TaxTMI 
TaxTMI 
2007 (3) TMI 788
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 2. Briefly stated the facts giving rise to the filing of the writ application under Article 226 of the Constitution of India before the learned Single Judge are as follows : A notice dated 30th January, 2002 (Annexure-P2) was issued against the Petitioner No. 1, viz. M/s. Biswanath Hosiery Mills Ltd. It was issued by the Assessing Officer appointed by the Committee established under the provisions of the Textiles Committee Act, 1963 (hereinafter referred to as "the Act"). By it, the Assessing Officer afforded an opportunity of hearing to the Petitioner No. 1, viz. M/s. Biswanath Hosiery Mills Ltd., before assessment of cess payable by it in terms of Section 5A of the Act. It was indicated that for the period from 1996-97 to 2000-01 the amount of payable cess would be around Rs. 14 lakh. 3. After hearing the Petitioner No. 1, the Assessing Officer passed an order dated 5th March, 2002 (Annexure-'P3'). By the said order, the Petitioner No. 1 was directed to submit the returns and pay the cess. Such order was followed by five demand notices (Annexure-'P4'). All the notices were issued on 10th April, 2002. They were issued under the provisions of the Textiles Committ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Court may deem fit and proper. 5. The learned Advocate appearing on behalf of the writ petitioner basically advanced three contentions before the learned Single Judge. First, cess is payable under the Act only by the manufacturer of the textiles who is liable to pay duty of excise under the Central Excises and Salt Act, 1944. Secondly, the Petitioner No. 1 being a manufacturer of hosiery cannot be considered to be a manufacturer of textiles within the meaning of Section 5A(3) of the Act, as the hosiery is exempted from duty under the Act of 1944. Thirdly, according to the petitioner, when Rule 8 specifies only two sources for obtaining the figures on the basis whereof the assessment could be made, the assessment made by the Assessing Officer on the basis of information derived and figures so obtained from a source other than any of the two sources mentioned in Rule 8, must be held to be bad in law being an act done de hors the provision of the relevant rule. 6. The learned Single Judge overruled the first two contentions by giving specific reasons and while rejecting the third contention, His Lordship observed that there is a decision of another learned Single Judg....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Central Excises and Salt Act; that the cess under the said Act is a part of a duty of excise under the Central Excises and Salt Act, 1944 and no cess can be levied and/or collected without levying the duty of excise under the Central Excises and Salt Act, 1944; that when Rule 8 of the Textiles Committee (Cess) Rules, 1975 specifically provided a manner in which cess has to be collected, the cess can only be collected in that manner and all other modes of collection of the cess in any event is impliedly barred and the authorities concerned are empowered to make assessment only by observing Textiles Committee Rules, 1975 and in no other manner. The learned Lawyer contended further that the learned Judge erred in accepting the contention of the respondents that in absence of return submitted by a manufacturer and when such manufacturer is exempted from paying duty of excise under the Central Excises and Salt Act, 1944 because of an exemption notification, the Assessing Officer is entitled to assess cess by following any other means not provided for in the Act or in the rules. 10. The learned Counsel for the writ petitioner in this connection relies upon the following decision....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Counsel for the respondents further argued that decision rendered earlier by another the learned Single Judge which has been dissented to by the learned Trial Judge was given without considering the purpose and object of the Act, and particularly that of Section 5A (which is the charging section) and the provisions contained in the Rule 11 of the rules and while the charging Section created a liability, the rules and particularly provisions of Rule 8, must be interpreted so as to advance the purpose and object of the charging section and not to frustrate and defeat the same. 14. The learned Counsel relied on the judgment of the Madras High Court in the case of Tamil Nadu Handloom Weavers Co-operative Society v. Assistant Collector of Central Excise, Erode reported in 1978 (2) E.L.T. (J 57) (Mad.) where Madras High Court held that once the goods are exempted from excise duty they do not cease to be excisable goods. The character of the excisable goods does not depend on the actual levy of duty but depends on the description as excisable goods in the First Schedule to the Act. 15. The learned Counsel also relied on the judgment of the Supreme Court in the case of Ass....