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2024 (11) TMI 755

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....is Hon'ble Court be pleased to issue a writ, order or directions in the nature of certiorari or any other writ, order or direction of like nature, setting aside the Impugned Order dated 18.01.2013 (Exhibit-J) and Impugned letters dated 12.02.2014, 21.03.2014 and 08.02.2018 (Exhibit T, Exhibit-V and Exhibit-DD respectively) as being contrary to and in violation of the categorical direction of the Hon'ble Supreme Court in its Order dated 18.03.2013 (Exhibit-H).; (ii) this Hon'ble Court be pleased to issue a writ, order or directions in the nature of mandamus or any other writ, order or direction of like nature, directing the Respondents to (a) withdraw the Impugned order dated 18.01.2013 (Exhibit-T) and Impugned Letters dated 12.04.2014 and 08.02.2018 (Exhibit-V & Exhibit-DD) as the same are in contempt of Hon'ble Supreme Court's Order dated 18.03.2013 (Exhibit-H); (b) direct the Respondents to implement the Order of the Hon'ble Supreme Court dated 18.03.2013 (Exhibit-H) and accordingly, lift the attachment and seal of Petitioner's factory premises and (c) if necessary and required to auction the balance seized diamonds; (iii) this Hon'ble Court b....

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....st. Therefore, this demand for interest and refusal to release the sealed and attached factory premises on the grounds of non-payment of such interest amounts to disobedience to the Hon'ble Supreme Court's order dated 18 March 2013. He, therefore, submitted that an appropriate writ is liable to be issued to the respondents to de-seal and release the petitioner's factory premises without insisting upon payment of any interest of Rs. 31 Crores or thereabouts. 7. Without prejudice to the above contention, Mr Chinoy submitted that in the present case, no interest was ever demanded in the original adjudication order or, for that matter, any subsequent orders, including CESTAT's final order dated 21 December 2006. He submitted that even though interest may become automatically payable on the outstanding amounts, interest must still be demanded within a reasonable period. He submitted that the demand for interest in 2014 was both unfair and unreasonable. He submitted that such a demand contradicts the law the Hon'ble Supreme Court laid down in the case of Commissioner of Trade Tax, Lucknow Vs M/s. Kanhai Ram Thekedar 2005 (185) ELT 3 (SC). Accordingly, he submitted the insistence....

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.... the demand for interest is statutory and operates automatically. She submitted that there is no necessity of any show cause notice or a formal demand in such matters. She also relied on Kanhai Ram Thekedar (supra) in support of this contention. In addition, she relied on the Commissioner of Customs, Bangalore Vs. Pierre Colsun Inc. 2011 SCC OnLine Kar 4465, to support such a proposition. 12. Ms Thakkar submitted that arguments about the respondents lacking the power to seal or attach the factory premises were also misconceived. She submitted that such an argument could not be raised belatedly, particularly after no such argument had been raised or pressed before the Hon'ble Supreme Court in the two earlier rounds of litigation. She submitted that this petition was instituted after considerable delay, and such a delay has not even been explained in the petition. She submitted that since the Hon'ble Supreme Court granted no liberties, this petition should not be entertained. 13. For all the above reasons, Ms Thakkar submitted that this petition may be dismissed. 14. The rival contentions now fall for our determination. 15. The petitioner is a partnership firm engaged in the manu....

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....r, requiring the petitioner to pay the duty of Rs. 12,31,86,708/-, the penalty of Rs. 12,31,86,708/- and a redemption fine of Rs. 43,00,000/-. On 18 January 2013, the respondents also sealed the petitioner's factory premises. The petitioner aggrieved inter alia by the CESTAT's final order dated 21 December 2006 and sealing of its factory premises, appealed to the Hon'ble Supreme Court. This appeal was disposed of by order dated 18 March 2013. No argument about the sealing being without jurisdiction or ultra vires was raised or pressed before the Hon'ble Supreme Court. Instead, payment relief through an instalment facility was obtained. The Hon'ble Supreme Court clarified that upon discharge of entire liability within the timelines prescribed, the sealed factory should be restored to the Petitioner. 20. Since the petitioner's case mainly focuses on the Hon'ble Supreme Court's order dated 18 March 2013, the same is transcribed below for the convenience of reference: - "Delay condoned. 2. After arguing the matter for some time, Mr. V. Sridharan, learned senior counsel for the appellant, submits that the appellant accepts the judgment of the Customs, Excise and Service Ta....

