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IN THE HIGH COURT OF RAJASTHAN
Sanjeev Prakash Sharma, J.
United Spirits Limited - Appellant
Versus
State Of Rajasthan And Others - Respondent
Civil Writ No. 369 of 2016, 370 of 2016, 371 of 2016, 432 of 2016, 433 of 2016, 435 of 2016, 436 of 2016, 1617 of 2016, 1618 of 2016, 1619 of 2016, 1620 of 2016, 1621 of 2016, 1622 of 2016, 1623 of 2016, 1624 of 2016, 1632 of 2016, 1633 of 2016, 1634 of 2016, 1635 of 2016, 2241 of 2016, 2242 of 2016, 2243 of 2016, 2244 of 2016, 2247 of 2016, 2248 of 2016, 2887 of 2016, 2888 of 2016, 2889 of 2016, 2890 of 2016, 2891 of 2016, 2892 of 2016, 2893 of 2016, 2894 of 2016, 2895 of 2016, 2896 of 2016, 2897 of 2016, 2898 of 2016, 3031 of 2016, 3173 of 2016, 3182 of 2016, 3184 of 2016, 3185 of 2016, 3186 of 2016, 3187 of 2016, 3188 of 2016, 3189 of 2016, 3190 of 2016, 3193 of 2016, 3195 of 2016, 3200 of 2016, 3245 of 2016, 3246 of 2016, 3247 of 2016, 3248 of 2016, 3249 of 2016, 3250 of 2016, 3376 of 2016, 3377 of 2016, 3378 of 2016, 3379 of 2016, 3380 of 2016, 3381 of 2016, 3382 of 2016, 3383 of 2016, 3384 of 2016, 3385 of 2016, 3431 of 2016, 3432 of 2016, 3434 of 2016, 5437 of 2016, 5446 of 2016, 5449 of 2016, 5451 of 2016, 5457 of 2016, 6667 of 2016, 6668 of 2016, 6669 of 2016, 6671 of 2016, 6672 of 2016, 6673 of 2016, 6674 of 2016, 6675 of 2016, 8435 of 2016, 8445 of 2016, 8468 of 2016, 9018 of 2016, 9111 of 2016, 10741 of 2016, 10823 of 2016, 440 of 2017, 442 of 2017, 444 of 2017, 452 of 2017, 453 of 2017, 454 of 2017, 1998 of 2017, 1999 of 2017, 2858 of 2017, 2859 of 2017, 2865 of 2017, 2934 of 2017, 2936 of 2017, 2937 of 2017, 2952 of 2017, 3050 of 2017, 3094 of 2017, 3579 of 2017, 3582 of 2017, 3682 of 2017, 6222 of 2017, 12586 of 2017, 15578 of 2017, 16123 of 2017, 4602 of 2018, 7638 of 2018, 1228 of 2019, 1255 of 2019, 1256 of 2019, 1257 of 2019, 1259 of 2019, 1260 of 2019, 1279 of 2019
Decided On : 11-03-2019
EXCISE - COMPOUNDING OF OFFENCES - SECTION 70 OF THE RAJASTHAN EXCISE ACT, 1950 - PENALTY AMOUNT - ASSESSMENT - ARBITRARINESS - GUIDING PRINCIPLES - JUDICIAL REVIEW.
Fact of the Case:
The petitioners challenged the Excise Commissioner's decision to impose a penalty while compounding offenses under Section 70 of the Rajasthan Excise Act, 1950. They argued that the penalty amount and the alleged revenue loss were arbitrary and without basis.
Finding of the Court:
The court held that the assessment of the penalty amount and the revenue loss was not arbitrary and was based on relevant data and tests conducted by the Excise Inspector. However, the court found that the Excise Commissioner did not provide reasons for the assessment and remanded the matters back to the Excise Commissioner for a fresh decision.
Issues: 1. Whether the penalty amount and the alleged revenue loss were arbitrary and without basis? 2. Whether the Excise Commissioner provided reasons for the assessment?
