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Govindbhai Kalidas Patel (Deceased by His Heirs Kantilal and ors.) Vs. Union of India (Uoi) and ors. - Court Judgment

LegalCrystal Citation
SubjectExcise
CourtGujarat High Court
Decided On
Judge
Reported in(1966)7GLR703
AppellantGovindbhai Kalidas Patel (Deceased by His Heirs Kantilal and ors.)
RespondentUnion of India (Uoi) and ors.
Cases ReferredUnion of India v. T.R. Varma
Excerpt:
.....(2) no panchanama was prepared at the time when the sample of tobacco was sent to the deputy chief chemist for his opinion and in the absence of the panchnama there was nothing to identify the sample sent to the deputy chief chemist as the sample taken out from the tobacco transported by the petitioner and no reliance could, therefore, be placed on the opinion of the deputy chief chemist and the impugned orders which were based entirely on the opinion of the deputy chief chemist were accordingly bad and liable to be set aside. now the impugned orders were made in proceedings for alleged contravention of rule 32 of the central excise rules, 1944, and the proceedings were, therefore, clearly quasi-judicial proceedings and this was indeed not disputed on behalf of the respondents. 5...........the charge proved against the petitioner and he, therefore, sent a sample of tobacco to the deputy chief chemist at bombay for his opinion. the deputy chief chemist gave an opinion that the tabacco in the sample was composed mainly of crushed leaf tobacco with some stems and the approximate percentage of leafy portion was 73, 9) and it did not consist of 44% chopadia jarda patti mixed with 56% stalk kandi. the opinion given by the deputy chief chemist was communicated by the assistant collector of central excise to the petitioner by his letter dated 1st september 1960 and by the said letter the petitioner was called upon to state within seven days from the receipt of the letter whether he had anything to say in connection with the said opinion. the petitioner on receiving the letter of.....
Judgment:

P.N. Bhagwati, J.

1. This is a petition under Article 226 of the Constitution for a writ of certiorari or an appropriate direction, order or writ for quashing and setting aside two orders passed by the Excise authorities, one dated 24th December 1960 passed by the Assistant Collector of Central Excise, Baroda, and the other dated 1st August 1961 passed in appeal by the Collector of Central Excise, Baroda. The circumstances under which, these orders came to be passed were as follows.