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....ts. By an order dated 09 February 2015, this Court directed the Commissioner of Customs to hear those petitioners and pass appropriate orders regarding the attachment of the properties. Ms Thakkar pointed out that one of the petitioners was Mr. Bharat Shah, the present petitioner's partner. 23. After hearing the eleven petitioners, including the present petitioner's partner, Mr. Bharat Shah, the Commissioner of Customs, made an order dated 26 March 2015 upholding the orders of attachment. The Commissioner of Customs also held that there was no disproportionality involved because the demand for Rs. 31 Crores in interest was still outstanding. 24. Mr Chinoy submitted that neither the petitioner nor its partners were parties to the proceedings before the Commissioner of Customs. This submission cannot, at least prima facie, be accepted because the record shows that one of the petitioners was the partner of the present petitioner. In any event, even if Mr. Chinoy's contention is accepted, nothing much will turn on the same in the context of the reliefs claimed by the present petitioner in the present petition. 25. The petitioner, once again claiming to have made payments in ....

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.... in the matter. There is no explanation for this delay. However, this petition was filed on 06 July 2022 and extensively amended on 29 July 2024. This petition seeks substantially the same reliefs sought in Interim Application No. 3 of 2016 in Civil Appeal No. 2644 of 2013 and Writ Petition (C) No. 130 of 2018 filed by the petitioner before the Hon'ble Supreme Court. The dismissal of this Interim Application as withdrawn unconditionally and the Writ Petition, again, without any specific liberty, were sought to be downplayed by the petitioner. 30. The petitioner seeks relief in this petition, mainly on the grounds that the respondents allegedly defied the Hon'ble Supreme Court's order dated 18 March 2013 and thereby committed contempt of the Hon'ble Supreme Court. We are unsure whether we are the proper forum to decide such an issue and whether such contention found no favour with the Hon'ble Supreme Court when it was raised in Interim Application No. 3 of 2016 and Writ Petition (C) No. 130 of 2018 before the Hon'ble Supreme Court. However, the Counsel for the petitioner submitted that this Court should go into the issue of compliance as otherwise, the Petitioner would be witho....

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....Chinoy's above contention does not commend to us. The obligation to clear the entire liability of Rs. 24.63 Crores (approx.) by 22 August 2013 was almost absolute. The consequences for default were provided in clause (5) of the order. The directions regarding adjustments or the sale of diamonds would apply in the context of recoveries that the respondents would have to effect if the petitioner failed to clear the entire liability under the impugned order. 36. In any event, based on the materials on the record, we find it difficult to accept the petitioner's contention that the petitioner had cleared the entire liability in terms of clause (4) of the Hon'ble Supreme Court's order dated 18 March 2013 or that there was no default in such compliance. Therefore, the petitioner's main contention cannot be accepted based on the materials on record. 37. The petitioner failed to explain why Interim Application No. 3 of 2016 or Writ Petition (C) No. 130 of 2018 were withdrawn almost unconditionally when identical allegations were made in the Interim Application and Writ Petition before the Hon'ble Supreme Court. The possibility of the petitioner merely taking chances with Court....

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....tions, therefore, cannot construe dehors the context and the statutory provisions. In any event, Kanhai Ram Thekedar (supra) has accepted the position that the assessee is liable to pay interest on the unpaid amount of tax and that such liability arises automatically by operation of law. The Court held that a fresh notice of demand is unnecessary where the amount of tax or other dues is reduced due to the appeal, revision or other proceedings. 42. The Court, relying upon its earlier precedents in Sales Tax Officer, Sector I, Kanpur & Anr. Vs. M/s. Dwarika Prasad Sheo Karan Dass. (1977) 1 SCC 22 and Haji Lal Mohd. Biri Works Vs. State of U.P. (1974) 3 SCC 137  held that the liability to pay interest is automatic and arises by operation of law. It was further observed that the Sales Tax officer did not need to specify the amount of interest in the recovery certificate. The Court held that the assessing authority was not even required to serve a fresh notice upon the dealer. The Court also referred to Prahlad Rai & Ors. Vs. Sales Tax Officer Meerut & Ors. 1991 Supp. (2) SCC 612 rejected the assessee's contention that he had admittedly paid all sales tax arrears voluntarily; ....