TMI Blog2010 (12) TMI 997X X X X Extracts X X X X X X X X Extracts X X X X ..... ot only to the constitutional validity of Section 154 of the Act, but also to all relevant circumstances and incidental questions centering around the issue. Hence the present relief prayed for by the petitioners must be deemed to have been denied, for what is claimed but not granted necessarily get denied in judicial or quasi-judicial proceeding. Writ dismissed. - W.P. (C) Nos. 839, 837 and 1657-1658 of 2007, - - - Dated:- 7-12-2010 - B.K. Sharma, J. Dr. A.K. Saraf, Sr. Advocate, for the Petitioner. Shri B. Sarmah, SC, for the Respondent. [Judgment]. All the writ petitions being based on same set of facts and the issue involved being one and the same, have been heard analogously and are being disposed of by this common judgment and order. 2. In all the writ petitions the petitioners have challenged the action of the respondents in levying interest on the amount recoverable from the petitioners on account of the excise duty in terms of Section 154 of the Finance Act, 2003. Briefly stated the facts leading to filing of the instant writ petitions are as follows. 3. On 24-12-97 the Central Govt. announced a new Industrial Policy Resolution for the North Easter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 003 was upheld by the Apex Court vide judgment and order dated 19-9-2005 and accordingly all the appeals as well as the Transfer Petitions were disposed of according to the said judgment and order. Thereafter, the petitioner filed a review petition before the Apex Court and the same was dismissed on 15-12-05. After the judgment of the Apex court upholding the validity of Section 154 of the Finance Act, 2003, the petitioner deposited an amount of Rs. 14,08,88,610/-. The respondents however have issued notice for payment of interest of Rs. 5,60,78,347/-. Interest has also been levied for the period for which the recovery of central excise as per Section 154 of the Finance Act, was stayed by this Court. 7. It is in the aforesaid backdrop, the petitioners have challenged the notice dated 25-10-05 issued by the Superintendent of Central Excise, Guwahati -IV Range directing the petitioners to pay interest amounting to Rs. 4,75,93,340/- and the detention order dated 9-2-07. Further prayer made in the writ petition is for declaration to the effect that the levy and demand of interest for Rs. 5,60,78,347/- is unconstitutional and illegal. 8. While entertaining the writ petitions by orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioners they were never in arrears of any central excise duty due or payable w.e.f. 3-6-03 to 15-12-05 or even before and since there was challenge to the correctness or otherwise to the retrospective legislation and pending such judicial review of the provisions contained in the Finance Act, recovery of the demand was stayed by this Court. 13. The petitioners have pleaded that the impugned order/demand of recovery of interest of Rs. 5,60,78,347/- and the subsequent notice for recovery of the said amount are flagrantly arbitrary and the same cannot apply in the case of the petitioner company as there was no wilful default on the part of the petitioner company and hence there can be no interest payable by the petitioners. Further stand of the petitioners is that the liability for interest being in the nature of a penalty is not an automatic liability and is not imposable unless the principal amount has not been paid in deliberate defiance of the law or the assessee is guilty of contumacious conduct. According to the petitioners since they were bona fide disputing the constitutional validity and there being already judgment of this Court in its favour, no claim for such inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to pay the interest in question. 17. In the affidavit in reply filed by the petitioners while reiterating and reaffirming the contentions raised in the writ petitions, it has been contended that in the aforesaid decision of the Apex Court, there being no specific order that interest can be recovered as per the provision of sub-section (4) of Section 154 of the Act and/or the Apex Court in the said judgment having not decided the question as to whether in view of the stay order granted by this Court and continued by the Apex Court, the amount demanded was recoverable within the meaning of Section 154(4) of the Act, the respondents are precluded from making the demand for payment of interest even for the period when the said stay order was in operation. 18. I have heard Dr. A.K. Saraf, learned Sr. counsel appearing for the petitioners as well as Mr. B. Sarmah, learned Standing counsel, Central Excise. I have also considered the entire materials on record. 