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SCA/1118020/2008 8/ 8 JUDGMENT
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL
CIVIL APPLICATION No. 11180 of 2008
For
Approval and Signature:
HONOURABLE
MR.JUSTICE K.A.PUJ
HONOURABLE
MR.JUSTICE RAJESH H.SHUKLA
=========================================================
1
Whether
Reporters of Local Papers may be allowed to see the judgment ?
2
To be
referred to the Reporter or not ?
3
Whether
their Lordships wish to see the fair copy of the judgment ?
4
Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder ?
5
Whether
it is to be circulated to the civil judge ?
=========================================================
HINGORA
INDUSTRIES PVT.LTD. - Petitioner(s)
Versus
UNION
OF INDIA & 1 - Respondent(s)
=========================================================
Appearance
:
MR
SN THAKKAR for
Petitioner(s) : 1,
MR HARIN P RAVAL for Respondent(s) : 1,
None
for Respondent(s) :
2,
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE K.A.PUJ
and
HONOURABLE
MR.JUSTICE RAJESH H.SHUKLA
Date
: 09/09/2008
ORAL JUDGMENT
(Per
: HONOURABLE MR.JUSTICE K.A.PUJ)
Heard Mr. Mihir Joshi,
learned Senior Counsel with Mr. S.N. Thakkar, learned advocate
appearing for the petitioner and Mr. Harin P. Raval, learned
Assistant Solicitor General appearing for the respondent on advance
copy being served on him. Looking to the short issue involved in
the petition, the same is taken up for final hearing.
The petitioner has filed
this petition under Article 226 of the Constitution of India
challenging the order passed by the Custom, Excise and Service Tax
Appellate Tribunal, Ahmedabad on 7.4.2008, directing the petitioner
to deposit an amount of Rs.1 crore towards duty within a period of
12 weeks from the date of order. The petitioner was also directed
to file compliance report on or before 2.7.2008.
The petitioner has
challenged the said order before this Court in the present petition
filed on 23.6.2008. The matter was, however, in the office
objections. The objections were removed pursuant to the order
passed by this Court on 4.9.2008.
Mr.Joshi, learned Senior
Counsel appearing for the petitioner has submitted that the order
passed by the Tribunal directing the petitioner to deposit a sum of
Rs.1 crore is very harsh and looking to the financial position of
the petitioner it is not possible to deposit a sum of Rs.1 crore.
He has further submitted that the petitioner has very strong case on
merits and if the petitioner would not deposit the said amount the
appeals which are pending before the Tribunal get frustrated. He
has further submitted that while passing an order of deposit of sum
of Rs.1 crore the Tribunal has not assigned any reason whatsoever,
especially when the order under challenge before the Tribunal was in
violation of the principles of natural justice. The petitioner has
applied for time on 5.11.2007 and the petitioner was given to
understand that the matter was fixed on 22.11.2007. The impugned
order which was challenged before the Tribunal, however, was passed
on 19.11.2007. He has, therefore, submitted that without
considering this aspect of the matter, the Tribunal has passed the
impugned order and hence this Court should exercise its writ
jurisdiction under Article 226 of the Constitution of India granting
necessary relief, as prayed for in the petition.
Mr. Harin P. Raval,
learned Assistant Solicitor General appearing for the respondent has
submitted that the Tribunal has considered all the aspects of the
matter and arrived at the figure of Rs.1 crore by way of pre-deposit
and hence this Court should not interfere in the order. He has
further submitted that the conduct of the petitioner is such that no
indulgence is required to be shown. During the course of
investigation as well as adjudication proceedings and even after
adjudication and before the Tribunal as well as before this Court
the petitioner has made all attempts to delay the proceedings and
thereby to delay the payment of duty. The petitioner has not
appeared before the authority despite several notices and summons
were issued. No reply was filed and on the basis of materials,
available after detailed investigation, duty demand of Rs.3.28
crores was raised against the petitioner and looking to the
equivalent amount of penalty under Section 11AC as well as interest
under Section 11AB and the penalty of the three directors, deposit
of Rs.1 crore cannot be said to be harsh. He has, therefore,
submitted that no interference is called for by the Court.
Having heard learned
advocates appearing for the respective parties and having gone
through the orders of authorities below, we are of the view that the
order directing the petitioner to deposit a sum of Rs.1 crore by way
of pre-deposit is very harsh and that too in light of the
submissions made on behalf of the petitioner at the time of hearing
of stay application that the financial position of the petitioner
is very weak. Moreover, it is not borne out from the order of the
Tribunal as to how the amount of Rs.1 crore was ordered to be
deposited. We are not entering into the merits of the matter and we
are not expressing any opinion as to whether demand raised by the
Revenue authorities is just and proper. We are, however, of the
view that the petitioner should not be non-suited, without being
considered its appeal on merits, by passing an order of pre-deposit
of such amount which may not be complied with.
Considering the entire
facts and circumstances of the case, we are of the view that
interest of justice would better be served if the petitioner is
ordered to deposit a sum of Rs.25 lacs within six weeks from today.
Accordingly, the petitioner is hereby directed to deposit a sum of
Rs.10 lacs within two weeks and remaining amount of Rs.15 lacs
within four weeks thereafter. In any case, the entire amount as
indicated above should be deposited within six weeks from today. On
deposit of Rs.25 lacs within six weeks, the appeals, which are
pending before the Tribunal can be taken up for hearing by the
Tribunal as per its convenience. Learned Counsel has submitted that
the appeals are still pending before the Tribunal and hence the said
appeals can be taken up for hearing only after deposit of this
amount.
It is made clear that if
the amount of Rs.25 lacs is not deposited within the period of six
weeks from today all the appeals pending before the Tribunal shall
stand dismissed for non-compliance of the order of the Tribunal, as
modified by this Court. It is also made clear that as and when
appeals are fixed for hearing the petitioner shall co-operate in the
hearing and disposal of appeals.
Subject to the aforesaid
directions and observations, this petition is accordingly disposed
of without any order as to costs.
(K. A. PUJ, J.) (
RAJESH H. SHUKLA, J.)
kks
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