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r any particular rule probably because the Collector, in the circumstances of the case, was not certain about the rule under which the notice could fall. But, as was pointed out by this Court in Sanjana's case (supra), the failure to specify the provision under which a notice is sent would not invalidate it if the power to issue such a notice was there. 28. The notice alleged that it is a case of 'incomplete assessment'. The allegations contained in it have been characterized by the learned Counsel for the company as a change of front intended to cover up the neglect of the Collector in failing to comply with the correct procedure of making either an assessment before delivery contemplated by Rule 52 or a provisional assessment under Rule 10B. We are unable to hold, either upon the findings given by the High Court or upon facts transpiring from the affidavits filed by the parties that the notice was a mere cloak for some omission or error or inadvertence of the Collector in making a levy or an assessment. 29. We may point out that Rule 10 itself has been amended and made more reasonable in 1969 so as to require a quasi-judicial procedure by serving a show cause noti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....plied power to hold an enquiry in the circumstances of the case before us, in view of the provisions of Section 4 of the Act read with Rule 10A of the Central Excise Rules, was not examined by the Calcutta High Court because it erroneously shut out consideration of the meaning and applicability of Rule 10A. The High Court's view was based on an application of the rule of construction that where a mode of performing a duty is laid down by law it must be performed in that mode or not at all. This rule flows from the maxim : 'Expressio unius est exclusio alterius.' But, as was pointed out by Wills, J., in Colquhoun v. Brooks 1888 (21) QBD 52 at p. 62, this maxim 'is often a valuable servant, but a dangerous master....' The rule is subservient to the basic principle that Courts must endeavour to ascertain the legislative intent and purpose, and then adopt a rule of construction which effectuates rather than one that may defeat these. Moreover, the rule of prohibition by necessary implication could be applied only where a specified procedure is laid down for the performance of a duty. Although Rule 52 makes an assessment obligatory before goods are removed by a manufacturer, yet, neithe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....produced or manufactured in India at the rate set forth in schedule, thereby showing that excisable goods in the definition in the section refer only to the description of the goods in Column (2) of the First Schedule, and not to the rate of duty in Column (3) of the Schedule. The exemption granted by the notification of the Central Government made on 28-2-1986 only exempts hosiery items from the levy of excisable duty and it does not change the nature and character of the goods as excisable goods within the meaning of the Act. The notification proceeds on the assumption that the hosiery is excisable goods. If the hosiery is not excisable goods, then there was no need or occasion for exempting the same from the levy of excise duty. We are unable to agree with the learned Counsel for the petitioner that once the hosiery is exempted from excise duty, it ceases to be excisable goods. 18. Apart from the aforesaid consideration, by and under Textiles Committee (Amendment) Act, a cess is to be levied and collected for the purpose of the Act as a duty of excise on all textiles and textile machinery manufacturing in India on ad valorem basis at the rate notified in the Official Gaz....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the statute in question, unhasitantly manifests its intention that the cess payable under the Act is independent of the provisions contained in the Act of 1944 and simply because by subsequent notification, the hosiery items have been exempted from the tax under the 1944 Act for the time being, for that reason the writ petitioner cannot evade its liability under the Act. 23. In the case of J.K. Steel Ltd. v. Union of India and Ors., the Supreme Court held that in interpreting a fiscal statute the Court cannot proceed to make good deficiencies if there may be any; the Court must interpret the statute as it stands and in case of doubt in a manner favourable to the taxpayer. In the case before us, there is no trace of doubt that the cess payable under the Act is an independent liability and has no connection with the liability under the Act of 1944. We therefore find that the said decision does not help the writ petitioner in any way. 24. The learned Counsel next relied on the two judgments of the Supreme Court, one in the case of Union of India and Ors. v. Deokinandan Agarmalla reported in AIR 1992 SC 96 and the other in the case of A.K. Roy and Ors. v. State of Pu....