M/S Sant Enterprises vs State And Others
2021 Latest Caselaw 1678 j&K

                                                                 Sr. Nos. 6



              COURT OF JAMMU & KASHMIR AND LADAKH
                           AT JAMMU

CJ Court

Case: OWP No. 2186 of 2018

M/s Sant Enterprises                                       .....Appellant/Petitioner(s)

                                 Through :- Sh. Parag Sharma, Advocate

                           v/s

State and others                                                    .....Respondent(s)
                                 Through :- Sh. D. C. Raina, Advocate General with
                                            Sh. F. A. Natnoo, AAG
       CORAM:
       HON'BLE THE CHIEF JUSTICE
       HON'BLE MR. JUSTICE JAVED IQBAL WANI, JUDGE

                                      ORDER

Per-Javed Iqbal Wani

1. In the instant petition, petitioner on the foundation of the case set

up implores the following reliefs:-

              "i)  Certiorari   quashing    Circular   No.          1085-
              89/DEC/LKP dated       15.10.2018      issued            by
              Respondent No. 3.

              ii)   Quashing order No. DEC/LKP/1100-05 dated
              17.10.2018 issued by Respondent No. 4.

iii) Writ of prohibition directing the Respondents 2,3 & 4 not to interfere in the business of the petitioner herein at Village Pandori, District Kathua.

2. The background facts those emerge from the petition under the

cover of which the petitioner claims aforesaid reliefs are that the Government

of India in order to boost the investors‟ confidence issued notification dated

14.06.2002, for providing incentives to the industrial development in the State

of Jammu and Kashmir resulting into issuance of an industrial policy vide

Govt. Order No. 94-IND of 2004 dated 31.03.2004 inviting industrial units to

invest in the State of Jammu and Kashmir.

3. It is being stated that the petitioner being Small Scale Industry

applied pursuant to the aforesaid Government Order and established a stone

crusher in village Pandori, District, Kathua in the year 2014, after obtaining

necessary registration and no objection certificates from the department of

Geology & Mining as also the State Pollution Control Board.

4. It is being stated that in line with the Industrial Policy, the

respondent No. 1 issued SRO 22 dated 31.03.2004 providing therein toll

exemptions to new local/small/medium and large scale industrial units. 100 %

exports exemption is stated to have been given to the said units and that the

petitioner herein is stated to have been availing the said benefit of exemption of

toll tax including basic toll as well. A toll post in village Nagri 8 km away

from the village Pandori, where the petitioner‟s unit is established is stated to

have been established by the government.

5. It is next stated that respondent Nos. 2 and 3 in the year 2015

started harassing the petitioner on the ground that the petitioner is liable to pay

toll tax, in that, the provisions of SRO 22 had expired in the month of March,

2015, whereupon the petitioner is stated to have preferred OWP No. 1472 of

2016, contending therein that the petitioner is entitled to toll exemption in view

of the Industrial Policy and in terms of SRO 22. The said petition is stated to

have been dismissed on 02.02.2018 on a statement made by the then Advocate

General that the life of SRO 22 has not been extended beyond 31.03.2015 and,

as such, the petitioner is not entitled to any exemption and is liable to pay toll

tax according to the of Jammu and Kashmir Levy of Toll Act, 1995 (for brevity

„the Act‟).

6. It is being stated that aggrieved of the dismissal of the petition

(supra) the petitioner preferred an appeal being LPAOW No. 21/2018 before

the Division Bench on the ground that the life of the SRO 22 had been infact

extended beyond 31.03.2015 till 31.03.2018 and that the Advocate General has

made a wrong statement before the Writ Court. The said appeal is stated to

have been allowed holding that "if the appellants are importing raw material,

which falls in the limitation of exemption under the exemption instructions,

they would be entitled for the same, while agreeing with the Advocate General

that in no case the appellants should be permitted to by-pass the toll post set up

at Village Nagri District Kathua."

7. It is being next stated that the respondent No. 3 issued a Circular

NO.1085-89/DEC/LKP dated 15.10.2018, wherein the decision passed in the

writ petition being OWP No. 1472 of 2016 (supra) providing therein that all the

stone crushers‟ vehicles shall pass through Toll Post Gandial and Toll Post,

Nagri and that the stone crushers which are registered as SSI units may claim

toll exemption in accordance with the provisions of the Act.