Ratio Decidendi: 1. The court held that the assessment of the penalty amount and the revenue loss was not arbitrary and was based on relevant data and tests conducted by the Excise Inspector. 2. The court found that the Excise Commissioner did not provide reasons for the assessment and remanded the matters back to the Excise Commissioner for a fresh decision.
Final Decision: The court set aside the impugned orders and directed the Excise Commissioner to pass fresh orders on the applications under Section 70 of the Act of 1950. The Excise Commissioner was directed to provide reasons for the assessment and give the petitioners an opportunity of hearing before passing the fresh orders.
JUDGMENT
Sanjeev Prakash Sharma, J. - The petitioners in all these writ petitions have raised a common question of law and, therefore, all the writ petitions are being heard together and finally disposed of at this stage.
2. The petitioners by way of all these writ petitions challenge a decision taken by the Excise Commissioner in imposing penalty, while compounding the offences under Section 70 of the Rajasthan Excise Act, 1950 (hereinafter referred to as the 'Act of 1950').
3. In the lead case, being CWP No. 369/2016 titled as "United Spirits Limited Vs. State of Rajasthan & Ors.", the order dated 17.11.2015 is under challenge whereby on an application moved for compounding of the offences, he has imposed compounding fees as Rs.1,00,000/- and has further added a sum of Rs.2,68,237/- for the alleged loss caused to the revenue, with a direction to deposit the total sum of Rs.3,68,237/- as an amount for compounding the offences. It has further been directed that if the amount is not deposited within 15 days, the proceedings as contemplated under Section 34(C) of the Act of 1950 as well as under Section 76(C) of the Rajasthan Excise Rules, 1956 would be taken.
4. Learned counsel appearing for the petitioners submits that the amount calculated for compounding fees as well as the amount of loss caused to the revenue is arbitrary and without any basis. It is a submission that under Section 58(C) of the Act of 1950, the penalty amount can be maximum of Rs.5,000/- and in view thereof, the compounding fees as well as the loss caused to the revenue is unjustified and without discussing any factual aspect. It is also a submission that in different cases relating to different companies, where allegations of same nature have been levelled, the amount of compounding fees as well as the loss of revenue has been assessed differently by the Excise Commissioner.
5. Learned counsel for the petitioners relies upon a judgment passed by the Supreme Court in the matter of P. Ratnakar Rao & Ors. Vs. Government of A.P. & Ors. , (1996) 5 SCC 359 to submit that the compounding fees ought not exceed the fine prescribed by the penal section, the same cannot be either exorbitant or irrational or bereft of guidance.
6. Per contra, learned counsel appearing for the respondents submits that the Excise Commissioner has passed the orders keeping in view of the provisions of Section 70 of the Act of 1950 and once the petitioners themselves agreed for compounding, a decision taken thereto has to be abided; and if the petitioners have any grievance relating to the amount fixed by the Excise Commissioner, they had an alternative remedy of filing an appeal which has not been availed of.
7. Learned counsel for the petitioners have also raised an objection relating to the loss of revenue assessed and submit that there was no such loss caused while learned counsel appearing for the Excise Department submits that the loss assessed by the Excise Commissioner is on the basis of the data which were available before him and the assessment of loss is on relevant data and the tests conducted by the concerned Excise Inspector relating to the various brands of IMFL.
8. I have considered the submissions made at bar by the learned counsel for the parties and also perused the material available on record.
9. It would be appropriate to quote Section 70 of the Act of 1950, which reads as under:-
"70. Power of Excise officers to compound offences- (1) Subject to such conditions and restrictions as may be prescribed, the Excise Commissioner or any other Excise Officer specially empowered by the State Government in that behalf may accept from any person whose licence, permit or pass is liable to be cancelled or suspended under this Act, or who is reasonably suspected of having committed an offence punishable under this Act, a sum of money [not less than Rs.5000/- but not exceeding 10 times of the annual licence fee in respect of manufacturing units/bonds and wholesale vends etc. and not more th
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