TaxTMI 
TaxTMI 
1991 (1) TMI 136
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....ntral Excise Rules, 1944 ('the Rules' hereafter) on 64,444 kgs. of VFC Farmash Tobacco removed from his warehouse and not accounted for in the warehouse register maintained under the Rules. The respondent was also asked to show cause why penalty should not be imposed for infraction of Rules 151 and 32(1) of the Rules for illicit removal of the aforementioned quantity of tobacco. This show cause notice was founded on the allegation that in 1970 the respondent obtained six transport permits (T.P. 2) dated January 13, 1970, February 10, 1970, March 26, 1970, May 16, 1970, July 24, 1970 and August 5,1970 and transported under each permit more than the quantity of tobacco allowed thereunder in contravention of the aforementioned rules. The respondent sent a detailed reply to the said show cause notice on November 4, 1972. After giving a personal hearing to the respondent on September 18,1973, the appellant came to the con1clusion that the respondent had evaded payment of duty on 1272 bags weighing 48,304 kgs. of VFC Farmash tobacco and issued a demand under Rule 160 in the sum of Rs. 1,....
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....ny order passed in good faith or any act in good faith done or ordered to be done under the Act. The second sub-section pres.c.ribes a period of limitation for suits, prosecutions and other legal proceedings instituted, lodged or taken for anything done or ordered to be done under the Act. That is why in Public Prosecutor, Madras v. R. Raju & Anr. Etc. -1978 (2) E.L.T. (J 410) (S.C.) = (1973) S.C.R 812 it was urged on a conjoint reading of the two subsections that sub-section (2) applied only to Government and could not come to the res.c.ue of a tax payer. Rejecting this contention this Court held : "The two sub-sections operate in different fields. The first sub-section contemplates bar of suits against the Central Government or against the officers by protecting them in respect of orders passed in good faith or acts done in good faith. It is manifest that the second sub-section does not have any words of restriction or limitation of class of persons unlike sub-section (1). Sub-section (2) does not have any words of qualification as to persons. Therefore, sub-section (2) is applicable to any individual or person." Thus the appellant's contention that sub-section (2) was conf....
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....ons 511 and 109,1.P.C. The respondents pleaded the bar of Section 40 of the Act as it then stood. The High Court upheld the contention that the prosecution was barred by the rule of limitation incorporated in Section 40 as the same was instituted after the expiry of six months from the date of the commission of the alleged offences. This Court on the aforesaid line of reasoning affirmed the High Court's decision. 5. But the question is whether the issuance of a show cause notice and the initiation of the consequential adjudication proceedings can be des.c.ribed as 'other legal proceedings' within the meaning of sub-section (2) of Section 40 of the Act? If the said departmental action falls within the expression 'other legal proceeding' there can be no doubt that the action would be barred as the same indisputably was initiated six months after the accrual of the cause of action. So the crucial question is whether the issuance of the show cause notice dated August 30,1972 and the passing of the impugned order in adjudication proceedings emanating therefrom constitutes 'other legal proceeding' within the meaning of Section 40(2) of the Act to fall within the mis.c.hief of that sub....
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....rds. 7. There can be little doubt that the words 'other legal proceeding' are wide enough to include adjudication and penalty proceedings under the Act. Even the learned Additional Solicitor General did not contend to the contrary but what he said was that since this wide expression is preceded by particular words of a certain genus, namely, words indicating reference to proceedings taken in courts only, the wide words must be limited to things ejusdem generis and must take colour from the preceding words and should, therefore, receive a limited meaning to exclude proceedings of the type in question. There can be no doubt that 'suit' or 'prosecution' are those judicial or legal proceedings which are lodged in a court of law and not before any executive authority, even if a statutory one. The use of the expression 'instituted' in Section 40(2) strengthens this belief. Since this sub-section has been construed by this Court in Raju's case (supra) not to be confined in its application to only Government servants but to extend to others including the assessees and since the words 'for anything done or ordered to be done under this Act' are found to be comprehensive enough to include....