Patna High Court
Shri Rajkumar Gupta @ Raj Kumar ... vs The Union Of India And Anr on 27 January, 2021
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.4098 of 2019
======================================================
Shri Rajkumar Gupta @ Raj Kumar Sultania @ Raju Sultania S/o Late
Sriniwas Sultania R/o Ghagha Gali, Patna City, P.S.- Khajekalan, Dist- Patna
... ... Petitioner/s
Versus
1. The Union of India through its Secretary, Ministry of Finance, New Delhi
2. The Commissioner, Central GST and Central Excise, Patna- I, Patna
... ... Respondent/s
======================================================
with
Civil Writ Jurisdiction Case No. 4374 of 2019
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Lallu Prasad S/o Late Heera Lal, Proprietor-M/s Shani Dev Enterprises, R/o
Pua Gali, Patna City, P.S. Chowk, Dist.- Patna.
... ... Petitioner/s
Versus
1. Union of India through its Secretary, Ministry of Finance, New Delhi.
2. The Commissioner, Central GST and Central Excise, Patna-I, Patna.
... ... Respondent/s
======================================================
with
Civil Writ Jurisdiction Case No. 4541 of 2019
======================================================
Santosh Jodhwani @ Santosh Kumar Jodhwani S/o Prithvi Raj M/s S.S.D.
and Company, R/o H.No. D-404, Taigore Nagar, Distt.- Raipur, Chhatisgarh
... ... Petitioner/s
Versus
1. Union of India through its Secretary, Ministry of Finance, New Delhi
2. The Commissioner Central GST and Central Excise, Patna-1, Patna
... ... Respondent/s
======================================================
with
Civil Writ Jurisdiction Case No. 4542 of 2019
======================================================
Anand Kumar Tejwani @ Anand Tejwani S/o Late Khubchand Tejwani
Proprietor- M/s Shankar Traders, R/o Ward No. 20, Sindhi Colony, Lal Bagh,
P.s.- Rajnandgaon, Distt.- Rajnandgaon, Chhatisgardh-491441
... ... Petitioner/s
Versus
1. Union of India through its Secretary, Ministry of Finance, New Delhi.
2. The Commissioner, Central GST and Central Excise, Patna-1, Patna
... ... Respondent/s
======================================================
Patna High Court CWJC No.4098 of 2019 dt.27-01-2021
2/18
with
Civil Writ Jurisdiction Case No. 4645 of 2019
======================================================
Ramesh Sultania S/o Late Phulchand Sultania, R/o Ghagha Gali, P.S.
Khajakalan, Dist.- Patna.
... ... Petitioner/s
Versus
1. The Union of India through its Secretary, Ministry of Finance, New Delhi.
2. The Commissioner, Central GST and Central Excise, Patna-I, Patna.
... ... Respondent/s
======================================================
with
Civil Writ Jurisdiction Case No. 8335 of 2019
======================================================
Deepak Singh, S/o Sri Ved Prakash Singh, R/o Noorpur, Bazar Samiti, P.S.-
Didarganj, Dist.-Patna
... ... Petitioner/s
Versus
1. Union of India through its Secretary Ministry of Finance, New Delhi.
2. The Commissioner, Central GST and Central Excise, Patna
... ... Respondent/s
======================================================
Appearance :
(In all the above petitions)
For the Petitioner/s : Mr. N.K.Agrawal, Sr. Advocate
Mr. Prakash Chandra Agrawal, Advocate
For the Respondent/s : Dr. K.N.Singh, Addl. S.G.
Mr. Rajesh Kumar Verma, AC to Addl. S.G.
======================================================
CORAM: HONOURABLE THE CHIEF JUSTICE
and
HONOURABLE MR. JUSTICE S. KUMAR
ORAL JUDGMENT
(Per: HONOURABLE THE CHIEF JUSTICE)
Date : 27-01-2021
Similar set of prayers and facts are made in all the writ
petitions, which are disposed of vide this common judgment.
