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Gupta Tobacco Co. Tobacco Dealers, Through J.P. Gupta Vs. Union of India, Through Secy, Govt. of India , Ministry of Finance (Dept. of Revenue) New Delhi and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtDelhi High Court
Decided On
Case Number C.W. No. 156-D of 1963
Judge
Reported inAIR1968Delhi64; 3(1967)DLT284
ActsConstitution of India - Article 226; Central Excise Rules, 1944 - Rule 151
AppellantGupta Tobacco Co. Tobacco Dealers, Through J.P. Gupta
RespondentUnion of India, Through Secy, Govt. of India , Ministry of Finance (Dept. of Revenue) New Delhi and
Appellant Advocate Yogeshwar Dayal, Adv
Respondent Advocate S.N. Shanker and ; N.S. Rao, Advs.
Excerpt:
.....151 of the central excise rules, 1944 should be quashed as it was passed by the superintendent, central excise, in violation of the principles of natural justice. - section 13: [altamas kabir & cyriac joseph,jj] custody of child - welfare of child vis--vis comity of courts - the minor girl child of 3 1/2 years was brought to india by her mother. the minor girl was a citizen of u.k. being born in u.k. her parents had set up their matrimonial home in u.k. and had acquired status of permanent residents of u.k. the child with her mother was supposed to return to u.k. but the mother cancelled her tickets and remained behind in india. the husband thereupon started procededings before the high court of justice, family division. u.k. praying for an order that the minor child be made a ward..........by chemical examiner found to contain 73.4 per cent ash and 32.8. per cent tobacco. from this central excise authorities deduced that the consignment originally warehoused was substituted by an equal quantity of adulterated inferior tobacco without payment of duty. a ntoice was consequently issued to the petitioner on 25th january, 1961 requiring him to show cause why the initial demand of an amount of rs. 3263.98 np. originally made under rule 160 of the central excise rules, 1944 be nto confirmed. the petitioner by letter dated 9th february, 1961, requested the assistant collector, central excise division, ambala, to make certain records available to him for inspection to enable him to file reply to the show cause ntoice. one of the items, the inspection whereof was sought,.....
Judgment:
ORDER

1. Sixty bags of tobacco dust weighing 79 maunds 20 seers were deposited by the petitioner in his private bounded warehouse vide warehouse entry No. 15/56 dated 23rd May, 1956. It appears that subsequently a representative sample was drawn from the said lto No. 15 and on analysis by Chemical Examiner found to contain 73.4 per cent ash and 32.8. per cent tobacco. From this Central Excise authorities deduced that the consignment originally warehoused was substituted by an equal quantity of adulterated inferior tobacco without payment of duty. A ntoice was consequently issued to the petitioner on 25th January, 1961 requiring him to show cause why the initial demand of an amount of Rs. 3263.98 nP. Originally made under rule 160 of the Central Excise Rules, 1944 be nto confirmed. The petitioner by letter dated 9th February, 1961, requested the Assistant Collector, Central Excise Division, Ambala, to make certain records available to him for inspection to enable him to file reply to the show cause ntoice. One of the items, the inspection whereof was sought, related to an application of the petitioner for destruction of the lto originally warehoused. The petitioner by, the same letter also asked the Assistant Collector to inform him about 'the basis and material on which the Department rely and which establishes the allegation of substitution against me'. A reply was sent by Shri Darshan Singh, Superintendent, dated 13/22nd March, 1961, in which it was dated:

'(i) In this connection please refer to an extract form the Chemical Examiner's test report already attached with the show cause ntoice, issued to you. Since on the Chemical analysis the percentage of tobacco in this case has been reported to be very low, the substitution of tobacco is confirmed.

(ii) It is for the licensee to prove as to how the percentage of tobacco has been found very low and what are the causes for such low percentage when the tobacco of the same quality has shown High percentage as compared with the tobacco lto in question.'

2. It was also pointed out in the said letter that no application for the destruction as referred to by the petitioner was available on the record of the office and it was nto known whether the petitioner had ever applied for the destruction of the tobacco. The petitioner replied to the said letter and while dealing with (ii) above stated-

'You seem to have compared the percentage of tobacco of the lto in the dispute with some toher tobacco of the same quality. The comparative report and test results have nto been communicated to and shown to me to enable me to meet the charge. The point of onus will be dealt with in a regular reply.'

3. Referring to the application for destruction the petitioner stated in the said letter:

'The proof of the application for destruction is supported by the remarks of the Inspector (Mr. Kakkar) dated 4-12-1958, on the relevant register. The sample collected and the said application must be on your record. Kindly make sure that the application is nto misplaced in your office and let me know.'

4. The petitioner also requested the superintendent , Central Excise, to supply him with one set of samples drawn in the year 1958. The said letter was replied to on 12th May, 1961, and the Superintendent, central Excise, required the petitioner to give him the number and date of his application for destruction. While referring to the petitioner's demand for one set of samples previously drawn the Superintendent wrtoe-

'As regards para 4 of your letter I do nto understand by demanding a copy of the sample drawn last. I may add that a sample in this case has been drawn from the tobacco quite recently and rather more authoritative than any samples if drawn previously.'

5. I may point out here that one of grievances of the petitioner is that if earlier samples and/or the reports of their analysis had been made available to the petitioner he would have been able to show that the contents of those samples were precisely the same as revealed by the Chemical Examiner's report thereby fully answering the revenue's case of substitution. By letter dated 22nd May, 1961, the petitioner requested for an opportunity to cross-examine the Chemical Examiner and also informed the Superintendent, Central Excise-

'The application for destruction was personally collected by Mr. K.M.Kakkar, the then Inspector, along with the stock cards on 4-12-1958 vide his endorsement of this fact on W.R.G. 2 Part I register.'

