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American Universal Electric (India) Ltd. Vs. Union of India (Uoi) - Court Judgment

LegalCrystal Citation
SubjectExcise
CourtPunjab and Haryana High Court
Decided On
Case NumberCivil Writ Petition No. 6959 of 1975
Judge
Reported in1979(4)ELT125(P& H)
ActsCentral Excises Act, 1944 - Sections 3 and 4; Companies Act
AppellantAmerican Universal Electric (India) Ltd.
RespondentUnion of India (Uoi)
DispositionPetition dismissed
Cases ReferredDaulat Ram Tarlok Nath and Ors. v. The State of Punjab and Ors.
Excerpt:
- sections 100-a [as inserted by act 22 of 2002], 110 & 104 & letters patent, 1865, clause 10: [dr. b.s. chauhan, cj, l. mohapatra & a.s. naidu, jj] letters patent appeal order of single judge of high court passed while deciding matters filed under order 43, rule1 of c.p.c., - held, after introduction of section 110a in the c.p.c., by 2002 amendment act, no letters patent appeal is maintainable against judgment/order/decree passed by a single judge of a high court. a right of appeal, even though a vested one, can be taken away by law. it is pertinent to note that section 100-a introduced by 2002 amendment of the code starts with a non obstante clause. the purpose of such clause is to give the enacting part of an overriding effect in the case of a conflict with laws mentioned with the.....b.s. dhillon, j.1. this common judgment will dispose of civil writ petitions nos. 6958 and 6959 of 1975, as common question of law is involved in both the petitions. it was conceded by the learned counsel for the parties that the decision in c.w.p. no. 6959 of 1975, will also govern the fate of c.w.p. no. 6958 of 1975. the learned counsel for the parties, therefore, only referred to the facts as alleged in c.w.p. no. 6959 of 1975, which may briefly be thus stated.2. messrs american universal electric (india) ltd., faridabad is a public limited company incorporated under the companies act. this company is engaged among other things in the business of manufacture of coolers and electric fans and for this purpose owns a factory situate in model town faridabad. the petitioner company is also.....
Judgment:

B.S. Dhillon, J.

1. This common judgment will dispose of Civil Writ Petitions Nos. 6958 and 6959 of 1975, as common question of law is involved in both the petitions. It was conceded by the learned counsel for the parties that the decision in C.W.P. No. 6959 of 1975, will also govern the fate of C.W.P. No. 6958 of 1975. The learned counsel for the parties, therefore, only referred to the facts as alleged in C.W.P. No. 6959 of 1975, which may briefly be thus stated.

2. Messrs American Universal Electric (India) Ltd., Faridabad is a public limited company incorporated under the Companies Act. This company is engaged among other things in the business of manufacture of coolers and electric fans and for this purpose owns a factory situate in Model Town Faridabad. The petitioner Company is also engaged in the business of sale of air-coolers and electric fans and has thus set up various branches and depots all over the country namely, at Delhi, Madras, Bombay, Calcutta, Patna, Ahmedabad, Hyderbad, Ghaziabad and Chandigarh for sales promotion and to ensure prompt supplies and maintain after sales and service. The Petitioner Company alleges to have a large number of dealers to look after the sales of its products. Trade discounts and credit terms are given to its dealers by the* petitioner Company in the normal course of business, keeping in view the potential of the town, the financial capability of the dealer and expenses incurred in moving its products to its branches in different towns. The various Kroducts of the petitioner Company are being sold on its uniform list prices. : is alleged that the list prices comprise not only of manufacturing cost and manufacturing profits but, also of post-manufacturing expenses which inter alia include octopi, freight, interest, service charges, royalty, publicity, advertisement charges and selling expenses incurred in marketing and distribution.

3. The products manufactured by the petitioner Company are admittedly subject to the levy and payment of excise duty under the Central Excises and Salt Act, 1944 (hereinafter referred to as the Act). Section 3 of the Act provides inter alia that the excise duty shall be levied and collected in such a manner as may be prescribed on all excisable goods other than Salt which are produced or manufactured in India at the rates set forth in the First Schedule. Section 4 of the Act, with the interpretation of which we are concerned in the present cases, is as follows : -

'4 Determination of value for the purposes of duty. - Where under this Act, any article is chargeable with duty at a rate dependent on the value of the articles, such value be deemed to be -

(a) the wholesale cash price for which an article of the like kind and quality is sold or is capable of being sold at the time of removal of the article chargeable with duty from the factory or any other premises of manufacture or production for delivery at the place of manufacture or production, or if a wholesale market does not exist for such article at such place at the nearest place where such market exists, or

(b) * * * *

Explanation. - In determining the price of any article under this section, no abatement or deduction shall be allowed except in respect of trade discount and amount of duty payable at the time of the removal of the article chargeable with duty, from the factory or other premises aforesaid.'