For ready reference, we reproduce the prayers made by
the petitioners in the first petition, i.e. CWJC No.4098 of 2019
titled as Shri Raj Kumar Gupta @ Raj Kumar Sultania @ Raju
Patna High Court CWJC No.4098 of 2019 dt.27-01-2021
3/18
Sultania Versus The Union of India & anr.:
"(a) For holding the Order-In-Original No.
16/MP/Ayukt/2018 dated 05.10.2018 and the
Corrigendum being C. No. V(15)33-Adjn/2014/12895
dated 22.11.2018 issued by the Respondent No. 2 as
being illegal, invalid and unsustainable in the eye of
law.
(b) For issuance of a consequential writ or order
or direction upon the respondents to allow the
petitioner to grant an opportunity of cross-
examination of persons whose statements are relied
upon and also officers of the Department in terms of
the reply dated 23/24.06.2015 and 18.11.2016;
(c) For issuance of a direction to the respondents
to supply the entire documents/ evidences to the
petitioner upon which they relied upon and passed the
impugned order as against the petitioner;
(d) For grant of any other relief or reliefs to
which the petitioner is found entitled to in the facts
and circumstances of the case."
2. Having heard learned counsel for the parties, we
consider that preliminary objection raised by Dr. K.N.Singh,
learned Addl. S.G., about maintainability of the writ petitions, in
the teeth of statutory provisions of availability of an equally
alternative remedy stipulated under the Statute (Appeal and
Revision, Chapter VI-A of the Central Excise Act, 1944), needs
to be sustained.
3. We do not find the impugned order dated 05.10.2018
Patna High Court CWJC No.4098 of 2019 dt.27-01-2021
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passed by the assessing authority, under the provisions of the
Central Excise Act, 1944 (hereinafter referred to as the 'Act'), to
be ex facie or patently perverse or passed in total/ utter violation
of the principle of natural justice, warranting interference by this
Court, more so when the mixed question of fact and law are
involved.
4. It is not that the Statutory Authority has not acted in
accordance with the provisions of the enactment in question;
defiance of fundamental principles of judicial procedure; resorted
to invoke the provisions already repealed; or the procedure
adopted and the order is in total violation of the principles of
natural justice.
5. In State of U.P. V. Sudhir Kumar Singh; 2020
SCC online page 847, the Apex Court has culled out certain
guiding principles for entertaining a petition under Article 226 of
the Constitution of India alleging breach of principles of natural
justice. They are:- (1)Natural justice is a flexible tool in the hands
of the judiciary to reach out in fit cases to remedy injustice. The
breach of the audi alteram partem rule cannot by itself, without
more, lead to the conclusion that prejudice is thereby caused.
(2)Where procedural and/or substantive provisions of law
embody the principles of natural justice, their infraction per se
Patna High Court CWJC No.4098 of 2019 dt.27-01-2021
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does not lead to invalidity of the orders passed. Here again,
prejudice must be caused to the litigant, except in the case of a
mandatory provision of law which is conceived not only in
individual interest, but also in public interest. (3)No prejudice is
caused to the person complaining of the breach of natural justice
where such person does not dispute the case against him or it.
This can happen by reason of estoppel, acquiescence, waiver and
by way of non-challenge or non-denial or admission of facts, in
cases in which the Court finds on facts that no real prejudice can
therefore be said to have been caused to the person complaining
of the breach of natural justice. (4) In cases where facts can be
stated to be admitted or indisputable, and only one conclusion is
possible, the Court does not pass futile orders of setting aside or
remand when there is, in fact, no prejudice caused. This
conclusion must be drawn by the Court on an appraisal of the
facts of a case, and not by the authority who denies natural justice
to a person. (5)The "prejudice" exception must be more than a
mere apprehension or even a reasonable suspicion of a litigant. It
should exist as a matter of fact, or be based upon a definite
inference of likelihood of prejudice flowing from the non-
observance of natural justice. (Para-39).
6. The grounds of challenge, limited in nature, urged
Patna High Court CWJC No.4098 of 2019 dt.27-01-2021
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before us, are two fold:- (a) the petitioners are not in a capacity,
on account of financial hardship, to meet the condition of
prerequisite deposit of the amount, statutorily required for
preferring an appeal ; (b) the order violates the principles of
natural justice, since witnesses supporting the revenue were not
allowed to be cross-examined during the course of adjudicatory
proceedings.