2. The petitioner carries on business as a Commission Agent in tobacco in village Dabhasar, Taluka Thasara, District Kaira, and holds a licence bearing No. L. 2. No. 45 under the Central Excise and Salt Act, 1944, for carrying on the said business. On or about 26th May 1959, a TPI Permit No. 126788 dated 26th May 1959 was issued by the Thasara M.O.R. authorizing the petitioner to transport 17 borries of tobacco weighing 18 Bengali Maunds 13 1/2 seers from his licensed warehouse at Dabhasar to one Mahadeo Nathoba in Poona. The tobacco which was authorized to be transported under the permit was tobacco containing a mixture of Chopadia Jarda Patti and Stalk Kandi in the proportion of 40: 60, Chopadia Jarda Patti being 40% and Stalk Kandi being 60%. The petitioner acting in pursuance of the authority conferred under the permit transported 17 Borries of tobacco weighing 18 Bengali Maunds 13 1/2 seers from his licensed warehouse to Mahadeo Nathoba at Poona on or about 26th May 1959. It appears that the Excise authorities in Dabhasar entertained a suspicion that the tobacco actually transported by the petitioner was different from the one that was authorized to be transported under the permit and they, therefore, sent an intimation to the Superin-tendent, Central Excise, Poona to detain the consignment and to send representative samples of tobacco taken out from the consignment. The Superintendent, Central Excise, Poona, accordingly detained the consignment when it reached Poona and took out samples of tobacco from the consignment and sent them to the excise authorities in Baroda. The Deputy Superintendent, Central Excise, Baroda, II Circle, got the samples examined by Panchas in Baroda on 3rd August 1959 and the Panchas opined that the samples contained pure bidi pattiand did not contain any Stalk Kandi. The samples were thereafter sent to the Superintendent, Central Excise, Umreth, and this Officer once again got them examined by Panchas in Dabhasar on 5th October 1959 in the presence of the petitioner. These Panchas were of the view that the samples contained mixture of tobacco in flakes of a slightly larger grain than Rava form of tobacco and of Stalks in the like grain but they were not in a position to express any opinion in regard to the percentage of the two varieties, namely, leafy portion and Stalk Kandi. On this material the Assistant Collector of Central Excise issued a show cause notice dated 12th March 1960 to the petitioner calling upon the petitioner to show cause why a penalty should not be imposed on him for contravention of Rules 40 and 32 of the Central Excise Rules, 1944, and the tobacco in respect of which the offence appeared to have been committed should not be confiscated under those Rules. Though the show cause notice was in respect of the alleged contravention of both Rules 40 and 32 of the Central Excise Rules, 1944, the order passed by the Assistant Collector of Central Excise was confined only to the contravention of Rule 32 and, therefore, it is not necessary to state any facts on which the alleged contravention of Rule 40 was based in the show cause notice. On receipt of the show cause notice, the petitioner addressed two letters to the Assistant Collector of Central Excise, one dated 11th April 1960 and the other dated 16th April 1960, showing cause against the action proposed to be taken against him. It appears that the Assistant Collector of Central Excise felt that on the material then on record, which material consisted of divergent opinions expressed by the Panchas in Baroda and Dabhasar, it might not be possible to hold the charge proved against the petitioner and he, therefore, sent a sample of tobacco to the Deputy Chief Chemist at Bombay for his opinion. The Deputy Chief Chemist gave an opinion that the tabacco in the sample was composed mainly of crushed leaf tobacco with some stems and the approximate percentage of leafy portion was 73, 9) and it did not consist of 44% Chopadia Jarda Patti mixed with 56% Stalk Kandi. The opinion given by the Deputy Chief Chemist was communicated by the Assistant Collector of Central Excise to the petitioner by his letter dated 1st September 1960 and by the said letter the petitioner was called upon to state within seven days from the receipt of the letter whether he had anything to say in connection with the said opinion. The petitioner on receiving the letter of the Assistant Collector of Central Excise containing the opinion of the Deputy Chief Chemist, addressed a letter dated 13th September 1960 expressing his inability to under stand how the contents of tobacco mixture could be determined by chemical analysis of the sample and pointing out that the only way in which this could be done was by analysing the contents taking into account only the physical qualities. The petitioner accordingly declined to accept the opinion of the Deputy Chief Chemist. The petitioner was thereafter given a hearing by the Assistant Collector of Central Excise on 3rd December 1960 and at the hearing which took place on 3rd December 1960, the Assistant Collector of Central Excise stated to the petitioner that the opinion was given by the Deputy Chief Chemist after carrying out physical and chemical tests and he was a technical expert competent to give his opinion in such matters and that the opinion could, therefore, be acted upon in the inquiry. The petitioner thereupon asked for further time to submit a reply and on such time being granted, the petitioner gave a reply by his letter dated 6th December 1960. By this letter the petitioner inter alia demanded an opportunity to cross-examine the Deputy Chief Chemist and submitted that no reliance should be placed on his opinion unless the opinion was tested by cross-examination. The Assistant Collector of Central Excise, however, did not afford any opportunity to the petitioner to cross-examine the Deputy Chief Chemist and passed an order dated 24th December 1960 holding that the transportation of 17 Borries of tobacco weighing 18 Bengali Maunds and 13 1/2 seers by the petitioner from his licensed warehouse at Dabhasar to Mahadeo Nathoba at Poona was not covered by TPI Permit No. 126788 dated 26th May 1959 since the tobacco so transported, did not consist of Chopadia Jarda Patti mixed with Stalk Kandi in the ratio of 40% & 60% and that the petitioner was, therefore, guilty of contravention of Rule 32 of the Central Excise Rules, 1944. By the said order the Assistant Collector of Central Excise directed that under the circumstances the tobacco should be confiscated but the petitioner might redeem it on payment of fine of Rs. 250/- plus the duty leviable on the tobacco and also imposed a penalty of Rs. 200/- on the petitioner. The petitioner thereupon preferred an appeal to the Collector of Central Excise, but the Collector of Central Excise by his order dated 1st August 1961 dismissed the appeal. The petitioner accordingly preferred the present petition challenging the validity of the appellate order made by the Collector of Central Excise as also the validity of the original order made by the Assistant Collector of Central Excise.

