1974 (10) TMI 112 - HC - Central Excise

Court Upholds Revenue Order, Grants Writ of Mandamus

The court dismissed the case filed by the State and the Commissioner of Excise, upholding the legality and jurisdiction of the order passed by the Member, ... - Issues Involved1. Jurisdiction of the Board of Revenue under Section 8 of the Bihar and Orissa Excise Act, 1915.2. Validity of the contract between the petitioner and the State Government.3. Entitlement of the petitioner to payment at the rate of 42 paise per L.P. litre.4. Adequacy of the writ of mandamus for enforcing the payment.Detailed Analysis1. Jurisdiction of the Board of Revenue under Section 8 of the Bihar and Orissa Excise Act, 1915The court examined whether the Board of Revenue had the authority to pass the order dated 11th May 1973, directing the Excise Department to make payment to the petitioner. The court noted that Section 8 of the Act allows the Board to revise any order passed by the Collector, the Excise Commissioner, or the Commissioner of a Division. The court held that the Board has supervisory powers over the Excise Department and can issue appropriate directions even if no specific order has been passed. The court cited the case of M. R. Patel v. State of Bihar, AIR 1966 SC 343, to support its view that the Board can exercise its powers of superintendence and issue directions to the Excise Commissioner.2. Validity of the Contract between the Petitioner and the State GovernmentThe court examined whether there was a concluded contract between the petitioner and the State Government. The court noted that the State Government had granted the exclusive privilege to the petitioner for the supply of country spirit at the rate of 42 paise per L.P. litre, as communicated by the letter dated 13th March 1968. However, the petitioner had agreed to continue the supply at the rate of 33 paise per L.P. litre on a provisional basis due to the pendency of the writ application. The court held that the petitioner had acted to its detriment based on the assurance given by the Excise Commissioner and that the State Government could not disown its liability under the letter dated 13th March 1968. The court further held that there was substantial compliance with Section 22(2) of the Act, even though a formal license had not been issued to the petitioner.3. Entitlement of the Petitioner to Payment at the Rate of 42 Paise per L.P. LitreThe court examined whether the petitioner was entitled to payment at the rate of 42 paise per L.P. litre for the supplies made during the period 1968-71. The court noted that the petitioner had made supplies based on the assurance that it would be paid at least at the rate of 42 paise per L.P. litre. The court held that the petitioner was entitled to the difference between 33 paise and 42 paise per L.P. litre, as directed by the Member of the Board. The court rejected the State's contention that the acceptance of the rate at 42 paise per L.P. litre never became effective.4. Adequacy of the Writ of Mandamus for Enforcing the PaymentThe court examined whether a writ of mandamus was the appropriate remedy for enforcing the payment. The court held that the petitioner's claim was not purely contractual but was based on the statutory power exercised by the State Government under the Act. The court cited several judgments of the Supreme Court, including Union of India v. Anglo-Afghan Agencies AIR 1968 SC 718 and Century Spinning and Manufacturing Co. Ltd. v. Ulhasnagar Municipal Council AIR 1971 SC 1021, to support its view that public authorities are bound to carry out representations and promises made by them. The court held that the writ of mandamus was appropriate for compelling the State Government to perform its statutory obligations.ConclusionThe court dismissed C.W.J.C. No. 1417 of 1973 filed by the State and the Commissioner of Excise, holding that the order passed by the Member, Board of Revenue was legal and within jurisdiction. The court allowed C.W.J.C. No. 1361 of 1973 filed by the petitioner and issued a writ of mandamus directing the respondents to implement the order dated 11th May 1973.