrariness and disregard of the authority to act justly and fairly which is writ large as the revocation was not preceded by any notice to the petitioners.

The learned counsel refers of Liberty Oil Mills and Ors. v. Union of India and Ors,, 1984 (1) Scale, 750 where Their Lordships had to consider a secret circular purported to have been issued under Clause 8-B of the Import Control Order by the Deputy Chief Controller of Imports and Exports on the backdrop of the beef tallow agitation. By the circular, instruction was given to keep in abeyance for six months from the date of issue of the circular any application received from the applicants for the grant of import licence or custom clearance permit and allotment of imported goods through agencies etc. This circular was challenged by the aggrieved persons on the ground that the same was passed without giving any opportunity to them of being heard and without giving them any notice. The Court held that Clause 8-B imports the application of the rules of natural justice where hearing is to be given. But it was decided that the application of the rules of natural justice would be satisfied if a post-decisional hearing at the request of the affected party is given. Dealing with the principles of natural, justice with reference to the circular issued under Cause 8, the Court observed :

'Does it mean that the principle of natural justice of procedural fairness is to be altogether excluded when action is taken under Clause 8-B We do not think so. We do not think that it is permissible to interpret any statutory instrument so as to exclude natural justice, unless the language of the instrument leaves no option to the Court. Procedural fairness embodying natural justice is to be implied whenever action is taken affecting the rights of the parties. It may be that the opportunity to be heard may not be pre-decisional, it may necessarily have to be post-decisional where the danger to be averted or the act to be prevented is imminent or where the action to be taken can brook no delay............There can be no tape-measure of the extent of the natural justice. It may and indeed it must vary from statute to statute, situation to situation and case to case.' (Underlined by us)

Reference is made by the learned counsel to the case of Maneka Gandhi v. Union of India and Anr., A. I. R. 1978 Supreme Court, 597 where Bhagwati, J., has observed as follows :

'56. Now, the question immediately arises as to what is the requirement of Article 14: what is the content and reach of the great equalising principle enunciated in this Article There can be no doubt that it- is a founding faith of the Constitution. It is indeed the pillar on which rests securely the foundation of our democratic republic. And, therefore, it must not be subjected to a. narrow, pedantic or lexicographic approach. No attempt should be made to truncate its all-embracing scope and meaning, for to do so would be to violate its activist magnitude. Equality is a dynamic concept with many aspects and dimensions and it cannot be imprisoned within traditional and doctrinaire limits. We must reiterate here what was pointed out by the majority in E. P. Raoyappa v. State of Tamil Nadu (1974) 2 SCR 348 : (AIR 1974 SC 555) namely, that 'from a positivistic point of view, equality is antithetic to arbitrariness. In fact, equality' and arbitrariness are sworn enemies ; one belongs to the rules of law in a republic, while the other, to the whim and caprice of an absolute monarch. Where an act is arbitrary, it is implicit in it that it is unequal both according to political logic and constitutional law and is therefore viola-tive of Article 14'. Article 14 strikes at arbitrariness in State action and ensures fairness and equality of treatment. The principle of reasonableness, which legally as well as philosophically is an essential element of equality or non-arbitrariness, pervades Article 14 like a brooding omnipresence and the procedure contemplated by Article 21 must answer the test of reasonableness in order to be in conformity with Article 14. It must be 'right and just and fair' and not arbitrary, fanciful or oppressive; otherwise, it would be no procedure at all and the requirement of Article 21 would not be satisfied.

How far natural justice is an essential element of procedure is established by law.'

The learned counsel also refers to the decisions in the case of Ramana Dayaram Shetty v. The International Airport Authority of India (AIR 1979 Supreme Court, 1628)., Ajay Hasia v. Khalid Mujib (AIR 1981 Supreme Court 487), and A. L. Kalra v. P.E.C, 1984 (1) Scale, 798) These decisions have enunciated the principle underlying Article 14 which strikes at the root of arbitrariness.

But the rules of natural justice can operate only in areas not covered by any law validly made. They can supplement the law but cannot supplant it. (Per, Hegde, J. in Kraipak's case (supra). If a statutory provision, either specifically or by inevitable implication, excludes the application of the rules of natural justice, then the Court cannot ignore the mandate of the legislature. Whether or not the application of the principles of natural justice in a given case has been excluded wholly or in part in exercise of the statutory power depends upon language and basis scheme of the provision conferring power, the nature of the power, the purpose for which it is conferred and the effect of the exercise of that power.

S.A. de Smith, a celebrated authority on Administrative Law, has tersely put that even where the rules of natural justice are prima facie applicable, they may be partly or wholly excluded by clear statutory language or necessary implication. (Constitution and Administrative Law, 3rd Edn., 561).