3. There were three grounds on which the validity of the orders of the Assistant Collector of Central Excise and the Collector of Central Excise was challenged by Mr. Patel, learned advocate appearing on behalf of the petitioner and they were as follows:

(1) The Excise Officers while making a search for the tobacco in Poona and taking samples in the course of such search ware bound to follow the procedure prescribed in Sections 102 and 103 of the Code of Criminal Procedure by reason of the provision enacted in Section 18 of the Central Excise and Salt Act, 1944, and since such procedure was not followed and the samples were taken without the presence of the Panchas, the samples could not be relied on for the purpose of establishing the charge against the petitioner and the impugned orders based on the evidence furnished by the samples were, therefore, invalid.

(2) No panchanama was prepared at the time when the sample of tobacco was sent to the Deputy Chief Chemist for his opinion and in the absence of the panchnama there was nothing to identify the sample sent to the Deputy Chief Chemist as the sample taken out from the tobacco transported by the petitioner and no reliance could, therefore, be placed on the opinion of the Deputy Chief Chemist and the impugned orders which were based entirely on the opinion of the Deputy Chief Chemist were accordingly bad and liable to be set aside.

(3) The impugned orders were vitiated by reason of non-compliance with the principles of natural justice since no opportunity was given to the petitioner to cross-examine the Deputy Chief Chemist even though such opportunity was demanded by the petitioner.

Of these three grounds, the first two relate to matters of appreciation of evidence which would be within the exclusive jurisdiction of the Assistant Collector of Central Excise and the Collector of Central Excise and it would not be competent to us in the exercise of our extraordinary jurisdiction to interfere with the decision of these officers on such matters which are entrusted by the Legislature to their determination. We must not forget that we are not sitting as a Court of appeal against the decision of these officers. Ours is a limited jurisdiction to restrain the abuse of quasi-judicial proceedings and the sole issue with which we are concerned is whether the decision of these officers, be it right or wrong, was without or in excess of jurisdiction or was arrived at in disregard of the principles of natural justice. These two grounds cannot, therefore, legitimately form the subject matter of complaint before us in the exercise of our jurisdiction under Article 225 of the Constitution.

4. Turning to the third ground, the argument under this ground was that the order of the Assistant Collector of Central Excise was contrary to the principles of natural justice inasmuch as it was based on the opinion of the Deputy Chief Chemist without an opportunity being given to the petitioner to cross-examine the Deputy Chief Chemist even though such opportunity was demanded by the petitioner and consequently not only was the order of the Assistant Collector of Central Excise null and void but also the appellate order passed by the Collector of Central Excise was a nullity. Now the impugned orders were made in proceedings for alleged contravention of Rule 32 of the Central Excise Rules, 1944, and the proceedings were, therefore, clearly quasi-judicial proceedings and this was indeed not disputed on behalf of the respondents. There is, therefore, no doubt that the Assistant Collector of Central Excise and the Collector of Central Excise were bound to observe the principles of natural justice in making the impugned orders. The contention of the respondents, however, was that the content of the principles of natural justice was not so wide as to entitle the petitioner to cross-examine the Deputy Chief Chemist and there was, therefore, no violation of the principles of natural justice involved in the denial of the right claimed by the petitioner to cross-examine the Deputy Chief Chemist. The question which, therefore, arises for consideration is as to whether on the facts and circumstances of the case the principles of natural justice required that the petitioner should have an opportunity to cross-examine the Deputy Chief Chemist and whether in the absence of such cross-examination reliance could be placed on the opinion of the Deputy Chief Chemist for the purpose of holding the charge against the petitioner proved.