4. The petitioner Company kept on paying the excise duty in respect of the products manufactured by it on the price declared in the price list. The said price list allegedly was inclusive of post-manufacturing expenses, such as octopi, freight etc. paid for the transfer of stock interest involved in the wholesale price which gives credit to the wholesale buyers for a period of time, advertisement, royalty, packing and selling cost plus selling profits. The petitioner-Company kept on submitting the prices of its products duly filed in the proforma known as 'Price List' under Section 4(1)(a) of the Act for payment of excise duty to the petitioner-Company, the excise duty was being paid under a bona fide mistake of law that the same was leviable and payable on the basis of the price list which included post-manufacturing expenses. When Supreme Court of India decided in A.K. Roy and Anr. v. Voltas Limited, A.I.R. 1973 Supreme Court 225-[1977 E.L.T. (J 177)] it is alleged that the petitioner company then realised and discovered the correct legal excise duty, which according to the petitioner Company, was position and therefore, claimed for the refund of the being illegally and unauthorisedly charged and realised in excises inasmuch as while excise duty was chargeable legally only on the real profits in respect of these products Excise Duty according to the petitioner had been assessed, determined and realised on the value inclusive of post-manufacturing expenses coupled with selling cost and selling profits. Vide letter dated 30th March, 1973, the petitioner Company submitted the revised price list dated 24th March, 73 in respect of air coolers approval of respondent No. 2 the Assistant Collector, Central Excises, Sector 4, Faridabad. In working out the assessable value, the petitioner-Company allegedly excluded the post manufacturing expenses, namely, octopi, freight etc. etc. and a request was made to approve the declared price. Similarly, on 26th April, 1973, the petitioner Company submitted the price lists in respect of electric fans for approval of the Superintendent, Central Excise, Faridabad, respondent No. 3. Correspondence went on between the petitioner Company and the respondents, but in spite of the repeated requests, it is alleged that respondents. Nos. 2 and 3 did not approve of the revised price lists and the assessments were continued to be made by the respondent as before without authority of law.

5. Simultaneously with the submission of the revised price lists, the petitioner-Company also filed claims for the refund of excise duty paid on its various products cleared by the petitioner Company from the factory during the period from 1st March, 1969 to 30th April, 1974, in excess of what Was legally due to be paid, inter alia on the following grounds : -

'Differential Excise Duty be paid and the duty that is in fact payable in terms of Supreme Court Judgment No. 232 dated 1st December, 1972, in Civil Appellate Jurisdiction Civil Appeal No. 47 (N) of 1972 between A.K. Roy and Anr. v. Messers Voltas Limited.'

6. It may be pointed out that the refund claims pertain both to the period before the decision of the Supreme Court in Voltas case (supra) and subsequent thereto. Different refund applications were made, the details of which have been given in para 22 of the writ petition. Along with the refund applications, the petitioner-Company also sent documents mentioned in that paragraph. It is alleged in the petition that the excise authorities did not challenge the basis and the correctness of the refund claims on facts but they only pointed but certain mistakes which were duly rectified by the petitioner-Company. By orders dated 25th and 29th July, 1975, the respondent No. 2 rejected the aforesaid claims referred to in paragraph 22 of the petition for refund of the excise duty on the purported ground that the petitioner-Company had been selling its products at the ex-factory prices directly to .the independent buyers and that it was not their case that the excise duty had been charged from them on the basis of the retail price and as such the facts in respect of the refund claims under reference, were clearly distinguishable from those of in Voltas case (supra). Various similar orders were passed on various similar applications of refund which orders are attached as Annexure 'P-14s with the petition.' The applications of the petitioner Company for the refund' of the Excise duty paid on fans and coolers during the period from 1st May, 1974 to 31st August, 1975 are still pending with the respondents.