7. In support thereof, Shri N.K.Agrawal, learned senior
counsel for the petitioners, places reliance upon the decisions
rendered by the Apex Court in Lakshman Exports Ltd. v.
Collector of Central Excise; (2005) 10 SCC 634, Rajiv Arora
vs. Union of India & Ors.; AIR 2009 SC 1100; Andaman
Timber Industries vs. Commissioner of C.Ex., Kolkata-II;
2015(324) E.L.T. 641(S.C.) and Arya Abhushan Bhandar v.
Union of India & Ors.; 2002 (143) E.L.T. 25 (S.C.).
8. On the other hand, Dr. K.N.Singh, learned Addl.
S.G., has placed reliance upon the Apex Court's various decisions
in Kanungo & Co. Vs. The Collector of Customs & Ors.;
(1973) 2 SCC 438, Union of India v. Alok Kumar; (2010) 5
SCC 349, Authorized Officer, State Bank of Travancore &
Anr. V. Mathew K.C.; (2018) 3 SCC 85, and upon a decision
rendered by a co-ordinate Bench of this Court in ALCATEL
Patna High Court CWJC No.4098 of 2019 dt.27-01-2021
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Modi Net Work System Limited vs. The State of Bihar &
Ors.; 2000(2) PLJR 295.
9. It is a settled principle of law that normally a writ
court ought not to entertain a petition under Article 226 of India's
Constitution in the teeth of availability of an alternative statutory
remedy unless, of course, it vitally infringes upon the
fundamental rights of the petitioner. What is the parameter
warranting the Court to entertain a petition, more specifically
concerning the fiscal Statute, is very well laid down by the Apex
Court in CIT v. Chhabil Dass Agarwal; (2014) 1 SCC 603.
10 Emphatically, the Court has propounded that no
interference, under Article 226 of India's Constitution, is
warranted unless, of course, the order passed is in "total"
violation of the principles of natural justice and, given the law
propounded in Kanaiyalal Lalchand Sachdev & Ors. v. State
of Maharashtra; (2011) 2 SCC 782.
11. In our opinion, the petitioners have failed to
establish how the order passed is in "total" violation of the
principles of natural justice. What prejudice, much less serious in
nature, stands caused on account of non-examination of the
witnesses, is also not born out from the material on record or
demonstrated before us.
Patna High Court CWJC No.4098 of 2019 dt.27-01-2021
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12. We may not be understood to have expressed any
opinion on the merits of the same, but only highlight the issue,
limited for determining the problems urged before us.
13. The assessing authority has found the petitioners
and concerns associated with them, dealing in the product i.e.
production/trade of cigarettes, which are excisable under the Act.
On 13th December 2013, a raid was conducted, inter alia, at the
petitioner's premises, and got recovered huge stocks of more than
two crores of cigarette sticks. The petitioners were arrested, and
their statement recorded while in judicial custody. During the
search and seizure operations, statements of other witnesses were
also recorded and the material, inculpatory in nature, recovered
from the conscious possession of the petitioners/associated
persons and premises. The search was conducted at different
places in the States of Chhatisgarh, Jharkhand and Bihar.
14. With the completion of search and seizure
operations, petitioners and associated persons were issued notices
for carrying out the adjudicatory proceedings under the Central
Excise Act's provisions, 1944 read with Central Excise Rules,
2002. While declining the petitioner's request for cross-
examining the witnesses, the adjudicatory authority ultimately
passed the impugned order dated 05.10.2018 and corrigendum
Patna High Court CWJC No.4098 of 2019 dt.27-01-2021
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order dated 22.11.2018. The relevant portion of impugned orders
reads as under:-
"105 In view of the aforesaid discussion and
findings. I pass the following orders:-
ORDER
(i) I confirm the demand of Central Excise Duty
including AFD, NCCD, Ed. Cess and Secondary and
Higher Ed. Cess .....
