1981 (3) TMI 157 - HC - Central Excise

Summary

Issues:

Challenge to legality of government orders on yarn packing regulations under Cotton Textiles (Central) Order, 1948. Allegation of non-application of mind by authorities in passing orders for exemption.

Analysis:

Issue 1: Legality of Government Orders on Yarn Packing Regulations
The petitioners challenged the legality of government orders dated October 5, 1979, and December 12, 1979, regarding yarn packing regulations under the Cotton Textiles (Central) Order, 1948. The notifications mandated producers to pack yarn in hank form for civil consumption. The petitioners applied for exemption citing various reasons, including financial constraints and lack of infrastructure. The contention raised was that the government exceeded its powers by compelling producers to pack yarn in hank form. The learned counsel argued that the Textile Commissioner lacked competence to issue such notifications. The High Court found merit in this argument and concluded that the impugned orders suffered from non-application of mind. It was observed that the authorities did not consider all relevant material before passing the orders.

Issue 2: Non-Application of Mind by Authorities
The High Court noted that the impugned orders lacked proper consideration of the material presented by the petitioners. The respondents acknowledged that additional material was available, which was not considered during the initial decision-making process. In light of this, the Court decided to quash the orders and directed the Senior Enforcement Officer to reevaluate the petitioners' application for exemption. The Court emphasized the importance of a fresh assessment based on all available material, both old and new. The Senior Enforcement Officer was instructed to provide a reasoned decision after considering the complete set of evidence.

Additional Observations:
The High Court clarified that the first contention regarding the competence of the Textile Commissioner was not addressed due to the orders being set aside on other grounds. The Court left other contentions open for future consideration. It was also noted that the petitioners filed Affidavits-in-rejoinder at a late stage, but as the matter was remanded for fresh consideration, no further submissions were allowed at that time. The issue of the authority of the Senior Enforcement Officer to pass the initial order was briefly discussed, with the Court expressing confidence in the officer's ability to comply with the directions provided in the judgment.

In conclusion, the High Court allowed the petition, set aside the impugned orders, and directed a fresh assessment by the Senior Enforcement Officer within a specified timeline. No costs were awarded in the circumstances of the case.