7. The claim of the petitioner Company is that the excise duty is a tax on the manufacture of goods and not on its sale and thus the same can be levied only on the amount representing manufacturing cost and manufacturing profits. It is claimed that all expenses, which are incurred after the manufacturing of goods, have necessarily to be excluded in determining the wholesale price of the goods under Section 4(1)(a) of the Act. It is claimed that in view of the provisions of Section 4(1)(a) of the Act itself, the wholesale cash price must be free from loading non-manufacturing charges incurred in relation to the goods and that being so, the Explanation to Section 4 of the Act, will not in any manner stand in the way of the petitioner for claiming the relief prayed for. V

8. In the reply filed on behalf of the respondents by way of affidavits of K.K. Dwivedi, Collector, Central Excise Chandigarh, it has been pleaded that the petitioner-Company has not exhausted the alternative remedies of appeal and revision provided under the Act. Therefore, the petition is not maintainable. It has further been averred that the petition is, a petition for the refund, which is again not maintainable. It has been claimed that the disputed question of facts and also triable issues of limitation are involved therefore, the petition should be dismissed. The said preliminary objections were pressed into service by the learned counsel for the Union of India at the end of the arguments and the same with thus be dealt with by me last of all.

9. As regards the contents of the return on merits, it has been averred that the petition Company had been selling its goods directly to independent buyers at ex-factory rates and that the petitioner-Company had been correctly paying the excise-duty under Section 4(1)(a) of the Act. It has been pleaded that the facts and circumstances of the Voltas case (supra) are quite different than the one on hand and, therefore, the petitioner-Company is not entitled to any benefit claimed by it. The details of the correspondence between the petitioner-Company and the respondents have been controverted to some extent and it has been averred that it is incorrect to suggest that the authorities did not challenge the basis of the refund claims. It has been averred that the excise duty was being charged in accordance with the provisions of Section 4(1)(a) of the Act, and the order refusing the refund has been correctly passed. It has, therefore, been averred that the petition be dismissed.

10. It is not disputed that till the decision in Voltas case (supra) was pronounced by the Supreme Court, the petitioner-Company paid excise duty in accordance with the provisions of Section 4(1)(a) of the Act, and the price as shown by it in the price list approved by the Department, was the wholesale cash price at the factory gate. It was only after the decision in Voltas case (supra) that the petitioner claimed a refund on the basis that the said wholesale cash price included the post-manufacturing expenses. Averment has been made to this effect in para 4 of the petition but this fact has been denied in the return filed on behalf of the respondents, as is clear from the averments made in reply to paras 4 and 7 of the petition. The averment that the earlier price list was inclusive of the post-manufacturing expenses such as octopi, frieght etc. etc. has been specifically denied and it has been averred that the contentions of the petitioner that the said price included the post-manufacturing expenses are wholly wrong and without any basis. It is claimed that the approved price list was in fact the wholesale cash price of the goods which were being sold at ex-factory prices directly to independent buyers. Further in para 23 of the return, it has been averred that it is wholly wrong that the authorities did not challenge the basis of the refund claims. In fact the petitioner-company has no basis at all for the refund claims. It is further averred in para 34 of the return that the prices of the petitioner for manufacturing goods were correctly approved under Section 4(1)(a) of the Act and in view of the reasons advanced in the adjudication order, the refund applications were correctly rejected In para 36 of the return, it has been averred that the petitioner-Company is now alleging non-existent facts to erroneously bring its case at par with Voltas case (supra).

