Dindayal Industries Limited Through Director Anand Mohan Chhaparwal vs. Commissioner Of Cgst Customs And Central Excise

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WP/17831/2021HC Madhya Pradesh29 October 2021Author: HON'BLE SHRI JUSTICE ROHIT ARYA4 pages
For Petitioner: Sanjay Kumar Dwivedi
AI SummaryDismissed

What did the High Court hold?

The High Court held that there was no explanation for the petitioner's failure to avail the statutory remedies of appeal within the prescribed periods for both the assessment order and the order rejecting the remission application. The Court noted that the petitioner had attempted to club two independent causes of action, both of which were appealable under the Central Excise Act. The Court found that challenging the assessment order under Article 226, under the pretext of challenging the remission rejection order, was not permissible. Furthermore, the Court observed that the contentions advanced by the petitioner were factual in nature, requiring adjudication by the appropriate adjudicating authority rather than by the High Court in its extraordinary constitutional jurisdiction. The Court concluded that the petitioner's course of action amounted to a misuse of the process of law, disentitling them from invoking the equitable jurisdiction under Article 226. Consequently, the writ petition was dismissed as lacking merit.

What were the facts?

Dindayal Industries Limited (the petitioner) filed a writ petition before the High Court of Madhya Pradesh challenging an order dated 29.11.2018 passed by the Assistant Commissioner, Division No.1, Gwalior, under Section 11-A of the Central Excise Act, confirming a central excise duty demand of Rs.35,07,936/-. The petitioner had not filed an appeal against this order within the prescribed limitation. Subsequently, the petitioner filed an application for remission of duty on 27.12.2019, alleging a fire in the factory in 2016. This remission application was dismissed on 23.9.2021. The writ petition, filed after three years, sought to challenge both the assessment order and the order rejecting the remission application. The respondents sought dismissal of the writ petition on grounds of alternative statutory remedy and limitation.

What were the issues?

1. Whether the High Court, in its extraordinary constitutional jurisdiction under Article 226, can entertain a writ petition challenging an assessment order when the statutory remedy of appeal under Section 35(1) of the Central Excise Act has not been availed within the period of limitation? (Question of law and fact, concerning Section 11-A and Section 35(1) of the Central Excise Act). 2. Whether the High Court can entertain a writ petition challenging an order rejecting a remission application filed under Rule 17 of the Central Excise Rules, 2002, when such an order is also appealable under Section 35-B of the Central Excise Act and the application was filed significantly beyond the prescribed limitation? (Question of law and fact, concerning Rule 17 of the Central Excise Rules, 2002 and Section 35-B of the Central Excise Act). Assessee's Contentions: The petitioner sought to challenge the assessment order and the order rejecting the remission application, and sought a mandamus to consider the remission application. The petitioner also amended the petition to challenge the order disallowing the remission application. Revenue's Contentions: The respondents argued that the writ petition was not maintainable because (i) an appeal lay under Section 35(1) of the Excise Act against the assessment order, (ii) there was no jurisdictional error or illegality warranting interference under Article 226, and (iii) the statutory remedy of appeal was foreclosed by limitation. They relied on the Supreme Court judgment in Assistant Commissioner (CT) LTU, Kakinada & Ors. v. M/s Glaxo Smith Kline Consumer Health Care Limited, which held that High Courts cannot issue writs inconsistent with legislative intent or in disregard of limitation periods.

Which sections of the Income-tax Act were involved?

Section 11-A,Section 35(1),Section 35-B

AI-generated summary — verify with the full judgment below

1 WP. 17831/2021 The High Court of Madhya Pradesh Writ Petition No. 17831/2021 (Dindayal Industries Limited through Director Vs. Commissioner of CGST & Another)

Gwalior dated 29.10.2021 Shri Soumyadeep Dwivedi, learned counsel for the petitioner.

Shri Praveen Surange, learned counsel for the respondents.

Petitioner, Dindayal Industries Ltd., is before this Court taking exception to the impugned order dated 29.11.2018 passed by the Assistant Commissioner, Division No.1, Gwalior, in exercise of the powers under Section 11-A of the Central Excise Act confirming the central excise duty amounting to Rs.35,07,936/-.

