TMI Blog1986 (2) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Paramount Synthetics (P) Limited, (3) KDB Crimping-Proprietors Kapal Dyeing and Bleaching Works (P) Ltd., (4) Orkay International, and (5) Orkay Textiles Corporation. The petitioner No. 2 is a director and the chairman of the board of directors of petitioner No. 1 company. 2. The respondent No. 1 was the Director in charge of the Directorate of Anti Evasion, Central Excise, and his office was situated at New Delhi. Shri R. Bhattacharji was the Deputy Director at New Delhi, while Shri V.R. Gangyrde was working as Deputy Director in Bombay. On Bombay 26, 1984, the respondent No. 1 along with Shri Bhattacharji and other members of the team came down to Bombay and raided the premises of the petitioner No. 1 company and simultaneously its associates, various texturisers, consumers, customers and dealers. The raids were carried out under the overall control and guidance of respondent No. 1 and of the two Deputy Directors : Bhattacharji and Gangurde. The raiding party obtained instructions from respondent No. 1 on telephone from time to time and thereafter reported the result of the raids and letters were also addressed to respondent No. 1 communicating the result. The factory premise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On April 18, 1985, the request was reiterated and the company also claimed that one Shri Gokeni should be submitted for cross-examination. On April 19, 1985, the company informed respondent No. 1 offering demonstration of drawing 160 denier textured yarn made from POY of 755 denier. The offer was reiterated on May 15, 1985. On May 17, 1985, the respondent No. 1 was requested to permit cross-examination of Majumdar of Himsons and to supply copies of proceedings and depositions recorded. These applications made by the company were never answered. The respondent No. 1 gave hearing to the company on April 20, May 2, May 14, Mav 15, May 25, May 30, and May 31, 1985. The hearing concluded on May 31, 1985 at about 1.30 in the afternoon. The respondent No. 1 flew back to Delhi the same evening and declared the impugned order at New Delhi on June 1, 1985 which was Saturday. The impugned order was given wide publicity in newspapers and corrigendum was issued on June 6, 1985. The petitioner No. 1 company received a cyclostyled copy of the order on June 12, 1985 and the order runs into 130 pages. By the impugned order, the respondent No. 1 directed the company to make payment of Rs. 4,48,48 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etting aside the show cause notice and the impugned order dated June 1, 1985 along with the corrigendum dated June 6, 1985. I granted ad interim relief as I was informed on behalf of the respondents that respondent No. 1 had left the country and was not likely to return back for about four weeks. The petition come up before Mrs. Justice Sujata Manohar for confirmation of interim relief after period of 8 weeks as requested by the respondents and the interim relief was confirmed and the hearing was expedited. Against the admission of the petition, as well as the grant of ad interim relief and confirmation of reliefs, appeals were preferred by the respondents before the Division Bench of this Court and the interim relief was modified by imposing certain conditions. The appeal court passed the order on November 20, 1985 and directed that the petitioner should be heard peremptorily on December 16, 1985. Before admission of the petition, on behalf of respondents, affidavits were filed by Shri V.R. Gangurde sworn on September 13, 1985 and by Shri K.L. Desai on September 19, 1985. After the admission of the petition, on December 11, 1985, Shri Gangurde has filed another affidavit oppos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent No. 1 was the Director, Anti Evasion and was posted at New Delhi and came down along with his team to Bombay for carrying out raids on the properties and factory premises of the company. The raids were carried out under the direct control and supervision of respondent No. 1 and the averment made in the petition that the raiding party was taking instructions on telephone from respondent No. 1 and was also informing the result of the raid was not even controverted. The raiding party also addressed letters to respondent No. 1 and subsequently took instructions. Moreover, the respondent No. 1 before adjudication and even before the hearing, declared rewards to the investigating officers of the raiding party. These facts unmistakably establish that the respondent No. 1 was closely connected with the raids and with the investigation carried out to' ascertain whether there was any tax evasion on the part of the company. After the raids were over, respondent No. 2 in exercise of the powers conferred by Clause (b) of Section 2 of the Act invested the Director, Anti Evasion with the powers of Collector of Central Excise and respondent No. 1 was holding that post at the relevant time. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that a prosecutor or a complainant can never be a judge of his own cause. The respondent No. 1 undertaking the adjudication of the alleged evasion of duty, in these circumstances, was entirely a mis fit and the impugned order passed by the respondent No. 1 cannot be sustained. 