8. It is further stated that respondent No. 4 passed the impugned

order No.DEC/LKP/1100-05 dated 17.10.2018 under Sections 3 and 8 of the

Act and the rules made thereunder in respect of a vehicle bearing No.PB07AS-

6582, while seizing the same at Village Pandori on 16.10.2018 alleging that the

same was moving towards Punjab without payment of toll in violation of the

directions of the Hon‟ble High Court and consequently, imposing a penalty of

Rs. 4,68,120/-including the basic toll, toll of goods and fine. The said order

dated 17.10.2018 is being impugned in the instant petition and is assailed inter

alia on the following grounds:-

―(a) That it is settled law by the Hon'ble Supreme Court of India that the authorities which are exercising the quasi-judicial authorities have a duty cast on them to act in judicial and independent manner. If their judgment is controlled by the directions given by the higher authorities against whom an appeal is to be preferred then that judgment cannot be said to be an independent and filing of an appeal would become an empty formality. In the present case, the same principle of law is applied as the order passed by respondent No 4 has been passed at the instance of Respondent No. 3 who has issued a Circular on 15.10.2018 and while exercising the power under Section 3$ 8 by respondent No. 4 he has categorically mentioned in the order that the Circular which was issued by respondent NO. 3 is the show cause notice under Section 13(2) of J&K Levy of Toll Tax Act. Thus, the order passed by the Respondent No. 3 is not an order in the eyes of law as he has been influenced by his superior officer who has already passed a Circular. Thus, this action of respondent No. 4 of passing impugned order under Section 3 & 8 on 17.10.2018 is against law and there is no requirement under law to file an appeal before the Deputy Commissioner Excise as it will be a futile exercise. This action has a severe impact of misusing of their official position and amounts to harassment to the petitioner herein. Copy of the J&K Toll Tax Act, 1995 is enclosed and marked as Annexure- J with the writ petition.

(b) That under the Levy of Toll Tax Act, 1995 the remedy available to the petitioner was to file an appeal under Section 14 against the order of respondent No. 4 and the appeal shall lie before the Deputy Commissioner Excise as the impugned order of Respondent No. 4 which has been passed under Section 3 and 8 has been passed at the instructions/circulars issued by the Deputy Commissioner Excise and in view of the settled law by the Hon'ble Supreme Court that in these particulars circumstances if higher authorities have passed an order against whom an appeal lies

then there is no need of filing an appeal and that order is not an order in the eyes of law. In view of this, both the orders i.e. Circular dated 15.10.2018 and the order issued under Section 3 & 8 are nullity in the eyes of law.

(c) That while reading the order under Section 3 & 8 which mentions about the Circular issued on 15.10.2018, it clearly says that the said Circular was served upon the petitioner herein and vehicle bearing Registration No. PB07AS-6582. At the later stage the respondent No. 4 says that the said particular vehicle bearing registration No. PB07AS-6582 laden with 4200 Kgs of Bajri consigned by M/s Sant Enterprises Village Pandori, Kathua to consignee M/s Kapoor Trading Co. Punjab was intercepted by the Excise team at Village Pandori on 16.10.2018. This is a contradictory statement and how this order has been passed clearly shows the mind of respondent No. 4 as is evident from the order itself which is totally false and illegal, as how the Circular dated 15.10.2018 could have been served on the driver of the Truck No. PB07AS-6582 prior to the incident when the said truck was seized on 16.10.2018. This clearly shows that the impugned order is influenced by the Circular issued by the Deputy Commissioner and thus, both the orders i.e. Circular dated 15.10.2018 and order dated 17.10.2018 requires to be quashed.‖

9. Respondents though having entered appearance, yet have not

chosen to file objections despite last opportunity granted by this Court.

Heard learned counsel for the parties and perused the record.

10. Learned counsel for the petitioner while making his submissions

reiterated the contentions raised and grounds urged in the petition and would

further contend that the impugned order has been passed by the respondents

without affording an opportunity of being heard to the petitioner in terms of

Section 13 of the Act.