8. 'From the discussion -culled above, it is seen that the principles of natural justice have got a vital role to play, bat that will be Only applicable to those cases where the application of the principles of natural justice is appropriate. But the applicability of the principles of natural justice may not be called in aid when the provisions of a statute read as a whole indicate, either expressly or by necessary implication, that the rules of natural justice have been excluded, and no grievance can be made that the principles of natural justice have not been followed.

9. Mr. J. K. Patnaik, the learned standing counsel for opposite parties Nos. 1 and 2, draws our attention to statutory Forms III and IV and submits that in view of the conditions laid down in the penultimate clause of Form III that 'I agree to and shall abide by all the conditions of the permit' and the first condition of 'Form IV that 'Time permission may be revoked at any time without reason being assigned and no compensation shall be payable by Government on account of any loss caused to the proprietor by reason of revocation', the petitioners were fully aware of the position when they made their applications in Form III to the Commercial Tax Officer, opposite party No. 1. According to the learned counsel, in the above background there has been no violation of the rules of natural justice when the revocation of the permits was made by the opposite party No. 1 on the ground of availability of sufficient entertainment tax in the treasury without giving any opportunity of hearing to the petitioners.

10. The learned Advocate-General, who was given notice to assist the Court as amicus curiae and has appeared as such, has submitted that the State is also interested in the matter. He draws our attention to a number of provisions of the Act and the Rules in support of his submission that in view of the statutory provisions the petitioners were not entitled to notice before their permits were revoked.

Section 6(1) (c) in terms enacts that the prior approval of the competent authority is to be obtained in order to pay the tax On the basis of return and that it should be in accordance with rules. Rule 21 of the Rules provides for making application in statutory Form III. If the application is allowed, the permit is issued in statutory Form IV for payment of the tax on the basis of return. The latter portion of Rule 27(1) reads. : '......shall also abide by and comply with all the conditions specified therein. referring to the condition enumerated in Form IV.

The penultimate clause of Form III runs as follow :

I agree to and shall abide by all the conditions of the permit.'

The first condition of Form IV, which we have already noticed, runs as follows :

'(1). This permission may be revoked at any time without reason being assigned............'

The learned Advocate-General submits that the above are the in-built provisions of the Statute; Section 6(1) (c) requiring that it must be in accordance with rules; Rule 27 (1) requiring 'shall also abide by and comply with all the conditions specified therein', referring to Form IV; the penultimate clause of Form III requiring 'I agree to and shall abide by all the conditions of the permit and also condition No. (1) of Form IV enumerated in the permit to the effect that 'This permission may be revoked at any time without reason being assigned.....................'. These provisions are clearly indicative of the fact that before taking action for revocation of the permit, no notice is to be given to the proprietor. Therefore, the above provisions have, by necessary implication, excluded the application of the rules of natural justice.

11. The learned Advocate-General further submits that the revocation of the permits has entailed no civil consequence because the petitioners may now keep on running their business by making payment of the tax under the provision of Section 6(1) (a) of the Act. He refers to Maneka Gandh's case (supra) and particularly draws our attention to paragraph 21 where at page 689 of the Reported, Kaiasam, J., has observed that toe Legislature by making an express provision may deny a person the right to be heard. His Lordship has stated that the rules of natural justice cannot be equated with fundamental rights. His Lordship has quoted with approval the following passage from the decision of the Supreme Court in Union of India v. J. N. Sinha, AIR 1971 Supreme Court, 40:

'Rules of natural justice are not embodied rules nor can they be elevated to the position of fundamental rights. Their aim is to secure justice or to prevent miscarriage of justice. These rules can operate only in areas not covered by any law validly made. They do not supplant the law but supplement it. If a statutory provision can be read consistently with the principles of natural justice, the Courts should do so. But if a statutory provision either specifically or by necessary implication excludes the application of any rules of natural justice, then the Court cannot ignore the mandate of the Legislature or the statutory authority and read into the concerned provision the principles of natural justice.'

12. On an overall consideration of the lagal position found in the Act and the Rules which we have elaborately discussed above, we are of the firm opinion that on the fact, situation and the legal position, the revocation of the permits issued to the petitioners cannot be said to be in violation of the principles of natural justice. The permits were granted in Form IV, application having been made in Form III in accordance with the provision of Rule 21 of the Rules. We have also noticed the provision of Sub-rule (1) of Rule 27. The above provisions amply show that the petitioners clearly knew about the legal position when the permits were obtained that the permits could be revoked without assigning any reason. The submission of the learned counsel for the petitioners, that in the impugned order of revocation the reason given to the effect that 'sufficient stamps are now available in the local treasury' is not germane or has no nexus to the revocation, is not tenable.

13. In the result, these writ petitions are without merit and they are accordingly dismissed. In the facts and circumstances of the case, there will be no order for costs.

The stay order passed in each of the writ applications stands vacated.


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