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2022 (9) TMI 1595

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...., the respondents are represented by Shri SC Keyal, the learned Standing Counsel, Customs Department, who also questions the maintainability of the writ petition itself and therefore, the said objection has to be decided first. 3. Before going to the issue which has arisen for adjudication, it would be convenient to state the facts of the case in brief. 4. The petitioner no. 1 is the proprietor of M/s. SR Enterprise whereas the petitioner no. 2 is the Power of Attorney holder. The petitioners deal with the business of areca nuts for which license has been issued under Sections 25/57/95 of the Assam Panchayat Act, 1994. The petitioners also claim to have procured GST registration certificate. 5. It is the case of the petitioners that dried areca nuts were purchased from different purchasers. In May, 2020-6489 Kgs., in June, 2020-32560 kgs and in July, 2020, there was both purchase and sale and the remaining stock was 48336 kgs. Similarly, after the transaction in the month of August, 2020, the petitioners had total stock of dried areca nuts of 50757 kgs. out of which a quantity of 40300 kgs. were sold. The petitioners have projected that the Customs Authority has made the allegat....

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.... contended that neither Section 112 of the Act is applicable in the facts of the case nor Section 14. It is, accordingly contended that the aforesaid show cause notice is liable to be set aside and quashed. The learned counsel for the petitioner further submits that the application of the petitioners for provisional release of the goods has not been adjudicated upon and in this regard, a reminder dated 09.09.2020 was also made. 9. In support of his submissions, Shri Garodia, the learned counsel for the petitioner places reliance upon a number of decisions. However, this Court deems if fit to consider only the decisions of the Hon'ble Supreme Court and the relevant decisions of different High Courts. The following are the said decisions: (i) Calcutta Discount Company Ltd. vs. Income Tax Officer, (1961) 2 SCR 241, (ii) A.V. Venkateswaran vs. Ramchand Sobhraj Wadhwani, (1962) 1 SCR 753 : AIR 1961 SC 1506, (iii) M/s. Baburam Prakash vs. Antarim Zila Parishad, (1969) 1 SCR 518, (iv) Whirlpool Corporation Vs. Registrar of Trade Marks, (1998) 8 SCC 1, (v) State of AP vs. M/s. Linde India Ltd., (2020)16 SCC 335, (vi) AS Krishnan & Ors. Vs. State of Kerela, (2004) 11 SCC 576, ....

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....ent" for any of these years in consequence of which the under-assessment took place." 11. In the cases of A.V. Venkateswaran (supra) and M/s. Baburam Prakash (supra), the Hon'ble Supreme Court was considering the aspect of availability of alternative remedy. In the former case, the following observations were made: "9. We see considerable force in the argument of the learned Solicitor-General. We must, however, point out that the Rule that the party who applies for the issue of a high prerogative writ should, before he approaches the Court, have exhausted other remedies open to him under the law, is not one which bars the jurisdiction of the High Court to entertain the petition or to deal with it, but is rather a Rule which Courts have laid down for the exercise of their discretion. The law on this matter has been enunciated in several decisions of this Court ......... 10. The passages in the judgments of this Court we have extracted would indicate (1) that the two exceptions which the learned Solicitor-General formulated to the normal Rule as to the effect of the existence of an adequate alternative remedy were by no means exhaustive, and (2) that even beyond them a disc....

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.... is contrary to a binding circular by the Board. When a circular remains in operation, the Revenue is bound by it and cannot be allowed to plead that it is not valid nor that it is contrary to the terms of the statute. (2) Despite the decision of this Court, the Department cannot be permitted to take a stand contrary to the instructions issued by the Board. (3) A show cause notice and demand contrary to existing circulars of the Board are ab initio bad. (4) It is not open to the Revenue to advance an argument or file an appeal contrary to the circulars." 16. Per contra, Shri Keyal, the learned Standing Counsel, Customs Department, apart from opposing the writ petition has raised a preliminary objection on the maintainability of the writ petition. By referring to the affidavit-in-opposition filed by the respondents on 10.08.2021, the learned Standing Counsel has contended that the writ petition itself is a pre-matured one wherein a show cause notice dated 20.02.2021 has been put to challenge. It is submitted that the authorities have not even come to a conclusion regarding the complicity of the petitioner with the offence involved which can be done only after conclusion o....

