TMI Blog1975 (1) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... nt before the Collector of Central Excise and Ex. B 3 dated 26-5-1966 is the form of seizure report of the Inspector of Central Excise. There had been correspondence between the appellant and the Collector of Central Excise and an order was passed on 17-6-1966 marked as Ex. A 5 by the second respondent, the Collector of Central Excise, permitting the appellant to take delivery of the tobacco seized on executing a bond. Ultimately by an order dated 28-7-1966 marked as Ex. A 7 the Assistant Collector of Central Excise stated that the excess weight was due to the wetting of the tobacco and that constituted only 43 % excess weight and up to 45 % the excess could be allowed and therefore, purporting to give the benefit of doubt to the appellant, he directed the release of the tobacco. The appellant did not take delivery of the tobacco even then. Thereafter the Collector of Central Excise wrote a further communication to the Collector on 6-10-1966 marked as Ex. A 16 calling upon him to take delivery of the tobacco which had been ordered to be released even on 28-7-1966 itself. Contending that by the time the order was passed on 28-7-1966 the tobacco had become useless for the purpose of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Central Excises and Salt Act, at the relevant time, consisted of two sub-sections : Sub-section (1) was: "No suit shall lie against the Central Government or against any officer of the Government in respect of any order passed in good faith or any act in good faith done or ordered to be done under this Act." Sub-section (2) was: "No suit, prosecution or other legal proceeding shall be instituted for anything done or ordered to be done under this Act after the expiration of six months from the accrual of the cause of action or from the date of the act or order complained of". Thus it will be seen that there are vital differences between the two sub-sections. Sub-section (1) refers to the Central Government or any officer of the Government. It also refers to any order passed in good faith or any act in good faith done or ordered to be done under the Act. If an order has been passed in good faith or any act in good faith has been done or ordered to be done under the Act, sub-section (1) gives complete and absolute protection obviously because of the good faith on the part of the Government or the Officer. Thirdly sub-section (1) refers to suits only. On the other hand, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he act and it does not go to the legality or the propriety of the act itself. That was the view taken by the Supreme Court in Firm of Illuri Subbayya Chetty and Sons v. The State of Andhra Pradesh (1) 14 S.T.C. 680 with a reference to a similar language occurring in Section 18-A of the Madras General Sales Tax Act, 1939. That section also used the expression "any assessment made under this Act" and the argument that was advanced before the Court was that the expression "any assessment made under this Act" would apply only to a valid or legal or correct assessment. That argument was rejected by the Supreme Court which stated : "The expression any assessment made under this Act' is in our opinion wide enough to cover all assessments made by the appropriate authorities under this Act whether the said assessments are correct or not. It is the activity of the assessing officer acting as such officer which is intended to be protected and as soon as it is shown that exercising his jurisdiction and authority under this Act, an assessing Officer has made an order of assessment, that clearly falls within the scope of section 18A. The fact that the order passed by the assessing authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 40(2). It is Section 40(1) that refers to good faith and when good faith is present, the protection given to the government or the officer concerned is absolute and that the protection is absolute, there is no question of a period of limitation being prescribed for filing a suit or launching a prosecution or initiating any legal proceeding against the Government or the Officer concerned. Only when because of want of good faith, protection provided for in section 40(1) is not available section 40(2) will be invoked and the only limitation provided for in section 40(2) is with regard to the period within which action has to be taken. It has to be remembered that section 40(2) does not grant protection at all. It merely prescribes a period of limitation just like the limitation Act generally prescribe a period of limitation for all actions. As a matter of fact sub-section (1) of section 40 applies only to Government and the officers of the Government and sub-section (2) of section 40 applies to Government, officers of Government and others also and where in a suit the question of want of good faith is alleged against the Government or the officers of the Government and it is found th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of suits, prosecutions or other legal proceedings without any qualifying words as to person against whom suit, proceeding and prosecution shall be instituted. The contention of the appellant that sub-section (2) is confined only against the Government Officers is not warranted by the words of the statute and is repelled by reference to other comparable statutes which have indicated in clear words when the statute contemplates bar of suits, proceedings or prosecution against Government servants only. The words in Section 40(2) of the Act in the present case are of wide amplitude to apply to the prosecution which was commenced against the respondents in the present appeals". Proceeding further, the court observed. Sub-section (2) of Section 40 does not introduce the test of good faith in relation to act done. Good faith is one of the aspects in Section 40(1). The present appeals do not turn on sub-section (1) of Section 40". 8.The above decision was rendered in the context of the contention that section 40(2) was restricted to action taken against the Government servants only and the Supreme Court held that no such restriction was to be found in Section 40(2) and that Section 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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