High Court of Kerala rules in favor of petitioner in Central Excise Act case, citing violation of natural justice

The High Court of Kerala found in favor of the petitioner in a case challenging an order under the Central Excise Act. The Court held that the order was passed in violation of the principles of natural justice as the petitioner was not given a proper hearing. Despite arguments on the maintainability of the writ petition, the Court allowed it, quashed the order, and directed the Tribunal to re-hear the appeal, emphasizing the importance of providing a fair opportunity for the petitioner to present their case.

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Issues: Challenge to order under Central Excise Act - Violation of principles of natural justice - Maintainability of writ petition.

Analysis:

1. Challenge to Order under Central Excise Act:
The petitioner, a company engaged in the business of manufacture and sale of plywood, challenged an order dated 30-3-2007 by the Commissioner of Central Excise, which levied an amount with interest and penalty for alleged violations of the Central Excise Act. The petitioner had filed an appeal before the Customs Excise and Service Tax Appellate Tribunal, which was dismissed on the grounds of non-deposit of duty demanded or filing an application for waiver under Section 35F of the Central Excise Act. The petitioner claimed to have submitted an application for waiver and approached the High Court challenging the order (Ext. P7).

2. Violation of Principles of Natural Justice:
The petitioner contended that the order (Ext. P7) was passed in violation of the principles of natural justice as they were not informed about the defect in the appeal or provided with a copy of the show cause notice. The petitioner also alleged that they were denied an opportunity to be heard as the notice of hearing was received only a day before the scheduled hearing. The Court found merit in the argument that the order was passed without affording the petitioner a proper hearing, thus violating the principles of natural justice.

3. Maintainability of Writ Petition:
The respondents argued that the writ petition was not maintainable, citing a decision of the Division Bench of the Madras High Court. However, the Court disagreed, stating that the availability of the remedy of appeal before the Court did not preclude the petitioner from seeking relief through a writ petition, especially considering the violation of natural justice in this case. The Court allowed the writ petition, quashed Ext. P7, and directed the Tribunal to re-hear the appeal and dispose of it in accordance with the law, emphasizing the importance of providing a fair opportunity for the petitioner to present their case.

In conclusion, the High Court of Kerala held that the writ petition was maintainable due to the violation of natural justice in the proceedings, and ordered a re-hearing of the appeal by the Tribunal to ensure a fair and just decision in accordance with the law.

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