... ......
(iv) I order to confiscate 16,54,26l sticks of filter
cigarettes of 'Sunils Two'&'India 10' brands valued at
Rs.32,38,409/- which were seized on 30.05.2014 from
the unregistered cigarette manufacturing factory of
Shri Raju Sultania, running in the name and style of
M/s Shani Dev Enterprises at Vill.-Mohiuddinpur
(Vill.-Narma), Fatuha Danlayava Road, Nai Sadak,
Distt.-Patna under Rule 25 of the Central Excise Rules
2002. However, I give an option to pay Redemption
fine in lieu of confiscation which shall be 50% of the
value of the goods. The release of such goods on
payment of redemption fine shall be done only after
the goods are found to be fit for human consumption
and meets the other legal requirement relating to
health and safety.
.... ... ...
(vii) I further order to confiscate the unaccounted
quantity of 2,52,10,000 sticks of non filter and filter
cigarettes of various brands valued at Rs.
4,20,68,760/-which had been seized on 30.05.2014
from the undeclared godown of Shri Raju Sultanja
situated at Didarganj, Near Godrej Warehouse,
Patna High Court CWJC No.4098 of 2019 dt.27-01-2021
Fatuha, Dist Patna under Rule 25 of the Central
Excise Rules, 2002. However, I give an option to pay
Redemption fine in lieu of confiscation which shall be
50% of the value of the goods. The release of such
goods on payment of redemption fine shall be done
only after the goods are found to be fit for human
consumption and meets the other legal requirement
relating to health and safety.
... ... ....
(ix) I order to confiscate the unaccounted quantity
of 4,79,500 sticks of filter cigarettes of various brands
valued at Rs.9,35,025/-seized on 30.05.2014 the
undeclared godown of Shri Raju Sultanja situated at
Jharkhand Tola, Village- Daniyava, Dist-Patna under
Rule 25 of the Central Excise Rules, 2002.
However, I give an option to pay Redemption fine
in lieu of confiscation which shall be 50% of the value
of the goods. The release of such goods on payment of
redemption fine shall be done only after the goods are
found to be fit for human consumption and meets the
other legal requirement relating to health and safety.
...... ...
(xi) I also order to confiscate the unaccounted
quantity of 3,24,000 sticks of filter cigarettes of India
10', brand valued at Rs.6,48,000/-, illicitly
manufactured and clandestinely cleared without
payment of Central Excise duty by Shri Raju Sultania
and were seized on 18.11.2014 from the business
premised of Shri Anand Tejwani, Proprietor of M/s
Shankar Traders, G.E.Road, Opp.- Kikabhai Complex,
Near Jalaram Sweets, Rajnandgaon (C.G.) under Rule
25 of the Central Excise Rules, 2002. However, give
Patna High Court CWJC No.4098 of 2019 dt.27-01-2021
an option to pay Redemption fine in lieu of
confiscation which shall be 50% of the value of the
goods. The release of such goods on payment of
redemption fine shall be done only after the goods are
found to be fit for human consumption and meets the
other legal requirement relating to health and safety.
(Emphasis supplied)
15. We find the adjudicatory authority, to consider the
requirement of cross-examination of the witnesses, which is
reproduced as under:
"Defence reply furnished by the noticee no. 1 is
limited to cross examination of the entire investigation
team, Panch witnesses, Police team and timing of the
investigation and search. But on the facts no noticee has
uttered any plausible and believable reply. Once Show
cause notice has been issued onus is on the noticee to
reply. The presumptions and believe of the noticee no. 1
cannot be taken as evidence to counter the evidence
adduced by DGCEI. Further, the notice also mention
documentary evidence proving the leviability of Central
Excise Duty and intent to evade payment of Duty does
the objections raised by the noticee no. 1 is not tenable
as it has not been substantiated by the noticee no. 1 as to
why cross examination of the witnesses are needed. If
cross examination relates with time of search and time of
statement given by the noticee no. 1, then it has no
relevance."