11 From what has been stated above, if would be seen that the case of the petitioner-Company that the price list earlier got approved by the Company from the Revenue included post-manufacturing expenses, has been vehemently disputed in the return. The impugned cider by which the prayer for refund was rejected, also held that the ratio in voltas case (supra) does not apply to the facts of the present case and that the petitioner-Company had been selling its products at ex-factory price directly to the independent buyers, therefore the excise duty has been correctly levied. It has further been held in the impugned order that it is not the case of the petitioner-Company that post-manufacturing expenses and post-manufacturing profits represent trade discount or the Amount of duty payable at the time of removal of articles mentioned in the refund claims. It may be pointed out that there is no finding recorded in the impugned order on facts that the-P. 10 price list approved in fact included post-manufacturing expenses. No grievance has been/made out in the petition that the respondents i.e. concerned authorities have failed to adjudicate upon the facts on the material placed before them by the petitioner-Company. Admittedly, no appeal or revision, which remedy has been provided under the Act, was filed by the petitioner-company. It is no doubt true that there is merit in the contention of the learned counsel for the petitioner-Company that in a number of such cases the Union of India, which is the revisional authority under the Act, has taken the stand contrary to the contentions of the petitioner-Company as regards the 'interpretation of Volta Case (supra) and Atic Industries Ltd. v. H.H. Dave, Assistant Collector Central Excise and Ors. - 1978 E.L.T. (J 444)=A.I.R. 1975 Supreme Court 960, and, therefore, the remedy of appeal or revision was in fact illusory, as the revisional authority, i.e. Higher authority under the Act had pre-deter-mined its mind, but at the same time, before the ratio of the above-mentioned cases, as has been pressed into service by the learned counsel for the petitioners. can be applied to the facts have to be found out by the authorities. There is nc finding given by any authority that the price list approved by the authorities earlier, which was shown as wholesale cash price by the petitioner-Company itself before the decision of the Voltas case (supra) also included the post-manufacturing expenses. If this finding was warranted and was not given by the Assistant Collector, it was incumbent upon the petitioners to have approached the appellate authority or the revisional authority for getting this finding of fact so that the ratio in Voltas case and Atic Industries' case (supra) as is being interpreted by the learned counsel for the petitioners could be made applicable to the case of the petitioner-Company. As has been pointed out, the averments made in the petition that the said price list included the post-manufacturing expenses, has been vehemently denied in the return and, therefore, the facts on the basis of which the legal argument is sought to be based by the learned counsel for the petitioners are not in fact available as the same are disputed. It is not possible for this Court to go into the disputed questions of facts as to whether the price list approved earlier by the authorities at the instance of the petitioner-Company itself before the decision of the Voltas case (supra) included the post-manufacturing expenses or not. Therefore the premises on which the legal argument is sought to be based, are non-existent in this case and, therefore, even in Voltas case and Atic Industries case (supra) be taken to be as is being given by the learned counsel for the petitioners, the petitioner-Company cannot get any relief in these proceedings.

12. I have very carefully gone through the judgments of their Lordships of the Supreme Court in Voltas case and Atic Industries case (supra) and in my considered opinion both the judgments cannot be interpreted in the manner as is being contended by the learned counsel for the petitioners in order to construe the ratio of the decision of their Lordships of the Supreme Court in the above mentioned cases, the facts and the points in issue in the said cases have to be kept in view. M/s Voltas is a manufacturing concern of air conditioners, water coolers etc. and had its own sale organisations for sale at its various offices from which direct sales to the consumers had been made at the list prices to the extent of 90 to 95 per cent of the production and the remaining percentage of goods was being sold to the wholesale dealers under the agreements which contemplated a commercial advantage in the shape of serving obligation where the wholesale price charged was the list price less 22 per cent discount. The first question determined by their Lordships of the Supreme Court was that for the purpose of Section 4(1)(a) of the Act, wholesale cash price would be the price under an agreement with wholesale dealer stipulating for commercial advantages if such agreement was made at arms length and in usual course of business and it was not necessary that such purchasers must be independent persons. The next question which was resolved by the Supreme Court was the meaning of the term 'wholesale cash price'. It was held by their Lordships of the Supreme Court that it is not necessary for attracting the operation of Section 4(1)(a) of the Act, that there should be wholesale of large percentage of goods produced by the manufacturer. The quantum of goods sold by manufacturer on wholesale basis is entirely irrelevant, It was held that the mere fact that such sales may be few or scanty, does not alter the true position. Their Lordships while making distinction between the 'wholesale price' and the 'retail price' emphasised that the wholesale price must be relieved of the loading representing post-importation expenses which as a matter of business, must always be charged to the consumer and which must be eliminated. It was in this context that it was further elaborated by explaining that when a sale was effected in the retail market, it took within its sweep]the profit attributable to the wholesalers who having purchased the goods from the manufacturer, sold it to the retailer or to the consumer at a profit. The price paid by the retailer would take in- to account the profit which would go into the coffers of the wholesale with which the manufacturer had nothing to do. It was in this context that their Lordships have made this observation on which strong reliance has been placed by the learned counsel for the petitioners to contend that Section 4(1)(a) provided that the real value should be found out after deducting the selling cost and the selling profits and that the real value could include only the manufacturing cost and the manufacturing profits. In my opinion, this decision of their Lordships only gives the rational basis of the measure embodied in Section 4, of the wholesale cash price at the factory gate in the context of the controversy whether the retail price realised by the manufacturing concern a large percentage of goods produced in a case where the manufacturer has also the selling organisation for sale directly to the consumers, should be taken as a basis for computing the liability. This decision could never be pressed in aid for the view that any further deductions were contemplated to be made in favour of the manufacturer on any score, which are nowhere indicated in Section 4(1)(a) keeping in view the Explanation to Section 4 of the Act. The observations made were only for clearly bringing out distinction between the wholesale and retail prices. Reference to the freight and octroi made by their Lordships, was the necessary adjustments to give effect to the concept of wholesale cash price at the factory gate and to arrive at the net wholesale cash price. The scope of the Explanation to Section 4 never came up for consideration in the said judgment. If the said judgment is interpreted in the manner as is being done by the learned counsel for the petitioners it would be reading some thing more in Section 4 of the Act which is non-existent that notwithstanding the explanation even in cases falling under Section 4(1)(a), the manufacturer can claim some further deductions beyond the Explanation itself. No such question or issue in fact arose in Voltas case (supra).