6. The superintendent, Central excise, did nto supply the petitioner with either the copy of the application for destruction or the orders thereon, if any, but instead proceeded to pass final orders without any reply of the petitioner to the show cause ntoice. By the said order dated 5th October, 1961, the superintendent came to the conclusion that the petitioner had contravened the provisions of rule 151 (c) and (d) of the Central Excise Rules, 1944, and thus rendered himself liable to penal action. He, thereforee, imposed on the petitioner penalty of Rs.100/- and also ordered confiscation of 79 maunds 20 seers of tobacco under the said rule. He, however, gave the petitioner an option to get the goods released on payment of a fine of Rs.75/- in lieu of confiscation in addition to the basic and additional excise duty at the appropriate rate. This duty comes to Rs.3263.98 nP. The petitioner filed an appeal which was rejected by the Collector of Central Excise, Delhi, by his order dated 17th April, 1962, on the ground that the petitioner had failed to deposit the Government was also rejected on 26th December, 1962, by a summary order. Aggrieved by the said orders, the petitioner filed the present writ petition.

(3) One of the objections taken by Mr.Shankar, the learned counsel for the respondents, is that the petitioner has failed to avail himself of the alternate remedy and the petition should, thereforee, be rejected on this short ground. His argument is that the petitioner should have deposited the amount of penalty and duty so that this appeal could be disposed of on merits. The learned counsel for the petitioner, on the toher hand, argues that the petitioner is a poor man and could nto afford to pay the amount with the result that the alternate remedy was nto adequate.

(4) Existence of an alternate remedy is only one of the factors to be taken into consideration by the Courts while deciding whether or nto they should exercise jurisdiction under Article 226 of Constitution. It is nto disputed that the existence of an alternate remedy does nto bar the jurisdiction of the Court to give relief. Having regard to the circumstances of this case, particularly the circumstance that the decision of the Superintendent. Central Excise, has been arrived at in violation of the demands of natural justice, I am nto inclined to entertain the preliminary objection on behalf of the respondents. It, thereforee, takes me to the question whether the ruled of natural justice have been violated? Mr. Yogeswar Dayal has emphasised the following circumstances in support of his plea-

(1) The non-supply of earlier samples about which I have already made a reference above.

(2) In spite of supply of full particulars regarding the application for destruction the authorities concerned proceeded to decide the matter in complete disregard of that application. If that application had been taken ntoe of, the authorities may have been convinced that the goods originally warehoused were nto marketable so that there was no purpose behind substitution by the petitioner.

It is nto disputed by Mr. Shankar that an application for destruction was made as alleged by the petitioner.

(3) In paragraph 3 of the letter dated 28th March, 1961, it had been specifically stated by the petitioner that the proof of the application for destruction was supported by the remarks of the Inspector dated 4th December, 1958, on the relevant register and the sample collected and said application must be on the record. Again, in paragraph 8 of the petition it is stated- 'It was also pointed out the application for destruction is supported by the remarks of the Inspector dated 4-12-58 on the relevant register and the sample collected must be on office record.'

7. The only reply to the said paragraph 8 in the reply affidavit is-

'with reference to para 8 of the petition I admit the receipt of the letter Annexure 'G' from the 'petitioner'.

8. Consequently, the allegation s of the petitioner set out in paragraph 8 of the petitioner stand admitted. There was no justification for withholding that sample or the remarks which would have shown the quality of the goods originally warehoused .

(4) The petitioner was denied opportunity , in spite of specific demand in this behalf, to cross examine the Chemical Examiner.

(5) That the Superintendent declined to permit the petitioner to cross-examine the Chemical Examiner is nto denied . In fact it is in terms stated in the order 'that the party's request for the cross-examination of the Chemical Examiner is irrelevant and cannto be permitted.' The grievance of the petitioner's learned counsel is that the entire case was founded on the report of the Chemical Examiner and if he had been examined the petitioner could elicit information regarding the basis of his report, when and in what condition was the sample received by him, for how many days, where and in what condition was it kept before the actual analysis and various toher matters having important bearing on the case.

9. One of the fundamental rules of natural justice is that the party affected should have full and true disclosure of the facts sought to be used against him. Such disclosure ;is essential for wise and just application of the authority of administrative agencies. The right of hearing is a right, no more and no less, to a ;hearing which is adequate to safeguard the right for which such prtoection is afforded. It must be a hearing in substance and nto form. If such a hearing has been denied, the administrative action is void. No doubt the administrative agencies in holding hearings in the exercise of quasi-judicial functions are nto held to strict conformity with judicial procedure required in Court of law, yet it must be hearing in substance confined to the points in issue. Under the requirements of a full hearing a party has the right to defend the right involved, by argument, proof and examination of witnesses where necessary. Then and then alone can in be said that the hearing has been a meaningful hearing. By denying the opportunity to examine the Chemical Examiner the right of adequate hearing has been denied and the impugned order, thereforee, deserves to be quashed. There has been antoher breach of ruled of natural justice. The respondents have admitted in their reply affidavit, as suggested by Mr. Yogeshwar Dayal, that an application for destruction was made that the Inspector made remarks on the said application and that the sample was collected at that time. If these material had been made available to the petitioner he may have been in a position to meet the charge by showing that the goods originally warehoused were nto different from the goods found at the time the last sample was drawn. I am also nto uninfluenced by the fact that the authorities have proceeded to dispose of the matter in disregard of the petitioners application for destruction. It is, in the circumstances, nto necessary to deal with toher alleged violation s on the part of the authorities. I, thereforee, allow the writ petition and quash the three impugned orders with no order as to costs. It will be however, open to the authority to deal with the matter afresh if they so choose.

10. Petition allowed.


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