( Emphasis supplied)
16. What is important is that the petitioners have not
Patna High Court CWJC No.4098 of 2019 dt.27-01-2021
denied the recovery of vast sticks of cigarettes from different
premises during search and seizure operations. Before use, it is
also not disputed that the petitioners deal with such products. As
such, we need not delve any further into the merits of the order
because we are convinced that the petitioner has not made out a
case for interference in the present petition and all pleas can
conveniently be taken in an appeal.
17. In Kanungo (supra), in fact, we find the issue to
have been squarely dealt with by Hon'ble the Apex Court in
relation to Sea Customs Act, 1878 dealing with similar issue and
for benefit; we extract the observations made as under:
"12. We may first deal with the question of breach of
natural justice. On the material on record, in our opinion,
there has been no such breach. In the show-cause notice
issued on August 21, 1961, all the material on which the
Customs Authorities have relied was set out and it was
then for the appellant to give a suitable explanation. The
complaint of the appellant now is that all the persons
from whom enquiries were alleged to have been made
by the authorities should have been produced to enable it
to cross-examine them. In our opinion, the principles of
natural justice do not require that in matters like this the
persons who have given information should be examined
in the presence of the appellant or should be allowed to
be cross-examined by them on the statements made
before the Customs Authorities. Accordingly we hold
that there is no force in the third contention of the
appellant."
18. The said decision has been followed in Telstar
Travels (P) Ltd. v. Enforcement Directorate, (2013) 9 SCC
549.
Patna High Court CWJC No.4098 of 2019 dt.27-01-2021
19. To similar effect, though in a different Statute is
another decision rendered in Alok Kumar (supra).
20. Here, we may also take note of the observations
made by the Apex Court in Mathew K.C.'s case (supra), which
reads as under:-
"10. In Satyawati Tondon; (2010) 8 SCC 110, the
High Court had restrained further proceedings under
Section 13(4) of the Act. Upon a detailed
consideration of the statutory scheme under the
SARFAESI Act, the availability of remedy to the
aggrieved under Section 17 before the Tribunal and
the appellate remedy under Section 18 before the
Appellate Tribunal, the object and purpose of the
legislation, it was observed that a writ petition ought
not to be entertained in view of the alternate statutory
remedy available holding: (SCC pp. 123 & 128, paras
43 & 55).
43. Unfortunately, the High Court
overlooked the settled law that the High Court
will ordinarily not entertain a petition under
Article 226 of the Constitution if an effective
remedy is available to the aggrieved person and
that this Rule applies with greater rigour in
matters involving recovery of taxes, cess, fees,
other types of public money and the dues of
banks and other financial institutions. In our
view, while dealing with the petitions involving
challenge to the action taken for recovery of the
public dues, etc. the High Court must keep in
mind that the legislation enacted by Parliament
Patna High Court CWJC No.4098 of 2019 dt.27-01-2021
and State Legislatures for recovery of such dues
are a code unto themselves inasmuch as they not
only contain comprehensive procedure for
recovery of the dues but also envisage
constitution of quasi-judicial bodies for redressal
of the grievance of any aggrieved person.
Therefore, in all such cases, the High Court must
insist that before availing remedy under Article
226 of the Constitution, a person must exhaust
the remedies available under the relevant
Statute.
55. It is a matter of serious concern that
despite repeated pronouncement of this Court,
the High Courts continue to ignore the
availability of statutory remedies under the DRT
Act and the SARFAESI Act and exercise
jurisdiction under Article 226 for passing orders
which have serious adverse impact on the right
of banks and other financial institutions to
recover their dues. We hope and trust that in
future the High Courts will exercise their
discretion in such matters with greater caution,
care and Circumspection."
21. We notice that the Apex Court, in Lakshman
Exports Limited (supra), was itself convinced of violation of
principles of natural justice resulting into loss suffered by the
petitioner therein. Such opinion perhaps emanated from the
difference of opinion amongst the Bench members passing the
impugned orders. The Apex Court intervened and remanded the
Patna High Court CWJC No.4098 of 2019 dt.27-01-2021
matter for adjudication.
22. Similar is the position in Arya Abhushan
Bhandar (supra).