13. The contention noticed by their Lordships advanced on behalf of the appellants in Voltas case (supra) in paragraph 22 would further show that 22 per cent discount; which was claimed in the said case, was in fact claimed because it was covered under the Explanation to Section 4 of the Act itself as trade discount. If the post manufacturing price was to be excluded as has now been contended there would have been no question of raising the contention as noticed in paragraph 22 of the judgment. It was contended by the appellants before their Lordships that 22 percent discount allowed under the agreements with the wholesale dealers was not trade discount on the ground that there was no evidence to show that the discount allowed was trade discount, within the meaning of Explanation to Section 4 of the Act. If the contention of the learned counsel for the petitioners is correct that post-manufacturing cost has to be excluded in view of the interpretation of Sub-section (a) of Section 4 and that the Explanation to Section 4 had to be ignored and thus it was not necessary to raise such a contention. This contention was repelled by their Lordships on the ground that no such question was raised before the High Court. It was held that no data was placed before the High Court by the appellants to show that 22 per cent discount did not represent 'trade discount' for the purpose of Explanation. It was further held that as it was not the case of the appellants that there was any secret arrangement between wholesale dealers and the respondent in respect of sales to them or that the price of the articles was under-stated in the agreements or that any extra-commercial advantages to the dealers were taken into account in fixing the price, their Lordships thought that they should not go into the question whether the discount allowed to the wholesale dealers was 'trade discount' or not for the purpose of the Explanation to Section 4 of the Act. These findings of their Lordships clearly go to show that from the earlier observations made by their Lordships, it could not be as has been contended that the post-manufacturing cost was to be excluded in view of the working of sub-clause (a) of Section 4, but in fact the case was brought under the purview of Explanation to Section 4 and that finding having been recorded, 22 per cent was held to be a 'trade discount'.

14. Even in the next decision in Atic Industries case (supra), their Lordships only elaborated two concepts of excise and factory gate. The facts giving, rise to that case may summarily be stated. The manufacturer of the dye stuffs sold its products to two wholesale buyers, namely, I.C.I. (India) Ltd. and Atul Products Ltd., to the extent of 70% at the basic selling price less trade discount of 18 per cent and they in their turn resold these dye-stuffs to consumers and other distributors. The first point which was settled, was that the wholesale dealings between the manufacturers and those two wholesale dealers ICI and Atul ware purely commercial dealings at arms length and the wholesale price less 18 per cent discount was held to be the wholesale case price within the meaning of Section 4(1)(a) of the Act as it was held that it made no difference that this wholesale dealings were confined only to these two wholesalers and apart from them no independent buyers could purchase the dye-stuffs in wholesale, The second question answered was that the basis which had to be taken for purposes of Section 4(1)(a), was the price charged to these first wholesalers and not the second or subsequent price to the other wholesale distributors. It was held that if second or subsequent sales were taken into account the two basic principles of the nature of excise and the factory gate concept would be violated. The ratio of the judgment is contained in the following paragraph : -