Undisputedly, no appeal has been filed against this order within the prescribed limitation and even uptil filing of this writ petition. In clause 4 of the format of writ petition, there is no explanation for the delay in filing this petition challenging the impugned order after three years. That apart, the petitioner alleged to have filed an application for remission as late as on 27.12.2019 in relation to the alleged fire which broke out in the factory in the year 2016. The application is filed as Annexure P/11 dated 27.12.2019 at page 43. Now, in this petition, the petitioner seeks to challenge the aforesaid impugned order dated 29.11.2018 as well as seeking mandamus in the form of direction to the respondents to consider the 2 WP. 17831/2021 application for remission. By way of amendment, the order passed in the remission application dated 23.9.2021 has also been put to challenge. As such, the petitioner has joined different cause of actions independent of each other viz, the order dated 29.11.2018 and the order disallowing the remission application dated 23.9.2021. An application vide I.A.No.13724/2021 has been filed by the respondents/department on notice seeking dismissal of the writ petition as not maintainable on grounds namely, – (i) an appeal lies under Section 35(1) of the Excise Act against the order of assessment dated 29.11.2018; (ii) the assessing officer has framed the assessment on merits upon critical evaluation of material placed before him.

Neither there is any jurisdictional error or illegality of the nature warranting interference in extraordinary constitutional jurisdiction under Article 226 of the Constitituion of India; (iii) the writ petition also cannot be entertained only for the reason that the statutory remedy of appeal against the impugned order stood foreclosed by law of limitation. Learned counsel bolsters his submissions relying upon the judgment of Hon'ble Supreme Court in Civil Appeal No. 2412/2020 (Assistant Commissioner (CT) LTU, Kakinada & Ors. v. M/s Glaxo Smith Kline Consumer Health Care Limited) decided on 6.5.2020. Hon'ble Supreme Court while allowing the appeal and setting aside the judgment of Telangana High Court held that though the High Courts have wide powers, it cannot issue a writ which is 3 WP. 17831/2021 inconsistent with the legislative intent of the concerned Statute and in utter disregard of the period of limitation. Besides, such recourse adopted by the High Court shall render the legislative scheme and intendment of the concerned provision otiose.

The application for remission filed under Rule 17 of the Central Excise Rules, 2002 seeking remission of the central excise duty of Rs. 35,07,936/- leviable on the finished goods allegedly destroyed in fire accident in its factory on 3.6.2016 was filed as late as on 27.12.2019, i.e., more than three years and much beyond the period of limitation of six months and in the meantime the demand of central excise duty has been confirmed vide order dated 29.11.2018. The application dated 27.12.2019 also stood dismissed on 23.9.2021 by the Assistant Commissioner (Technical), CGST & Central Excise, Bhopal.

Heard.

There is no explanation forthcoming for not availing statutory remedy available under the Act against the impugned two actions within the prescribed period of limitation. That apart, the petitioner has made a vain attempt to club the impugned order dated 29.11.2018 passed under Section 11-A of the Central Excise Act and the order dated 23.9.2021 rejecting the application for remission of excise duty though both the orders besides being appealable under Section 35(1) and 35-B of the Excise Act respectively give rise to independent cause of action. Under the pretext of challenging the order rejecting 4 WP. 17831/2021 remission of duty, the challenge to impugned order of assessment of excise duty cannot be entertained under Article 226 of the Constitution of India. In fact the course of action adopted by the petitioner tantamounts to misuse of process of law disentitling to invoke equitable jurisdiction under Article 226 of the Constitution of India. Even otherwise, the contentions advanced in fact and in effect are in realm of facts including that of the alleged challenge to the authority to decline remission and require adjudication on facts. The same could be addressed by the adjudicating authority and not by this Court in extraordinary constitutional jurisdiction.

In view of the aforesaid facts and circumstances, writ petition sans merit and is hereby dismissed. (Rohit Arya) (Deepak Kumar Agarwal)

Judge Judge (yog) VALSALA VASUDEVAN 2018.10.26 15:14:29 -07'00' YOGESH VERMA 2021.10.29 18:32:39 +05'30'

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