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PUNJAB & HARYANA HIGH COURT
A.N.Grover, J.
Ranchodbhai M. Patel
Versus
Central Board Of Revenue, New Delhi
C.W. No. 288 of 1960,
Decided On : MAY 30, 1962
CENTRAL EXCISE - Quasi-judicial proceedings - Cross-examination of Panchas - Natural justice - Order of Central Board of Revenue - Judicial order - Reasons for rejection of appeal.
Fact of the Case:
The petitioner, a tobacco merchant, challenged the order of the Collector of Central Excise, Bombay, imposing a penalty and fine for alleged contravention of Central Excise Rules. The petitioner contended that he was denied an opportunity to cross-examine the Panchas who had signed the Panchnamas during the inspection of his warehouses, violating the principles of natural justice. He also challenged the order of the Central Board of Revenue, which upheld the Collector's order, on the ground that it was not a judicial order as it lacked reasons for rejecting the appeal.
Finding of the Court:
The court held that the proceedings before the Collector were quasi-judicial in nature, and the petitioner was entitled to cross-examine the Panchas whose statements were used against him. However, the court found that the petitioner had deliberately suppressed the fact that he had signed most of the Panchnamas, and there was no evidence that manifest injustice resulted from the denial of cross-examination. The court also held that the order of the Central Board of Revenue was not a judicial order as it lacked reasons for rejecting the appeal.
Issues: 1. Whether the petitioner was denied an opportunity to cross-examine the Panchas, violating the principles of natural justice. 2. Whether the order of the Central Board of Revenue was a judicial order.
Ratio Decidendi: 1. The court held that the proceedings before the Collector were quasi-judicial in nature, and the petitioner was entitled to cross-examine the Panchas whose statements were used against him. However, the court found that the petitioner had deliberately suppressed the fact that he had signed most of the Panchnamas, and there was no evidence that manifest injustice resulted from the denial of cross-examination. 2. The court held that the order of the Central Board of Revenue was not a judicial order as it lacked reasons for rejecting the appeal.
Final Decision: The petition was allowed to the extent that the order of the Central Board of Revenue was quashed. The court directed the Central Board of Revenue to rehear and dispose of the appeal in accordance with law.
1. This is a petition under Articles 226 and 227 of the Constitution in which the facts may briefly be stated. The petitioner is a tobacco merchant who has his warehouses at Andheri and Jogeshwari within Greater Bombay. He holds Central Excise Licences in forms L5 and L2 for the purpose of storing and selling non-duty paid and duty paid Indian unmanufactured tobacco. It is alleged in the petition that certain officers of the Preventive Branch of the Central Excise, Directorate of Bombay visited the premises and warehouses of the petitioner from 29th June, 1955 to 23rd July, 1955. According to them the tobacco bags had not been stacked in proper order. They carried out the inspection of marks and numbers and variety of each bag. It is stated in paragraph 2 of the petition that the petitioner was away from Bombay on the 29th June, 1955. When these inspections were made Panchnamas were drawn up. The Panchas were called upon to give their opinion regarding the variety and quality of tobacco in these bags. On the basis of the opinion of the Panchas the inspecting officers alleged that certain bags of tobacco were removed from the warehouse without payment of duty and certain bags were received in the warehouse without transport documents. A provisional demand letter for Rs. 1,12,523-11-0 on account of the Central Excise duty was served on the petitioner under the instructions of the Collector pending final adjudication. It appears that the petitioner failed to deposit the duty demanded from him and it was proposed to auction the tobacco which had been detained from recovery of the amount demanded. The petitioner thereupon filed a petition in the High Court at Bombay (Miscellaneous Application No. 98 of 1956). This petition was dismissed by a learned Single Judge of that Court on 12th April, 1956. It may be mentioned that an appeal was filed by the petitioner before a Division Bench but in the meantime he represented his case to the Central Board of Revenue. Subsequently, the appeal which the petitioner had filed was not pressed by him and he withdrew the same. All these facts were not stated in the petition but they are contained in the return filed by the respondents.
2. The Collector, Central Excise, Bombay, issued a show-cause notice, dated 4th April, 1956 (Exhibit A). In this notice, contravention of various Central Excise Rules was alleged but for the purpose of the present petition it is necessary to refer only to the alleged contravention of clauses (d) and (c) of Rule 151. It was stated that the petitioner had
"(i Privately removed 1721 packages of tobacco weighing 1,64,461 pounds not from the two branches of his warehouses at Andheri and Jogeshwari. (ii Warehoused 1,107 packages of tobacco otherwise than as provided by the Central Excise Rules, 1944." In a letter dated 13th April, 1956 (Exhibit B) the petitioner demanded that the original records should be shown to him. It was further stated by him that he wanted to cross-examine certain officers of the Central Excise mentioned in the letter. He also wanted to cross-examine the Panchas who had signed the Panchnamas from 29th June, 1955, to 23rd July, 1955 and a request was made that they should be asked to bring with them their bill books, account books and other documents relating to the days on which they had attended. The Collector wrote a letter, dated 7th May, 1956 (Exhibit C), saying inter alia that the cross examination of the Panchas could not be allowed. After giving necessary hearing to the petitioner the Collector made an order on the 14th November, 1956. One of the objections raised before him by the petitioner was that the examination of the stock in the warehouses had not been done in the presence of the Panchas. The Collector, however, recorded a finding that the licensee, that is, the petitioner himself had signed the Panchnamas drawn from day-to-day and that fact had not been denied by him. Consequently, it was idle on his part to plead that
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