11. Learned Advocate General would oppose the writ petition while

resisting and controverting the contentions raised and grounds urged by the

learned counsel for the petitioners while further contending that the petition

raises serious disputed and complicated question of fact which cannot be

adjudicated upon in the extra ordinary jurisdiction. The learned Advocate

General further sought dismissal of the petition primarily on a maiden ground

that the writ petition is not maintainable in view of the availability of an

alternate efficacious remedy of appeal provided under Section 14 of the Act.

12. Before adverting to the rival submissions of the appearing

counsel for the parties, it would be advantageous to refer to Sections 13 and 14

of the Act, being germane and relevant herein which reads as under:-

13. Offences by whom punishable.--(1) The officer incharge of the toll-gate or station may, by order, impose fine on any person guilty of an offence under section 8. (2) Before passing an order under sub-section (1) such officer shall give the person in the default an opportunity of being heard. (3) The fine imposed under sub-section (1) may, on a requisition being made in this behalf by the officer inflicting fine, be realised by a Magistrate having jurisdiction as if it had been inflicted by himself.

(4) Copy of the order passed under sub-section (1) shall be sent to the Exise Commissioner if officer incharge is a Deputy Excise Commissioner and to the Deputy Excise Commissioner if the officer is other than a Deputy Excise Commissioner.

14. Appeal and revision.--(1) Any person aggrieved by an order passed under sub-section (1) of section 13 may, within a period of three months from the date of such order, prefer an appeal before the Deputy Excise Commissioner (executive) of the Province where such order has been passed by an officer below the rank of Deputy Excise Commissioner and in any other case, before Excise Commissioner.

(2) Every order passed in appeal under this section shall, subject to the powers of revision conferred by sub-sections (3) and (4), be final.

(3) The Excise Commissioner may, at any time, call for and examine the record of any order passed by the Deputy Commissioner under sub-section (1), for the purpose of satisfying himself as to the legality of such order and may pass such order in reference thereto, as he may deem fit.

(4) The Government may, at any time, call for and examine the record of any order passed by the Excise Commissioner under sub-section (1) for the purpose of satisfying itself as to the legality of such order and may pass such order in reference thereto, as he may deem fit :

Provided that no order under sub-section (3) or sub-section (4)

which is prejudicial to any person, shall be passed without giving

such person an opportunity of being heard.‖

13. Admittedly, the petitioner has been held liable to pay an amount

of Rs. 4, 68,120/- under Sections 3 and 8 of the Act in terms of the impugned

order and indisputably the respondents have provided therein the impugned

order that a show cause notice as prescribed under section 13 (2) of the Act in

the shape of Circular No. 1085-89/DEC/LKP dated 15.10.2018, has been

issued and served to different stone crusher, units, owners/driver of the

vehicles including the petitioner concern by respondent No. 3, with a direction

to strictly adhere the directions of the Hon‟ble High Court

14. A plain reading of section 13 (2) (supra) manifestly provide that

before passing an order under sub-section (1), the person in default has to be

mandatorily provided an opportunity of being heard. This right to be heard

precisely would mean that the party must know the case he has to meet and the

party must have reasonable opportunity to present his case. The requirement of

a show cause notice flows directly from the principle that no party should be

condemned unheard. A shows cause notice is more than a notice. What should

be a proper a show cause notice and its purpose has been dealt with by the

Apex Court in case titled as "Gorkha Security Services Vs. Government (NCT

of Delhi) and others" reported in 2014 (9) SCC 105, where under in para 21

following is noticed:

The Central issue, however, pertains to the requirement of stating the action which is proposed to be taken. The fundamental purpose behind the serving of Show Cause Notice is to make the noticee understand the precise case set up against him which he has to meet. This would require the statement of imputations detailing out the alleged breaches and defaults he has committed, so that he gets an opportunity to rebut the same. Another requirement, according to us, is the nature of action which is proposed to be taken for such a breach. That should also be stated so that the noticee is able to point out that proposed action is not warranted in the given case, even if the defaults/ breaches complained of are not satisfactorily explained. When it comes to black listing, this requirement becomes all the more imperative, having regard to the fact that it is harshest possible action.‖