5. The question as to what are the rights accorded by the principles of natural justice in a particular case is always a question of some difficulty and the subject though well worn is one replete with impediments to orderly generalization. These rights have been defined in varying language in a large number of cases covering a wide field. We do not propose to review these authorities at length but would observe that the question whether the requirements of natural justice have been met by the procedure adopted in a particular case must depend to a great extent on the facts and circumstances of the case in point. The requirements of natural justice are not such as can be reduced to any formula inclusive or exclusive which can have universal application to every kind of inquiry, for a good deal may depend on the subject matter, the nature of the inquiry itself, the nature and constitution of the tribunal or authority which holds the inquiry and the rules under which the inquiry is held. As observed by Tucker, L.J., in Russell v. Duke of Norfolk (1949) 1 All E.R. 109:

There are, in my view, no words which are of universal application to every kind of inquiry and every kind of domestic tribunal. The requirements of natural justice must depend on the circumstances of the case, the nature of the inquiry, the rules under which the tribunal is acting, the subject-matter that is being dealt with, and so forth.

These observations show that there is no well-defined procedure required to be followed by the rules of natural justice which, is uniformly applicable to all statutory tribunals, but it is bound to vary from tribunal to tribunal according to the nature of the tribunal, the scope of the inquiry before it and the statutory rules of procedure laid down by the law for carrying out the objectives of the statute. But even so, there are certain basic principles relating to the requirements of natural justice which must be followed in all cases by those who hold any judicial inquiry unless of course the statute in express terms or by necessary implication absolves them from the obligation to do. We had occasion to consider these principles in Gandalal v. State (1963) IV G.L.R. 326, where after analysing the various authorities bearing on the question, we summarized these principles in the following terms:

Very broadly expressed, the first principle is that the party to the controversy must know with reasonable certainty the nature of the case against him. Secondly, he should be given a fair and proper opportunity to meet the case against him, and to state his own case. According to this principle he should have a fair and proper opportunity to make any relevant statement which he may desire to bring forward and to correct or controvert any relevant statement prejudicial to his view. Lastly the tribunal must conduct the inquiry and reach its conclusion in good faith.

The procedure to be followed by the tribunal in the observance of these principles need not, as we have pointed out above, conform to any recognized methods of judicial procedure nor need the procedure of every such tribunal be the same. Whilst giving effect to these principles the procedure is bound to vary from tribunal to tribunal depending in each case upon the subject, the nature of the inquiry, the nature and constitution of the tribunal and the statutory rules of procedure laid down by the law under which the inquiry is held. The procedure which may be found to be, in compliance with the principles of natural justice in one kind of inquiry may be found deficient in observance of the principles of natural justice in another kind of inquiry. As observed by Lord Atkin in General Medical Council v. Spackman (1943) A.C. 627:

Some analogy exists, no doubt, between the various procedures of this and other not strictly judicial bodies, but, I cannot think that the procedure which may be Very just in deciding whether to close a school or an insanitary house is necessarily right in deciding a charge of infamous conduct against a professional man.

We must, therefore, examine the present, question before us in the light of various factors such as the subject matter, the nature of the inquiry, the constitution of the tribunal and the requirements of law as laid down in the statute and the rules framed under the statute.

6. Now, as pointed out above, one of the essential elements of natural justice is that the person against whom the inquiry is being held should have a fair and proper opportunity to correct or controvert any relevant statement prejudicial to his view. The opinion of the Deputy Chief Chemist clearly contained a statement prejudicial to the case of the petitioner and that statement was clearly and indisputably relevant since if true, it showed that the tobacco transported by the petitioner did not contain the requisite mixture of Chopadia Jarda Patti and Stalk Kandis. The petitioner was therefore, entitled to a fair and proper opportunity to controvert this statement contained in the opinion of the Deputy Chief Chemist. The petitioner demanded an opportunity to cross-examine the Deputy Chief Chemist in order to be able to controvert the opinion of the Deputy Chief Chemist by showing by cross-examination that the opinion was not correct or in any event was not such as could be relied on for the purpose of holding the charge against the petitioner established. The Assistant Collector of Central Excise denied this opportunity to the petitioner and the contention on behalf of the respondents was that the Assistant Collector of Central Excise was within his rights in doing so. According to the respondents the only opportunity the petitioner was entitled to have was to controvert the opinion of the Deputy Chief Chemist and this opportunity was given to the petitioner by supplying him with the opinion of the Deputy Chief Chemist. The petitioner could, it was submitted, controvert the opinion of the Deputy Chief Chemist by making submissions or even by leading evidence of another expert if he so liked but he was not entitled to demand that the Deputy Chief Chemist should be summoned for cross-examination. This contention of the respondents is, in our opinion, not well-founded. The petitioner, we think, was entitled to insist that before reliance could be placed on the opinion of the Deputy Chief Chemist, he should be given an opportunity to cross-examine the Deputy Chief Chemist in order to controvert the opinion given by the Deputy Chief Chemist which was prejudicial to his view and our reasons for saying so are as follows.

