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Judgment
B.S. Chauhan, J.—This writ petition has been filed for restraining the respondent No. 2 from proceeding with the adjudication of the show cause notices unless the relied upon documents are made available to the petitioner.
The facts and circumstances giving rise to this case are that the officers of the Central Excise Department conducted a raid on the business premises of the petitioner and seized a large number of documents, i.e., 692 files and about 1.5 lacs other documents. In spite of best efforts of the petitioner, petitioner could not get the original documents or copies thereof in spite of the fact that in order to obtain/procure the photo copies of the said documents petitioner offered to instal two photo copy machines in the office of the respondent authorities. At one hand the documents are not being supplied to the petitioner. On the other hand, the authorities are in haste to proceed against the petitioner by passing the assessment order. Hence this petition.
Shri Bharat Ji Agarwal, learned Senior Counsel appearing for the petitioner has submitted that in spite of the fact that a sufficient time of more than six years has passed the documents seized by the respondents which are relied upon and non relied upon documents are not being made available to the petitioner. Petitioner is suffering in running its day to day business and it cannot render proper assistance to the Revenue Department for proper assessment. Action of the respondents is arbitrary being unreasonable, therefore, petition deserves to be allowed.
Undoubtedly the Revenue Department has a power to seize the documents in order to find out the undeclared income, but all the documents so seized may not be relevant for its purpose. There may be some documents which can be relied upon while making the assessment or issuing charge-sheet or notices etc., the others may be totally irrelevant for the said purposes. There could be no justification for the Revenue Department for retaining the documents not likely to be relied upon. On the other hand, the documents which are likely to be retained may be retained by the Revenue Department but the copies thereof must be made available to the assessee so that he can render proper assistance for assessment, or file reply to the show cause/charge-sheet etc. and if assessment order has been passed for preparing the memo of appeal in effective manner.
A Circular No. 42/88-CX.6 dated 24.05.1988 issued by the Revenue Department provides that after seizing the documents immediate efforts must be made to segregate the documents which are purported to be relied upon in framing/establishing the charges. From the remaining documents/record, the documents not likely to be relied upon must be returned to the party concerned. Such a course if adopted by the Revenue Department would substantially reduce the efforts by the parties for inspection of the records. Similar Circulars No. 48/88-CX.6 dated 10.06.1988 and 207/09/2006-CX.6 dated 08.09.2006 have been issued.
The instructions issued by the Department are necessary and valid because of internal complicities of fiscal adjustment of diverse elements, and thus binding upon the Department. (Vide Kundan Sugar Mills Vs. Commissioner of Income Tax, ; Anantapur Textiles Ltd. Vs. Commissioner of Income Tax, ; K.P. Varghese Vs. Income Tax Officer, Ernakulam and Another, ; M/s. South India Viscose Ltd. Vs. Commissioner of Inocme Tax, ; and Collector of Central Excise, Patna Vs. Usha Martin Industries, etc., .
Such a course is necessary for the reason that the circulars of the Board being in the nature of contempornea ex positio furnish legitimate aid in the construction of the relevant provisions. In Keshavji Ravji & Co. v. Commissioner of Income Tax and Ors. (1992) 2 SCC 231, the Hon''ble Supreme Court held that the circulars of the Board are statutory in character and may provide proper guidance for construction of the statutory provisions.
A similar view has been reiterated by the Apex Court in Commissioner of Income Tax, Bangalore Vs. Vasudeo V. Dempo, and Kerala Financial Corporation Vs. Commissioner of Income Tax,
A Constitution Bench of Hon''ble Supreme Court in Collector of Central Excise, Vadodra Vs. Dhiren Chemical Industries, dealing with a similar issue, held that if there are circulars issued by the Central Board of Excise and Customs providing for a particular interpretation the same are binding on the Revenue.
Similar view has been reiterated in Collector of Central Excise, Vadodara Vs. Dhiren Chemical Industries,
Thus, in view of the aforesaid settled legal proposition circulars issued by the Revenue Department are binding and in view thereof the respondents ought to have returned the documents not likely to be relied upon.
In Tribhuvandas Bhimji Zaveri and Another Vs. Collector of Central Excise, , the Hon''ble Supreme Court held that non return of the documents by the authorities may severely prejudice the right of the party to offer the proper explanation and to that extent the principles of natural justice may stand violated. In absence of supply of the copies of the documents a party may be deprived of from leading proper evidence and he may not be able to give proper answer of the case against him by adducing positive evidence in support of his own case together with the right to contradict all other allegations. Deciding a case without furnishing proper documents by the Revenue ignoring the essentials of justice, may render the order a nullity. (Vide Union of India and another Vs. Ex Constable Amrik Singh, .
The case of the petitioner stands fortified by various judgments of the Court, namely, General Spares Industries Ltd. Vs. Union of India, ; Roshan Lal Agarwal Vs. Union of India (UOI), Sunder Ispat Limited Vs. Commissioner of Cus. and C. Ex., Hyderabad, ; Premium Intertrade Pvt. Ltd. Vs. Union of India (UOI), ; Johnson and Johnson Ltd. Vs. Deputy Chief Controller of Imports and Exports and Another, ; Kellogg India Private Limited. and Madhukar Patil Vs. Union of India (UOI), Asst. Commission, Central Excise and Customs and Commissioner of Central Excise, ; and Silicon Graphics System (INDIA) Private Limited Vs. Union of India (UOI),
In view of the above, it is an obligation on the part of the Revenue to return the non relied upon documents at the earliest. Relied upon documents or copies thereof are also to be furnished so that the party may plead its case effectively.
In view of the above, we dispose of the petition directing the respondent Nos. 2 and 3, the learned Commissioner and the Additional Commissioner (Adj.), respectively, to return in original the non-relied upon documents, and to furnish the copies of the relied upon documents to the petitioner. Petition had already installed the two photo copy machines in the office of the respondents. One machine has got the electric connection, however, the second machine is not having the electric connection.
Thus, the Department of Revenue may provide the electric connection so far as the second photo copy machine is concerned, and they may be permitted to have the photo copies of all the relied upon documents. The exercise may be completed within the period of three months from the date of filing a certified copy of this order before him.
The Department of Revenue may re-consider to modify the letter dated 8th February, 2007 to complete the adjudication considering the fact that the petitioner may not be in a position to render the proper assistance for assessment without having copies of the relied upon documents and extend the period.
Dr. Ashok Nigam, learned Additional Solicitor General of India appeared for the respondents with Shri Dinesh Kumar Soni, Advocate.