'There can, therefore, be no doubt that where a manufacturer sells the goods manufactured by him 'in wholesale dealer at arms length and in the usual course of business, the wholesale cash pries charged by him to the wholesale dealer less trade discount would represent the value of the goods for the purpose of assessment of excise. That would be the wholesale cash price for which the goods are sold at the factory gate within the meaning of Saection 4(1)(a). The price received by the wholesale dealer who purchases the goods from the manufacturer and in his turn sells the same in wholesale to other dealers would be irrelevant to the determination of the value and the goods would not be chargeable to excise duty on that basis. The conclusion is therefore, inescapable that the assessable value of the dye-stuffs manufactured by the appellants must be taken to be the price at which they were sold by the appellants to ICI and Atul less 18% trade discount, and not the price charged by ICI and Atul to their dealers.'

15. It would thus be clear that this decision only elaborates the factory gate concept or the true nature of excise in the context of the relevant controversy raised in this case. The post manufacturing elements have been emphasized only in the context of making a distinction between the first wholesale price and the subsequent price after the goods have entered the stream of trade because at the earlier stage there would be no question of loading the price with any post-manufacturing element, namely, selling cost and selling profit of the wholesale dealer as envisaged by their Lordships.

16. From the above discussion, it would be seen that in those cases, namely, Voltas case and Atic Industries case (supra), it was held that where the manufacturers sold the goods manufactured by them in wholesale to a wholesale dealer at arms length at the factory gate and in the usual course of business, the wholesale cash price charged by them to the wholesale dealer less trade discount, if any, as envisaged under the Explanation to Section 4 of the Act, would represent the real value of the goods for the purpose of assessment of excise irrespective of the quantity of the manufactured goods sold at wholesale cash price.

17. The learned counsel for the petitioners has relied on various decisions of various High Courts in support of the proposition advanced by him. Reliance has been placed on a decision of the Kerala High Court in The Madras: Rubber Factory Ltd. v. The Assistant Collector of Central Excise and Ors., I.L.R. (1975) II Kerala 407-1977 ELT (1 85), I.T.C. Ltd. and Anr. v. The Union of India and Ors., 1915 Tax L.R. 1644, and The Union of India and Ors. v. I.T.C. Ltd., - 1976 Tax L.R. 2003, both-of the Karnataka High Court; The Vazir Sultan Tobacco Company Limited v. The Union of India and Ors. (C. W. No. 1948 of 1774) decided on 19th December, 1975, a decision of the Andhra Pradesh High Court; Indian Tobacco Company Ltd. v. The Union of India and Ors., (Misc. Petition No. 293 of 1974), decided 15th December, 1975, a decision of the Maharashtra High Court; add The Madras Rubber Factory Ltd. v. The Superintendent of Central Excise, Madras North Range, Madras and Ors., (C. W. No. 2172 of 1972) decided on 13th February 1976. I have carefully perused the above mentioned judgments and in my view the said decisions have been arrived at on the wrong interpretation of the ratio of the decisions in Voltas case and Atic Industries case (supra). It may be pointed out at this stage that a Division Blench of the Gujarat High Court in Golden Tobacco Co. Ltd. v. The Union of India and Ors., 1977 E.L.T. (J 113) has interpreted the judgments in Voltas case and Atic Industries case (supra) in the way I have interpreted those judgments. The learned judges of the Gujarat High Court constituting the Division Bench while considering the decisions of Karnataka High Court in I.T.C. Ltd, v. The Union of India and Ors., 1975 Tax. L.R. 1644; Maharashtra High Court in Misc. Petition No. 293 of 1974 in I.T.C. Co. Ltd. v. The Union of India, decided on 15-12-1975; and Kerala High Court in the Madras Rubber Factory's case (supra) held as follows :

