TMI Blog1992 (12) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... e the relevant facts which led to filing of this Writ Petition. 3. The petitioner is a company registered under the Companies Act. It manufactures and sells, inter alia, Ayurvedic drug products known as Vicks Vaporub and Vicks Inhaler and Vicks cough products. The first two mentioned drugs are manufactured at its factory in Medak District of Andhra Pradesh. The controversy in this Writ Petition relates to classification of the said two drugs viz. Vicks Vaporub and Vicks Inhaler (the products) under the CETA. The petitioner claims that they fall under sub-heading 3000.30 whereas the Excise authorities classified them under sub-heading 3000.10. If the said products are classified as contended by the petitioner it need not pay any excise duty, but if the contention of the department is accepted, the rate of excise duty payable is 15%. The petitioner obtained a letter of registration from the Directorate General of Technical Development, Government of India for manufacture of Ayurvedic drugs including the said products in Andhra Pradesh on 6-9-1984. One of the conditions of the said letter is that it should obtain permission from the State Drug Controller before starting production o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... going behind the order of remand and in not accepting the licence granted under the Drugs Act and the Rules made thereunder as conclusive evidence of the fact that the products are Ayurvedic medicaments and committed error of jurisdiction and violated the principles of natural justice in accepting the evidence of the department behind the back of the petitioner. 4. The 4th respondent filed a counter-affidavit. It is stated that originally the assessee filed the classification lists for the products on 7-3-1986 classifying them under sub-heading 3000.19, which was approved by the 4th respondent on 31-3-1986. Again it filed lists on 15-4-1986 classifying them under sub-heading 3000.30 as Ayurvedic medicaments at Nil rate of duty. The ingredients used in the said products are synthetically prepared and are not natural extracts, so they are not the ingredients mentioned in Ayurvedic books, as in those books only natural extracts of herbs and plants are dealt with. Hence the classification filed by the petitioner under sub-heading 3000.30 is not correct. The registration letter of D.G.T.D. relied upon by the petitioner cannot be taken into consideration for Central Excise classificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licences for manufacture of Ayurvedic drugs under the rules therefore when a competent authority had decided a particular drug as Ayurvedic drug, in the absence of definition of Ayurvedic drug in the CETA, the same is binding on the authorities under the CETA. In the alternative, submits the learned counsel, the impugned order of the 4th respondent is without jurisdiction as it disregarded the relevant fact of decisiveness of the licence under the Drugs Act and the Rules and has gone beyond the scope of the remand and acted in violation of the principles of natural justice. He further contends that the order of the 4th respondent is a nullity as the order of the CEGAT that Vicks Vaporub was Ayurvedic medicine in common parlance was disregarded and the material presented by the Department after the date of hearing was relied upon in violation of principles of natural justice. It is also contended that the rule of exhaustion of alternative remedy would not apply to a case like the present one, where the principles of natural justice are violated and where an identical matter has been decided by the Madhya Pradesh High Court holding that the alternative remedy is not a bar and as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contained in the said Article or in any other provisions of the Constitution. That a person invoking the jurisdiction of the High Court under Article 226 should exhaust any alternative remedy is not to be found either under Article 226 or any other provisions of the Constitution. It may also be observed that the jurisdiction of the Court under Article 226 is a discretionary jurisdiction and that the discretion has to be exercised by the Court not arbitrarily or capriciously, but on sound judicial principles. For the exercise of the discretionary power by the High Courts to issue prerogative writs the Courts have laid down certain limitations. One among them is that where an adequate alternative remedy is available to the petitioner, the High Court will normally decline to issue the Writ. This is a rule of convenience and discretion rather than a rule of law. It does not create a bar on the exercise of jurisdiction, but is a factor to be taken into consideration in the exercise of jurisdiction under Article 226. The rule that judicial review should not be granted where an alternative remedy is available, is applicable in U.S.A. (See Macauley v. Waterman, 1946 327 US 540), in Englan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmine the questions raised thereby. Section 35J requires that the case referred to it be heard by a Bench of not less than two judges of the High Court. From any judgment of the High Court delivered on a reference made under Section 35G an appeal is provided to the Supreme Court if the High Court certifies it to be a fit one for appeal to the Supreme Court. Further power of revision is conferred in certain cases mentioned in Section 35EA on the Board or the Collector of Central Excise and on the Central Government under Section 35EE. Thus it is seen that the parliament has created hierarchy of authorities for