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2016 (4) TMI 932 - CALCUTTA HIGH COURTMaintainability - Whether the writ petition is maintainable - Offices of the writ petitioner is situated in Orissa and major part of the cause of action arose outside the jurisdiction of the Calcutta High Court - Held that:- the Additional Bench of the Commission at Kolkata, under the statutory rules, having jurisdiction over the entire eastern zone, which includes the State of Orissa, after hearing, had passed the order. The appellant had participated in the proceedings. Hence, keeping Article 226(2) of the Constitution in mind, as a part of the cause of action had arisen within the territorial limits of the Calcutta High Court, the learned Single Judge was justified in holding that the writ petition is maintainable. Whether the learned Single Judge was justified in setting aside the order of penalty imposed by the Commission holding it as severable and legally unsustainable - Held that:- in view of the provisions in section 32E(1) of the Act, the respondents, “to have the case settled,” and “before adjudication” , instead of filing a reply to the notice and having the case adjudicated, filed applications before the Commission for settlement. So the respondents opted for settlement before the Commission, - a statutory forum created for the said purpose. Thus having opted for settlement and having accepted the amount of excise duty payable by them, the respondents cannot now turn back and challenge the penalty imposed by filing a writ petition because it would mean arguing the case on merit which under Section 33 of the Act can only be dealt with and decided by an adjudicating authority. Had there been adjudication and had duty liability been established, under section 11AC the respondents might have faced prosecution from which the Commission had granted immunity. Whether the order directing imposition of penalty is severable or not - Held that:- since section 32K speaks of “immunity from prosecution for any offence under this Act and also either wholly or in part from the imposition of any penalty and fine” (emphasis supplied), the order of penalty cannot be severed from the order of prosecution. It is a composite order. The words “and also” make the order of prosecution and penalty inseverable. Since an order passed by the Commission is an agreement in a statutory form, the respondents, having been granted immunity from prosecution, cannot challenge the imposition of penalty only. Under the statute the order of penalty is not segregable. As the order of penalty and prosecution cannot be segregated, either the applicant accepts the order in its entirety or the settlement fails. Admittedly a package, an order passed by the Commission, should be read as a whole. It is to be noted that the learned Judge even while holding penalty being segregable and unsustainable held “It is true that ordinarily the settlement comes as a package and composite tax statement is either to be accepted or rejected. The settlement tax cannot be accepted only in part.” Whether payment made pursuant to an order passed by the Commission can be conditional - Held that:- After order was passed by the Settlement Commission, the respondents had deposited the penalty, without prejudice to their rights available under the law. In our view since the respondents had filed applications for settlement admitting the allegations in the notice and having accepted immunity from prosecution and as the order is inseparable, such reservation of rights is unacceptable. It is against the scheme of the Act which shall make section 32K(2) otiose. In our view payment made pursuant to an order passed by the Commission cannot be conditional as it goes against the basic principles of settlement. Levy of penalty imposed by the Commission is set aside and direction for refund of penalty amount paid and/or realised from the writ petitioners, is also set aside and quashed. - Decided partly in favour of appellant
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