'Those decisions have proceeded on the assumption that Voltas' decision or the Atic decision have explained the true 'nature of excise and, therefore, while working out this measure under Section 4(1)(a), apportionment principle must be accepted for apportioning the manufacturing cost and the marketing cost when the manufacturer has the selling organisation. These decisions, with great respect, have not borne in mind the crucial fact in all these four binding decisions the controversy was as to the true meaning of the wholesale cash price where the distinction had to be made between the wholesale and the retail price or the first wholesale price where and the second or subsequent wholesale prices. They have with great respect, ignored the very working of the Explanation which is so emphatic and the 'emphasis which their Lordships of the Privy Council had placed on the term 'easily ascertained wholesale price' where adjustment would be only of such items as interest, freight and octroi etc. so that the measure would be truly applied by arriving at the real wholesale cash value at the factory gate at the time of the removal of the goods by taking into account the item of interest where is a credit sale 'or the amount of freight charged upto the factory gate or the nearest market place to translate that price into the wholesale cash price there and then at the factory gate when the goods first enter the stream of trade. The whole aspect of post-manufacturing expenses would come in only after the first whole-sale at the stage of subsequent wholesale dealing or the retail dealings and if that subsequent wholesale price or retail price is not to be basis for this excise levy, it is obvious that no adjustment could be made by way of any such apportionment which would make the wholesale price uncertain and not easily ascertainable as envisaged by their Lordships. Even under Section 4(1)(b) when the sale is direct to the consumers in retail trade, the inquiry is not into the selling cost of the manufacturer's selling organisation but for ascertaining the wholesale cash price of the similar product at the factory gate or the nearest place because such wholesale cash price of the same product is not ascertainable. Therefore, on the basis of the aforesaid High Court decisions it could never be urged by the Petitioner in the face of these aforesaid binding decisions that the authorities were adopting any ultra vires approach because Voltas or Atic ratio has never laid down any such apportionment which would be against the plain terms of the Explanation to Section 4.'

18. I am in respectful agreement with the above mentioned observations of their Lordships of the Gujarat High Court and, therefore, the decisions relied upon by the learned counsel for the petitioners, which are not of binding nature are of no help to him.

19. The preliminary issue raised by the learned counsel for the Union of India, that no writ can be issued for the refund of tax, is really without any merit. Reliance has been placed on a Full Bench decision of this Court in Daulat Ram Tarlok Nath and Ors. v. The State of Punjab and Ors., A.I.R. 1976 Punjab and Haryana, 304, in that regard. The said decision is not applicable to the facts of the present case as in the said case the relief was claimed merely for the refund of the market fee paid. In the present case, the impugned order of the authority concerned has been challenged on the ground that the said order is based on the wrong interpretation of Section 4(1) of the Act. A prayer has been made for the quashing of the said order. If the contention of the petitioners was well founded on merits, the prayer for the quashing of the order and for directing authorities to proceed in accordance with law could be subject matter of a writ petition. In the Full Bench authority in M/s. Daulat Ram's case (supra) the particular issue was; whether in the absence of any challenge to a statutory provision or order, the relief for the payment of a sum of money simpliciter can be claimed. The learned Judges constituting the Full Bench held that this cannot be done, but as I have already pointed out in the present case, there is a challenge to the order of the authority on the ground that the said order has been passed on the wrong interpretation of the provisions of Section 4(1)(a). The preliminary objection is, therefore, without any merit and is over-ruled.

20. The only other plea taken by the learned counsel for the respondent is that some of the claims of refund are barred by time. If the petition was found to be well founded on merits, it could not be dismissed on this ground, if the petition was to be allowed, the authority who was to decided about the entitlement of the refund, if any, could go into this question and the same was not to be gone into by this court.

21. The next contention that the petitioners have not availed of the alternative remedy, therefore, the writ petition be dismissed, is also without any merit. As would be seen in a number of cases, which were decided by various High Courts reliance on which was placed by the learned counsel for the petitioners, namely, (1) The Madras Rubber Factory's case, (2) I.T.C.'s cases, (3) Vazir Sultan Tobacco's case, (4) Indian Tobacco Company's case (supra), the Union of India took the plea that the interpretation as given to the binding decisions of their Lordships in Voltas case and Atic Industries case (supra) was being wrongly given and the plea taken was unsustainable. It is not disputed that the Union of India is the final revisional authority under the Act. The stand of the Union of India throughout having been positively taken contrary to the contentions raised by the petitioners, the remedy by way of appeal or revision in fact appears to be illusory and in these circumstances, there will be no bar for the writ petition being entertained. Therefore, the writ petition cannot be dismissed on that preliminary objection. In view of the fact that the main contention of the petitioners have not prevailed with me both the writ petitions C.W. No. 6959 of 1975 and C.W. No. 6958 of 1975 are, therefore, dismissed. However, keeping in view the facts and circumstances of the case, there will be no order as to costs.


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