adjudication of disputes under the Act; it has also provided a remedy of having the case stated to the High Court on questions of law and if the Tribunal declines to refer the question, the aggrieved party is also given a right to approach the High Court to require the Tribunal to state the case and refer the question to the High Court. Against the judgment of the High Court passed on reference, an appeal is also provided to the Supreme Court. If an aggrieved party is allowed to approach the High Court by invoking its power under Article 226 of the Constitution challenging the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remedy as no useful purpose would be served by asking the manufacturer to file an appeal or revision as such an appeal would be an appeal from Caesar to Caesar and thus alternative remedy in such cases was rendered nugatory. In that case against the impugned order of the Assistant Collector a statutory appeal was provided to the Collector. The opinion of the Collector was expressed in the circular and the impugned order of the Assistant Collector of withdrawal of exemption was based on that circular. 18. In Etikoppaka Co-operative Agricultural Society Ltd. v. Union of India [1979 (4) E.L.T. (J 533)] Chinnappa Reddi, J. (as he then was) held that the highest authority constituted under the Act, having already predetermined the question and having directed all the subordinate tribunals to interpret the notification in a particular manner, the statutory remedy of appeal and revision ceased to be a remedy. In that case the petitioners were manufacturers of sugar. One of the incentives was exemption from levy of excise duty on sugar produced during certain period. Pursuant to the clarification issued by the Central Government interpreting its earlier notification the rebate already al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the High Court to issue a writ, but that the existence of an adequate legal remedy was a thing to be taken into consideration in the matter of granting writs and where such a remedy existed it would be a sound exercise of discretion to refuse to interfere in a writ petition unless there were good grounds therefor. It has also been observed that it should be remembered that the rule of exhaustion of statutory remedies before a writ is granted is a rule of self-imposed limitation, a rule of policy, and discretion rather than a rule of law and the Court may therefore in exceptional cases issue a writ such as a writ of certiorari, notwithstanding the fact that the statutory remedies have not been exhausted. It is pointed out that there are well recognised exceptions to the doctrine with regard to exhaustion of statutory remedies, (1) where proceedings are taken before a Tribunal under a provision of law which is ultra vires; (2) where the impugned order has been made in violation of principles of natural justice. We may point out here that 'the rules of natural justice are not rigid norms of unchanging content and their ambit may vary according to the context' (Smith's 'Judicial Review ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ispute arose under the Taxation of Income (Investigation Commission) Act. Proceedings were taken against the petitioners under that Act. A writ petition was filed in the High Court of Punjab challenging the validity of the proceedings initiated under the said Act. One of the contentions raised before the High Court was that the Act being of a special nature which created new rights and liability and the remedies, so for any breach of violation thereof the only remedies which could be pursued by the aggrieved party are those provided under the Act and that Article 226 or 227 of the Constitution would not be available. This among other contentions was accepted by the High Court. On appeal to the Supreme Court, the Supreme Court held as follows : "For purposes of this case it is enough to state that the remedy provided for in Article 226 is a discretionary remedy and the High Court has always the discretion to refuse to grant any writ if it is satisfied that the aggrieved party can have an adequate or suitable relief elsewhere. So far as the present case is concerned it has been brought to our notice that the appellants before us have already availed themselves of the remedy provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... violation of rule of natural justice were concerned. Observing that that proposition was not disputed, the Full Bench held that distinction was to be made between cases where one was considering mere existence of alternative remedy and cases where there existed alternative remedy in law and that remedy was being actively pursued giving rise to parallel proceedings. 28. We may also observe here that having thus decided the Full Bench proceeded to consider the point raised therein on merits. On appeal to the Supreme Court in Sheo Nath Singh v. The Appellate Assistant Commissioner [AIR 1971 SC 2451] it was held that in a petition under Article 226 the correct course for the High Court after sustaining the preliminary objection of the respondent was not to proceed to decide the question on merits but to dismiss the writ petition. But as the High Court has dealt with the case on merit, the Supreme Court considered the finding of the Calcutta High Court and reversed the same. 29. H.M. Seervai in his treatise on Constitutional Law of India, Third Edition, in para 16.255 at page 1353 states - "However, where the petitioner applying for a writ of certiorari or prohibition was actuall ..... X X X X Extracts X X X X X X X X Extracts X X X X
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