7. Turning first to the Central Excise and Salt Act, 1944, and the rules made thereunder, we find that there is nothing in the statute and the rules which prescribes any particular procedure to be followed by the Assistant Collector of Central Excise in holding an inquiry for the purpose of determining whether an offence for breach of the provisions of the Act and the Rules is established against the person charged for such offence. We will, therefore, have to see whether there is anything in the subject, the nature of the inquiry, and the nature of constitution of the tribunal which required that before the opinion of the Deputy Chief Chemist could be relied on by the Assistant Collector of Central Excise for the purpose, of holding the charge against the petitioner established, the petitioner, should be given an opportunity to cross-examine the Deputy Chief Chemist when such opportunity was demanded by him. Now it must be remembered, that the inquiry which was being held by the Assistant Collector of Central Excise was an inquiry of a quasi criminal nature inasmuch as the inquiry was for the purpose of adjudicating whether the petitioner had contravened Rule 32 of the Central Excise Rules, 1944, and a penalty of confiscation and fine should be imposed on him for such contravention. The result of the inquiry if adverse to the petitioner might lead to confiscation of the tobacco of the petitioner and imposition of penalty on him. The opinion of the Deputy Chief Chemist constituted the most important piece of evidence against the petitioner in the inquiry and the original decision of the Assistant Collector of Central Excise and the appellate decision of the Collector of Central Excise ultimately rested on the opinion of the Deputy Chief Chemist. Now according to the principles of natural justice the petitioner was entitled to a fair and proper opportunity to controvert the opinion of the Deputy Chief Chemist and this opportunity clearly extended to a right to cross-examine the Deputy Chief Chemist. The right of cross-examination is one of the most effective weapons for testing the veracity of a witness and eliciting truth and when the Assistant Collector of Central Excise was holding a quasi criminal inquiry and reliance was sought to be placed in such inquiry on the opinion of the Deputy Chief Chemist, a fair and proper opportunity to controvert the opinion of the Deputy Chief Chemist clearly demanded that the petitioner should have a right to cross-examine the Deputy Chief Chemist. The petitioner could not effectively controvert the opinion of the Deputy Chief Chemist unless he was given an opportunity to cross-examine the Deputy Chief Chemist for it is only by cross-examination that he could show that the Deputy Chief Chemist was not an expert in so far as the determination of the contents of the mixture was concerned or that the Deputy Chief Chemist had not applied proper tests for determining the percentage of Chopadia Jarda Patti and Stalk Kandis in the mixture or that the opinion of the Deputy Chief Chemist was in any event unreliable and not worthy of acceptance. It may also be pointed out that what was conveyed to the petitioner by the Assistant Collector of Central Excise was merely the opinion of the Deputy Chief Chemist and the reasons in support of that opinion were not given to the petitioner. We do not know whether any reasons in support of the opinion were actually given by the Deputy Chief Chemist but even if they were given, they were not conveyed to the petitioner. The result was that the petitioner had only the opinion of the Deputy Chief Chemist and he did not know what were the reasons in support of that opinion. It is difficult to see under these circumstances how the petitioner could possibly be said to have a fair and proper opportunity to controvert the opinion of the Deputy Chief Chemist except by cross-examining him. The petitioner could by probing into the reasons for the opinion in the course of cross-examination question the validity of the opinion and this right was denied to him by the Assistant Collector of Central Excise. We are, therefore, of the view that the principles of natural justice required that the petitioner should have been given an opportunity to cross-examine the Deputy Chief Chemist when he did not accept the opinion of the Deputy Chief Chemist and demanded that the Deputy Chief Chemist be summoned for cross-examination.

