1977 (4) TMI 184 - HC - Central Excise

Court upholds petitions under amended law, finding prima facie case for rights enforcement. Trade Notice deemed ultra vires.

Ahmedabad Cotton Mfg. Co. Ltd. and Ors. Versus Union of India and Ors.

The court concluded that the petitions do not abate under the amended Article 226. The petitioners established a prima facie case for enforcement of their ... - Issues Involved:1. Whether the petitions abate based on the grounds mentioned in the respondents' affidavit.2. Legality and validity of the Trade Notice issued by the Deputy Collector of Central Excise.3. Jurisdiction and authority of the Deputy Collector to issue the Trade Notice.4. Applicability of Article 226 of the Constitution after the Forty-Second Amendment.5. Prima facie case for enforcement of fundamental rights under Article 31(1).Detailed Analysis:1. Whether the petitions abate based on the grounds mentioned in the respondents' affidavit:The court examined whether the petitions abate due to the grounds mentioned in the respondents' affidavit, particularly focusing on the retrospective effect of Section 58 of the Forty-Second Amendment Act, 1976. This section mandates that every pending petition before a High Court, which would not have been admitted under the amended Article 226, must abate. The court concluded that the abatement question hinges on whether the petitions could have been admitted under the amended Article 226.2. Legality and validity of the Trade Notice issued by the Deputy Collector of Central Excise:The petitioners challenged the Trade Notice issued by the Deputy Collector of Central Excise as null and void, arguing that it changed the basis of excise duty assessment for blended yarn from the spindle point to the stage of cones, bobbins, and beams. The court noted that the Trade Notice was not legally binding on the assessing authority and emphasized that any quasi-judicial power exercised by the Collector could not be controlled by such directions.3. Jurisdiction and authority of the Deputy Collector to issue the Trade Notice:The court scrutinized whether the Deputy Collector had the jurisdiction to issue the Trade Notice. It was established that under Rule 233, only the Collector in Gujarat had the power to issue such instructions, not the Deputy Collector. Consequently, the Trade Notice issued by the Deputy Collector was deemed ultra vires and without jurisdiction.4. Applicability of Article 226 of the Constitution after the Forty-Second Amendment:The court analyzed the amended Article 226, which restricts the High Court's jurisdiction to cases of enforcement of fundamental rights and redress of substantial injuries resulting from contraventions of constitutional or statutory provisions or substantial failures of justice. The court emphasized that petitions for enforcement of fundamental rights under Article 31(1) are not subject to the fetter of alternative remedies under Article 226(3). The court reaffirmed that the High Court retains jurisdiction to entertain petitions for enforcement of fundamental rights without the need for exhausting alternative remedies.5. Prima facie case for enforcement of fundamental rights under Article 31(1):The court found that the petitioners had made a prima facie case for enforcement of their fundamental rights under Article 31(1), as the excise authorities sought to enforce a demand for excise duty by changing the settled basis of excise levy without jurisdiction and in breach of the principles of natural justice. The court noted that the petitioners' property rights were threatened by the implementation of the Trade Notice, thereby justifying their approach to the court without exhausting alternative remedies.Conclusion:The court concluded that the petitions do not abate under the amended Article 226 and that the petitioners had established a prima facie case for enforcement of their fundamental rights. The Trade Notice issued by the Deputy Collector was deemed ultra vires and without jurisdiction. The petitions were directed to proceed to the Division Bench for final disposal. Costs were reserved to be determined in the petitions.