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1975 Supreme(Del) 225

High Court Of Delhi
HINDUSTAN ALUMINIUM CORPORATION LIMITED - Appellant
Versus
CONTROLLER OF ALUMINIUM - Respondent
Civil 1104 of 1975
Decided On : 12/17/1975

Advocates Appeared:
ANIL BHATNAGAR, F.S.NARIMAN, G.V.G.Krishnamurthy, N.R.Khaitan, O.P.KHAITAN, O.P.RANA, P.V.KAPUR, R.K.GARG, SOLI J.SORABJI

Headnote:

ESSENTIAL COMMODITIES ACT, 1955 - SECTIONS 6-A, 6-B, 6-C - ALUMINIUM (CONTROL) ORDER, 1970 - CLAUSES 9, 10, 11 - SEIZURE OF ALUMINIUM - SHOW CAUSE NOTICE - CONFISCATION - VALIDITY - REASON TO BELIEVE - APPLICATION OF MIND - EXCESSIVE SEIZURE - QUASHING OF SEIZURE AND SHOW CAUSE NOTICE.

Fact of the Case:

The petitioner, a manufacturer of aluminium, challenged the show cause notice issued by the Collector of Mirzapur for confiscation of 2032.512 M. Tons of aluminium seized by the Superintendent of Central Excise on the ground of contravention of the Aluminium (Control) Order, 1970. The petitioner contended that the seizure was illegal as the Superintendent did not have a reason to believe that the contravention had taken place and that the seizure of the entire stock was excessive.

Finding of the Court:

The Court held that the seizure was illegal as the Superintendent of Central Excise did not have a reason to believe that the contravention of the Control Order had taken place. The Court found that the Superintendent had seized the entire stock of aluminium, including the stock that had been sold and dispatched before the seizure, and that this was excessive. The Court also held that the show cause notice issued by the Collector was quashed as it was based on the illegal seizure.

Issues: 1. Whether the seizure of aluminium by the Superintendent of Central Excise was legal.

Ratio Decidendi: 1. The seizure of aluminium was illegal as the Superintendent of Central Excise did not have a reason to believe that the contravention of the Control Order had taken place.2. The seizure of the entire stock of aluminium, including the stock that had been sold and dispatched before the seizure, was excessive.

Final Decision: The Court quashed the seizure of aluminium and the show cause notice issued by the Collector.

S. RANGARAJAN, J

( 1 ) THE petitioner company, which manufactures aluminium, has filed this petition under Article 226 of the Constitution to quash the show cause notice dated 21-8-75 (copy of which is Annexure Z to the petition) issued by the Collector of Mirzapur (R-5), giving the petitioner an opportunity of making a representation and of being heard concerning why 2032. 512 M. Tons of aluminium which was seized by the Superintendent of Central Excise SRP II (R-3) on 16th/17th July, 1975 should not be confiscated. for contravention of the orders referred to in the said notice.

( 2 ). After issuing a notice to the respondents to show cause why this Writ Petition should not be admitted the learned counsel for the petitioner and the learned counsel for the respondents were heard. It was felt the petition required examination; it was admitted and the respondents were given an opportunity to file further retunis and the petitioner also to file further rejoinder. Having regard to nearly rupees two crores worth of aluminium, said to be a scarce metal, having been seized and since holding up such huge stocks of this metal at the present moment would not be in the national interest this Writ Petition was, as requested by both sides, heard very early; the learned counsel on both sides were heard further at considerable length.

( 3 ). The facts leading to this petition may now be noticed. Aluminimn is an essential commodity under the Essential Commodities Act, 1955 (hereinafter called the Act ). Under the said Act the Central Government made an order called the Aluminium (Central) Order, 1970 (hereinafter referred to as the Control Order ). The Central Government introduced, on 3-10-1974, clause 5-A, under the power conferred on it under section 3 of the Act, giving the Central Government power to regulate production, supply of distribution of aluminium. By another order, contained in the Notification dated 5th October 1974, the Central Government directed that no producer or manufacturer of aluminium shall undertake production or engage in the supply or distribution of any or all forms of aluminium specified in the Schedule of the Control Order except to the extent and in the manner specified by the Central Government or Controller or or the authorised officer in pursuance of clause 5-A. The first respondent is the authority appointed by the Central Government for the purpose of the Control Order. A certain procedure was prescribed with regard to provisions of clause 5-A which the first respondent had to follow.

( 4 ). By an order dated 15-7-1975 the Central Government amended various clauses of the said Control Order; yet another order of the same date had amended clause 9 of the said Control Order. By two separate orders of the same date the Central Government provided for levy and free sale of aluminium and also fixed sale price of levy of aluminium. The relevant provisions of the Control Order would be noticed later; it would, however, be appropriate to notice even at the outset that introduction of clause 9 and the fixing of prices became necessary on account of the anticipated rise in prices of various types of aluminium; even in March 1975 there had been a rise of about Rs. 400 per ton. On the 28th of May 1975 the Financial Express had published a news about the anticipated still higher price rise in aluminium. The excise authorities were authorised on 15th of July 1975 to exercise powers of seizure under the Aluminium Control Order.

( 5 ). The excise officials as well as the Controller of Aluminium and his staff seemed to have worked in close collaboration. From and after the 15th of July 1975 the excise officials of the rank of Superintendent of Central Excise and above were authorised to make seizure of stocks of aluminium with held from sale.

( 6 ). On the 1st of July 1975 the third respondent visited the petitioner s aluminium factory at Renukoot as per the personal instructions given to him by the Assistant Collector of E
































































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