15. On the concept and doctrine of principles of natural justice, here a

reference to the judgment of the Apex Court passed in Dharampal Satayampal

Limited vs. Deputy Commissioner of Central, reported in 2015 (8) SCC 519,

would be relevant and germane herein, wherein in paras 21, 24 and 28,

following has been provided:-

―21. In Common Law, the concept and doctrine of natural justice, particularly which is made applicable in the decision making by judicial and quasi- judicial bodies, has assumed different connotation. It is developed with this fundamental in mind that those whose duty is to decide, must act judicially. They must deal with the question referred both without bias and they must given to each of the parties to adequately present the case made. It is

perceived that the practice of aforesaid attributes in mind only would lead to doing justice. Since these attributes are treated as natural or fundamental, it is known as 'natural justice'. The principles of natural justice developed over a period of time and which is still in vogue and valid even today were: (i) rule against bias, i.e. nemo iudex in causa sua; and (ii) opportunity of being heard to the concerned party, i.e. audi alteram partem. These are known as principles of natural justice. To these principles a third principle is added, which is of recent origin. It is duty to give reasons in support of decision, namely, passing of a 'reasoned order'.

24. The principles have sound jurisprudential basis. Since the function of the judicial and quasi-judicial authorities is to secure justice with fairness, these principles provide great humanising factor intended to invest law with fairness to secure justice and to prevent miscarriage of justice. The principles are extended even to those who have to take administrative decision and who are not necessarily discharging judicial or quasi-judicial functions. They are a kind of code of fair administrative procedure. In this context, procedure is not a matter of secondary importance as it is only by procedural fairness shown in the decision making that decision becomes acceptable. In its proper sense, thus, natural justice would mean the natural sense of what is right and wrong.

28. It is on the aforesaid jurisprudential premise that the fundamental principles of natural justice, including audi alteram partem, have developed. It is for this reason that the courts have consistently insisted that such procedural fairness has to be adhered to before a decision is made and infraction thereof has led to the quashing of decisions taken. In many statutes, provisions are made ensuring that a notice is given to a person against whom an order is likely to be passed before a decision is made, but there may be instances where though an authority is vested with the powers to pass such orders, which affect the liberty or property of an individual but the statute may not contain

a provision for prior hearing. But what is important to be noted is that the applicability of principles of natural justice is not dependent upon any statutory provision. The principle has to be mandatorily applied irrespective of the fact as to whether there is any such statutory provision or not.‖

16. Having regard to the aforesaid legal position, the Circular dated

15.10.2018 claimed to be a show cause notice by the respondents served upon

the petitioner as reflected in the impugned order cannot by any sense of

imagination said to be a show cause notice, more so in view of the fact that the

said Circular/alleged show cause notice is issued not for the alleged violation

for which the impugned order has been issued, so much so, admittedly no

opportunity of hearing has been provided to the petitioner by the respondents

under and in terms of Section 13 (2), before passing of the impugned order.

Thus, non-serving of a proper notice and non-providing of an opportunity of

hearing to the petitioner, cannot said to be substantial adherence of procedural

fairness by the respondents before issuance of impugned order.

17. In view of the above, preliminary objections raised by the learned

Advocate General qua the maintainability of the writ petition that there is an

alternate efficacious remedy pales into insignificance, in that, law is no more

res integra and that there has been long line of decisions of the Apex Court that

the existence of an adequate alternative remedy is no bar to a relief under

Article 226 where there has been a violation of principle of natural justice. A

reference in this regard to the judgment of the Apex Court passed Pop Corn

Entertainment vs. City Industrial Development Corporation reported in 2007

(9) SCC 593, would be relevant herein.

18. For all what has been observed, considered and analyzed

hereinabove, the instant petition succeeds and is, accordingly, allowed, as a

sequel to which, the impugned order No. DEC/LKP/1100-05 17.10.2018 is

quashed. However, it is made clear that the respondents shall be free to initiate

an action against the petitioner herein in accordance with law for alleged

violation of the provisions of the Act as contained in the impugned order dated

17.10.2018, if desired.

19. Writ petition is disposed of.

                          (JAVED IQBAL WANI)             (PANKAJ MITHAL)
                                     JUDGE                CHIEF JUSTICE
JAMMU
14.12.2021
Bir