7. But, apart from this, there is more serious objection to the manner in which respondent No. 1 has passed the impugned order. I am not examining the claim of Shri Desai that respondent No. 1 did not pass orders on several applications made by the company because, in my judgment, the method of passing the order creates serious suspicion in my mind about the bona fide exercise of the powers. The respondent No. 1 concluded the hearing on May 31, 1985 at about 1.30 p.m. in the evening and it is claimed on behalf of the respondents that respondent No. 1 proceeded to Delhi by aircraft and reached there by about 8.00 p.m. The respondent No. 1 claimed that he had telephonically informed his stenographer to remain ready to take dictation and dictated the order till 11.30 p.m. and continued the same on the next day from 7.00 a.m. till 11.45 p.m. The respondents claim that the order was signed by respondent No. 1 at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion was filed on July 16, 1985 and at the stage of admission, Shri Dalal sought 8 weeks' time on the ground that respondent No. 1 has gone out of the country. Even after his return and at the time of confirmation of the interim order or at the time of filing the appeal, the respondent No. 1 did not file any affidavit. The respondent No. 1 was in the know of the things and it is obvious that he deliberately avoided to file affidavit. Secondly, even assuming that respondent No. 1 had retired from service, still it does not prevent him from filing affidavit. It is futile, in these circumstances, for Shri Dalal to suggest that reliance should be placed on the affidavit of Shri K.L. Desai that the order was dictated for day and night by respondent No. 1. It surpasses my imagination as to how respondent No. 1 could have dictated the order for such long hours and how his stenographer could have transcribed and made it ready for signing of respondent No. 1 at midnight. As Shri Dalal persisted in his submission that respondent No. 1 could have dictated the order and could have signed the transcribed order before midnight, I enquired from the learned Counsel as to whether the respondents w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact that respondent No. 1 has imposed the penalty of Rs. 50,00,000 on petitioner No. 2 even though he was not served with any show cause notice or was not given any hearing. It is impossible to imagine how any quasi-judicial authority would go to such an extent and pass such atrocious order. Shri Dalal could not support the order but submitted that the respondents would give fresh hearing to petitioner No. 2. The question is not whether the respondents would give hearing to petitioner No. 2, but whether respondent No. 1 had applied his mind before passing such order or the penalty was imposed at the dictates of somebody else. The entire order deserves to be quashed on the ground of total non-application of mind, on the ground of violation of every known principle of natural justice and also on the ground that it is not clear whether the order was passed by respondent No. 1 or by some one else in the name of respondent No. 1. In these circumstances, it is not necessary to examine various other contentions urged by Shri Desai to challenge the legality of the order. 9. Shri Dalal then submitted that even assuming that the order is violative of principles of natural justice and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dalal that inspite of this high-handed action on the part of respondent No. 1 and on the part of respondent No. 2 in appointing respondent No. 1 as an adjudicating officer, the relief should be refused. This Court would certainly not have entertained the petition and entered into the merits of the matter if it was found that the action of respondent No. 1 did not suffer from any serious infirmity. The reliance upon the decision of the Supreme Court is also not correct because the Supreme Court while observing that the High Court should not exercise jurisdiction under Article 226 of the Constitution of India when there is a statutory remedy of appeal made it clear that in a case of inherent lack of jurisdiction and violation of principles of natural justice, the High Court can and should exercise jurisdiction. In my judgment, this is a fit case where the High Court should exercise jurisdiction and grant relief to the petitioners. Accordingly, the objection raised by Shri Dalal to the entertainment of the petition is repelled. 10. It is necessary to reiterate that the quasi-judicial authorities exercising powers under the Act should remember that not only justice should be done bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that question depends not upon what actually was done, but upon what might appear to be done." [Underlining supplied]. 11. Though the impugned order passed by respondent No. 1 is required to be struck down, it is not necessary to strike down the notification investing powers of the Collector of Central Excise in favour of Director of Anti Evasion. The powers have been conferred on the person holding that office and respondent No. 1 is no longer holding that office. The notification, though appears to have been issued for conferring power on respondent No. 1, would no longer enable respondent No. 1 to exercise the power and there is no reason why the notification should be struck down and deprive the next office bearer from enjoying the powers. It is also not necessary to strike down the show cause notice because it is always open for respondents to appoint a fresh adjudication officer and to proceed to re-hear the whole matter in pursuance of the show cause notice earlier issued and adjudicate afresh. In my judgment, the only relief which the petitioners are entitled to is of quashing of the impugned order. 12. Accordingly, petition partly succeeds and the impugned order dated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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