19. Dr. Saraf, in support of his argument centering around the aforesaid grounds urged in the writ petition, has placed reliance on the following decisions : (1) (1976) 1 SCC 766 (Superintendent of Taxes, Dhubri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thing contained in any judgment, decree or order of any court, tribunal or other authority, any action taken or anything done or purported to have been taken or done under the said notifications, shall be deemed to be and always to have been, for all purposes, as avidly and effectively taken or done as if the notifications as amended by this sub-section had been in force at all material times. (2) For the purposes of sub-section (1), the Central Government shall have and shall be deemed to have the power to amend the notifications referred to in the said sub-section with retrospective effect as if the Central Government had the power to amend the said notifications under sub-section (1) of Section 5-A of the Central Excise Act read with sub-section (3) of section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957) and sub-section (3) of Section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978), retrospectively at all material times. (3) No suit or other proceedings shall be maintained or continued in any court, tribunal or other authority for any action taken or anything done or omitted to be done, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made to continue till further orders. In the meantime the W.P.(C) No. 4398/03 filed by the petitioners challenging retrospective amendment of Section 154 of the Finance Act, 2003 pending in this Court was permitted to be transferred to the Apex Court by order dated 19-1-04. 24. The Apex Court on 19-9-05 finally decided the transfer cases challenging the retrospective amendment as well as the appeal arising out of the judgment of the Division Bench of this Court. The said retrospective amendment made by the Finance Act, 2003 was upheld by the Apex Court vide judgment and order dated 19-9-05 and accordingly all the appeal as well as the transfer petitions were disposed of according to the said judgment and order. 25. It was in the aforesaid backdrop the respondents issued the aforesaid impugned orders. According to Dr. Saraf, learned counsel for the petitioners, levy, demand and recovery of the interest of the amount in question is not with a view to collect any amount refunded as ordered by the Apex Court, but only to impose a penalty by way of interest upon the legitimate and legal refund amount which has been ordered to return and which has been returned and therefore, it is i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s judgment at the earliest moment. It was in that context, the Apex Court observed that State followed the policy of inactivity which was not impossibility. The State was required to issue notice under Section 7(2) of the particular Act within two years of expiry of the period of return. It was contended on behalf of the State that it was impossible to do so in view of the stay orders operating in the proceeding. This case is of no help to the case of the petitioners as the facts and law involved in both the cases are quite different and distinct. Merely because the stay order was operating in favour of the petitioners during the challenge of validity of Section 154 of the Act, it cannot be said that the authorities precluded demanding interest accrued during the period of operation of the stay order. 29. In V.R. Kalliyanikutty (supra), the Apex Court was concerned with the provisions of Kerala Revenue Recovery Act, 1968. It was held that the scheme of the Act is to provide for speedy recovery not merely the public revenue, but also the other kind of loans which are required to be recovered speedily in public interest. Examining as to whether the time barred claims of the State F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the period of their operation from July, 1999 to January, 2001 was pending in the Court and as to how the matters were then carried to the Apex Court by the Union Govt. It was also noticed that while the proceedings were pending and the issue was still at large, Section 154 was enacted and also that in such circumstances, Parliament cannot be blamed for having at least awaited the decision of the High Court, nor can the statutory provision be questioned as being unreasonably retrospective. In paragraphs 29 and 50 it has been observed thus : 29. The pendency of the proceedings before the courts meant that there was a possibility of an outcome adverse to the petitioners however strong the petitioners may have considered their case to be. If this Court had reversed the view of the High Court, the petitioners would have had to bear the burden of the excise duty for the period they had manufactured the cigarettes. It could not have been predicted with any certainty that the appeals of the Union of India would fail. By enacting Section 154, Parliament has forestalled a decision by this Court and in effect taken away the basis for the decisions of the High Court. In the circumsta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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