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IN THE HIGH COURT OF DELHI AT NEW DELHI
Yashwant Varma, Dharmesh Sharma, JJ.
Indian Oil Corporation Ltd. – Appellant
Versus
Director of Legal Metrology & Ors. – Respondents
LPA 587 of 2019, CM APPL. 40507 of 2019(Direction), CM APPL. 45228 of 2019 (Clarification of O.D.11-09-2019)
Decided On : 13-07-2023
Compounding Fee - Legal Metrology Act 2009 - Section 19, Rule 15 - The court allowed the appeal and held that the appellants were not liable to pay the compounding fee as they were not found punishable of any offence under the Legal Metrology Act 2009. The court emphasized that the compounding fee is not in the nature of a tax or duty and should not be viewed as an acceptance of guilt or violation of a statutory obligation. The court also held that the State cannot retain monies which are not payable under the provisions of the Act.
Fact of the Case:
The appellants imported fuel dispensing equipment without obtaining registration as required under Section 19 of the Legal Metrology Act 2009. They deposited compounding fee consequent to demands raised by the respondents. The Single Judge refused to frame a direction for refund of the compounding fee.
Finding of the Court:
The court found that the appellants were not liable to pay the compounding fee as they were not found punishable of any offence under the Legal Metrology Act 2009. The court also held that the State cannot retain monies which are not payable under the provisions of the Act.
Issues: The main issue was whether the appellants were liable to obtain registration under Section 19 of the Legal Metrology Act 2009 and whether they were entitled to a refund of the compounding fee.
Ratio Decidendi: The court held that the appellants were not liable to pay the compounding fee as they were not found punishable of any offence under the Legal Metrology Act 2009. The court emphasized that the compounding fee is not in the nature of a tax or duty and should not be viewed as an acceptance of guilt or violation of a statutory obligation. The court also held that the State cannot retain monies which are not payable under the provisions of the Act.
Final Decision: The appeal was allowed, and the court set aside the judgment and order to the extent that it refused the refund of the compounding fee. The respondents were held liable to refund the compounding fee paid by the appellants.
JUDGMENT
CM APPL. 45157/2019 (32 Days Delay in filing the appeal) in LPA 662/2019 and CM APPL. 45204/2019 (48 days delay in the filing of the appeal) in LPA 664/2019
Bearing in mind the disclosures made, the delay of 32 days and 48 days in filing LPA 662/2019 and LPA 664/2019 respectively is condoned.
The applications shall stand disposed of.
LPA 587/2019, CM APPL. 40507/2019 (Direction), CM APPL. 45228/2019 (Clarification Of O.D.11-09-2019), LPA 662/2019, CM APPL. 45156/2019 (Direction) and LPA 664/2019, CM APPL. 45203/2019 (Direction)
1. These Letters Patent Appeals impugn the judgment and order dated 24 July 2019 limited to the extent of the learned Single Judge having refused to frame a direction for refund of compounding fee that had been deposited by the appellants herein. For the purposes of considering the challenge that stands raised, it would be apposite to notice the following facts.
2. All the appellants had imported fuel dispensing equipment from M/s Dresser Wayne Fuel Equipment (Shanghai) Co. Ltd. and M/s Tatsuno for use at various retail outlets situate throughout the country. The units were imported without obtaining the registration as contemplated under Section 19 of the Legal Metrology Act 2009 [2009 Act]. The respondents appear to have thus taken the stand that the appellants had failed to comply with the provisions of the 2009 Act and consequently drew proceedings against the appellants. In the course of those proceedings, the appellants also deposited compounding fee consequent to demands raised by the respondents.
3. The learned Single Judge firstly took up for consideration the question of whether the appellants were liable to obtain registration under Section 19 of the 2009 Act. While answering that issue, the learned Single Judge in paragraphs 19 & 20 entered the following findings:
"19. The next question to be examined is whether the petitioners are required to be registered under Section 19 of the Act. Section 19 of the Act is set out below:
"19. Registration for importer of weight or measure.-No person shall import any weight or measure unless he is registered with the Director in such manner and on payment of such fees, as may be prescribed.
20. A plain reading of the language indicates that import of any weight or measure is proscribed unless the person importing the same is registered with the Director of Legal Metrology. However, Rule 15 of the Legal Metrology (General) Rules, 2011 indicates that such registration is only required by a manufacturer or dealer of weights or measure. Rule 15 of the said Rules is set out below:
"15. Registration of Importer.-(1) Every manufacturer or dealer of weight or measure who intends to import any weight or measure shall apply to the Director, through the Controller of the State in which he carries on such business, for registration of his name as importer in the form' specified in Tenth Schedule.
(2) Every application received by the Controller under sub-rule (1) shall be forwarded by him to the Director with a report as to the antecedents and technical capabilities of the applicant.
(3) Nothing in this rule shall take away or abridge the right of any person referred to in sub-rule (2) to carry on the business of importing of any weight or measure until he has been informed by the Director in writing that he cannot be registered as an importer, and on receipt of such letter he shall stop forthwith the import of any weight or measure:
PROVIDED that registration of a person carrying on, at the commencement of these rules, the business of importing weights or measures shall not be refused except after giving him a reasonable opportunity of showing cause against the proposed action.
(4) Every application for the registration of an importer shall be submitted to the Director, in the manner aforesaid, together with the fee specified in Twelfth Schedule, at least one month before the date on which import is proposed to be made.
(5) The registration of a person as an importer
The compounding fee for violations under the Legal Metrology Act must not exceed the maximum fines prescribed for such offences, as established in Section 48(3).
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