8. This view which we are taking on principle is clearly supported by the decision of the Judicial Committee of the Privy Council in University of Ceylon v. Fernando (1960) 1 W.L.R. 223. In that case the respondent, a student of the University of Ceylon, had sat for the final examination for the degree of Bachelor of Science and after the examination was concluded, an allegation was made to the Vice-Chancellor that the respondent had had prior knowledge of the content of a passage in the German language which had to be translated in one of the papers. A commission of inquiry consisting of the Vice-Chancellor and two others, acting under Clause 8 of the statute of the University, held an inquiry for the purpose of determining whether the respondent had prior knowledge of the content of any paper. In the course of this inquiry evidence was given by Miss Balasingham, who had made the original allegation resulting in the institution of the inquiry. The respondent did not request the commission of inquiry to permit him to cross-examine Miss Balasingham and there was accordingly no cross-examination of Miss Balasingham by the respondent. The commission of inquiry found principally on the evidence of Miss Balasingham that the allegation against the respondent was substantiated and they accordingly reported their finding to the Board of Residence and Discipline and the result was that the respondent was suspended indefinitely from all University examinations. The respondent thereupon filed an action for a declaration that the finding of the commission of inquiry and the decision of the Board of Residence and Discipline were null and void. The respondent alleged that the finding of the commission of inquiry was contrary to the principles of natural justice on several grounds, one of which was that he had given no opportunity to cross-examine Miss Balasingham. Dealing with this ground Lord Jenkins delivering the opinion of the Privy Council stated:

But it remains to consider whether in the course they took the interviews must be held to have fallen short of the requirements of natural justice on the ground that the plaintiff was given no opportunity of questioning Miss Balasingham. She was the one essential witness against the plaintiff, and the charge in the end resolved itself into a matter of her word against his. In Their Lordships' view this might have been a more formidable objection if the plaintiff had asked to be allowed to question Miss Balasiagham and his request had been refused. But he never made any such request. There is no ground for supposing that if the plaintiff had made such a request it would not have been granted. It therefore appears to their Lordships that the only complaint which could be made against the commission on this score was that they failed to volunteer the suggestion that the plaintiff might wish to question Miss Balasingham, or, in other words, to tender her unasked for cross-examination by the plaintiff. Their Lordships cannot regard this omission, or a fortiori the like omission with respect to other witnesses, as sufficient to invalidate the proceedings of the commission as failing to comply with the requirements of natural justice in the circumstances of the present case.

9. These observations of the Privy Council clearly suggest that if the respondent had asked to be allowed to cross-examine Miss Balasingham and his request had been refused, the Privy Council would have been inclined to hold that there was violation of the requirements of the principles of natural justice. But quite apart from this we have also a decision of the Supreme Court in Union of India v. T.R. Varma : (1958)IILLJ259SC where we find it clearly laid down that the rules of natural justice require inter alia that a party against whom an inquiry is being held should be given an opportunity of cross-examining the witness examined by the other side. We have, therefore, no doubt that on the facts and circumstances of the present case the principles of natural justice required that the petitioner should have a right to cross-examine the Deputy Chief Chemist in order to controvert the opinion of the Deputy Chief Chemist and since this right though demanded was denied to the petitioner, there was clearely non-compliance with the rules of natural justice. The decision of the Assistant Collector of Central Excise was therefore, null and void and the decision of the Collector of Central Excise in appeal against such null and void decision was also a nullity.

10. We, therefore, allow the petition and make the rule absolute by issuing a writ of certiorari quashing and setting aside the order of the Assistant Collector of Central Excise dated 24th December 1960 and the order of the Collector of Central Excise dated 1st August 1961. The respondents will pay the costs of the petition to the petitioner.


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