Mds Switch Gear Pvt. Ltd. vs Union of India

Pendse, Acting C.J.

By this petition filed under Article 226 of the Constitution, the petitioners are challenging show-cause notice dated September 3, 1986 issued by Superintendent, Central Excise, Bombay and the copy of which is annexed as Exh. ''F'' to the petition. The show-cause notice sets out that excise duty amounting to Rs. 4,08,763.21 is recoverable from the petitioners for period from March 1986. The petitioners are called upon to show-cause why such duty should not be recovered u/s 11A of the Central Excises and Salt Act, 1944. The petitioners have approached this Court by filing the present petition under Article 226 of the Constitution to challenge the legality of the said show-cause notice.

Shri Shroff, learned counsel appearing on behalf of the petitioners, submitted that the exercise of quasi-judicial power in issuing impugned show-cause notice is based upon extraneous consideration, inasmuch as the show-cause notice is issued on the basis of some clarification issued by the Board clarifying as to under what heading the switches manufactured by the petitioners are covered. The learned counsel submitted that it is well settled that exercise of quasi-judicial power on the strength of such cause of action is wholly illegal. On behalf of the respondents, R. K. Mehra, Assistant Collector has filed return sworn on September 20, 1994 and in Paragraph 18 of the affidavit, it is unequivocally admitted that the Board had issued clarification in respect of item manufactured by the petitioners falling under particular heading. It is not in dispute that the show-cause notice was issued subsequent to the clarification. In these circumstances, show-cause notice cannot be sustained and is required to be struck down.

Before parting with the judgment, it is necessary to refer to the manner in which the affidavit is filed on behalf of the respondents. The affidavit sworn by R. K. Mehra, Assistant Collector refers to copy the letter dated June 11, 1986 in paragraph 11 and further it states that the copy is annexed to the affidavit at Exh. ''A''. In paragraph 18 of the affidavit, reference is made to the clarification issued by the Board and it is stated that the copy of the clarification is annexed as Exh. ''B''. Both these documents are not annexed to the affidavit and we are surprised how such an affidavit was prepared, sworn and then tendered in Court. The copies of the exhibits are also not furnished to the counsel for the petitioners. It is very sad state of affair and we hope that such carelessness will not be repeated.

Accordingly, petition succeeds and Rule is made absolute in terms of prayer (a). The respondents shall pay the costs of the petition. The amount deposited by the respondents under interim orders to be refunded to the Respondents alongwith interest accrued thereon.