23. In Andaman Timber Industries (supra), the Apex
Court interfered finding the appellate authority not to have dealt
with the plea of prejudice caused to the petitioner on account of
non-examination of the material witnesses relied upon by the
petitioner. Also, Rajiv Arora's case (supra) does not deal with
the issue of prejudice caused to the petitioner but nonetheless,
what is to be considered is whether material prejudice, if any,
stands caused to the petitioner.
24. Well, in our considered view, all these questions of
fact and law can undoubtedly be considered and dealt with by
appellate authority. We notice that the proceedings stood
procrastinated, be it for whatever reason. The Revenue attributes
the same upon the petitioners and vice versa. Well, we are not
expressing any opinion thereupon, save and except, the
adjudicatory process ought to be completed at the earliest, which
was not done. The assessing authority took more than five years
in determining evasion of a massive amount of tax.
25. We find that the Act itself provides a complete
mechanism for deciding all disputes and questions legal or
Patna High Court CWJC No.4098 of 2019 dt.27-01-2021
factual. The appellate authority can expeditiously decide all
issues, including the grievances raised herein.
26. This Court in ALCATEL Modi Net Work System
Limited (supra) itself has observed as under:-
"5. In so far as his plea is concerned, the
petitioner has filed a petition in the High Court's
prerogative with jurisdiction. An objection has been
taken in the counter affidavit, already, that if the
assessment order is illegal, there is a clear cut
recourse to an alternate remedy by way of an appeal
under Section 45 of the Act available to the petitioner.
On this proposition, it was vehemently argued that
once the petition had been accepted at the admission
stage, the respondents are barred from raising a plea
of alternate remedy and challenging the merits of the
contention raised in the petition and the assessment
order does not hold and stands negatived as the
jurisdiction is of the authority under the Central Sales
Tax Act, 1956. The Court is not inclined to accept this
suggestion that the respondents may not raise the plea
of alternate remedy. Such a plea may be taken at any
time as it is a plea of jurisdiction in itself which goes
to the root of the matter.
6. Besides, at the High Court for a matter to be
heard leave has to be sought unless it is an appeal by
right. On a certiorari action, the High Court has to
certify a case, good for hearing; there are no short cuts
to admission.
7. It is well known that a writ jurisdiction of the
High Court is not available in generality when the
Patna High Court CWJC No.4098 of 2019 dt.27-01-2021
Statute itself has provided an alternate remedy of an
appeal. Maybe, the provision which be the alternate
remedy from the business point of view may be
irksome and the present assessee may be required to
deposit an amount, 20 per cent, before filing the
appeal. But, the legislature has structured the Statute,
thus. The petitioner may take recourse to an appeal
under Section 45 of the Act and may contend
whatever he contents before appellate authority. The
petitioner is relegated to take recourse to an alternate
remedy under Section 45 of the Act."
27. Hence, financial incapacity cannot be a ground for
maintaining the present petitions.
28. As such, on both counts, as urged by Shri
N.K.Agrawal, learned senior counsel, before us, we see no reason
to interfere in the matter; thus, we dispose of the present petitions
with the following directions:-
(a) Petitioners have been pursuing the remedy before
this Court, hence if petitioners take recourse to
remedy provided under the Act, within a period of
four weeks, the issue of limitation shall not be
allowed to come in the way of it's adjudication on
merits;
(b) Such proceedings shall expeditiously be decided on
merits, per law, preferably within a period of six
Patna High Court CWJC No.4098 of 2019 dt.27-01-2021
months from the date of initiation;
(c) both parties shall fully co-operate and not take any
unnecessary adjournment;
(d) petitioners' request for waiver of the amount of pre-
deposit, if admissible under law, shall be considered;
(e) the appeal and the application, shall be considered
uninfluenced by any of the observations made by
this Court.
29. The petitions stand disposed of in the terms above.
30. Interlocutory application(s), if any, shall stand
disposed of.
(Sanjay Karol, CJ)
( S. Kumar, J)
sujit/-
AFR/NAFR AFR
CAV DATE
Uploading Date 02.02.2021
Transmission Date