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.... Collector of Central Excise Vs. Dunlop India Ltd., (1985) 1 SCC 260; (ii) State of Gujarat Vs. Mohanlal Jitamalji Porwal & Anr., (1987) 2 SCC 364; (iii) Indru Ramchand Bharvani & Ors. Vs. Union of India & Ors., (1988) 4 SCC 1; (iv) United Bank of India Vs. Satyawati Tondon & Ors., (2010) 8 SCC 110; (v) Phoenix ARC Private Ltd. Vs. Vishwa Bharati Vidya Mandir & Ors., (2022) 5 SCC 345; (vi) State of Andhra Pradesh Vs. S. Pitchi Reddy, (2022) 2 SCC 569. 21. In the case of Dunlop India Ltd. (supra), the Hon'ble Supreme Court has held as follow: "3. In Titaghur Paper Mills Co. Ltd. v. State of Orissa A.P. Sen, E.S. Venkataramiah and R.B. Misra, JJ. held that where the statute itself provided the petitioners with an efficacious alternative remedy by way of an appeal to the Prescribed Authority, a second appeal to the tribunal and thereafter to have the case stated to the High Court, it was not for the High Court to exercise its extraordinary jurisdiction under Article 226 of the Constitution ignoring as it were, the complete statutory machinery. That it has become necessary, even now, for us to repeat this admonition is indeed a matter of tragic concern to us. Article 226 i....

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....on." 23. In the cases of Satyawati Tondon & Ors. (supra) as well as Phoneix (supra), the Hon'ble Supreme Court has discussed the aspect of maintainability of a writ petition. For ready reference, the relevant discussion made in the case of Phoenix (supra) is extracted herein below:- "In Satyawati Tondon, it was observed and held by this Court that the remedies available to an aggrieved person against the action taken under Section 13(4) or Section 14 of the SARFAESI Act, by way of appeal under Section 17, can be said to be both expeditious and effective. On maintainability of or entertainability of a writ petition under Article 226 of the Constitution of India, in a case where the effective remedy is available to the aggrieved person, it is observed and held in the said decision in paras 43 to 46 as under : "43. Unfortunately, the High Court overlooked the settled law that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person and that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and ....

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.... (sic will) ultimately prove detrimental to the economy of the nation. Therefore, the High Court should be extremely careful and circumspect in exercising its discretion to grant stay in such matters. Of course, if the petitioner is able to show that its case falls within any of the exceptions carved out in Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad, Whirlpool Corpn. v. Registrar of Trade Marks and Harbanslal Sahnia v. Indian Oil Corpn. Ltd. and some other judgments, then the High Court may, after considering all the relevant parameters and public interest, pass an appropriate interim order." 24. In the case of S. Pitchi Reddy (supra), the Hon'ble Supreme Court has held as under: "Firstly, the High Court ought not to have directly entertained the writ petitions challenging the fresh assessment orders. The respective dealers assessees ought to have availed the alternative remedy of appeals before the first appellate authority which were availed earlier when the earlier assessment orders were passed." 25. Shri Garodia, learned counsel for the petitioner in his reply has submitted that the basis of the investigation emanates from a "casual informer". He therefor....

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....However, a perusal of the materials would show that the impugned action is preceded by a subjective satisfaction arrived at by the competent authority based upon information received regarding commission of an offence. The said condition precedent has also been substantiated by recovery of 800 bags of areca nuts which have been stated to be of foreign (Myanmar) origin. 31. Shri Keyal, the learned Standing Counsel in his argument has vehemently contended and objected to the maintainability of the writ petition itself on the ground of availability of alternative remedy. Though availability of an alternative remedy may be a bar against invocation of the writ jurisdiction, such bar cannot be construed to be an absolute bar and as held by the Hon'ble Supreme Court, including in the case of M/s. Whirlpool Corporation (supra), under certain circumstances, like jurisdictional error, lack of bona fide and apparent violation of the principles of natural justice, such writ petition can be entertained. 32. In the instant case, however, none of the exceptions carved out in the case of M/s. Whirlpool Corporation (supra) appears to be present in favour of the petitioner. The competence of t....