CHAPTER - VI

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Role of Judiciary

1. System of Judicial Courts and Indirect Taxes

Although an elaborate mechanism under Administrative

Law has been provided in the administration of justice in the

implimentation of indirect taxes in India, by way of departmental

adjudication, appeals, review and revision alongwith appeals

before the Customs Excise and Service Tax Appellate Tribunal,

which is a quasi judicial body and an important organ in itself

having independent status , almost equal to the High Courts, but

the role played by the judicial courts is also very important one.

In this chapter an endeavour has also been made to specify the

trial cases for prosecution in criminal courts.

In certain cases where there is a deliberate attempt to

cheat the government or there is conspiracy to cheat, and evade

Central Excise duties or Customs duties and/or circumvent

Import Trade Control Regulations and the Foreign Exchange

Regulations, the provisions of S. 4201 and S. 120B2 of the Indian

1 D.D.Basu, Indian Penal Code 1860, Asoke K. Ghosh, Prentice-Hall of India

Private Limited, M-97, Cannaught Circus, New Delhi-110001,1997, p 252. 2 Id., p 93.

178

Penal Code, 1860 are also invoked in addition to the specific

provisions of the enactment concerned. Further in a joint trial, if

any of the accused is not available for trial due to any reason

(e.g. absconding), the charge/trial is separated against such

accused so that the trial against the rest of the persons can

continue.

2. Trial of cases by Judicial Magistrate First Class

The criminal cases instituted under Central Excise Act,

1944 and the Customs Act, 1962 are mostly warrant cases to be

tried by a Judicial Magistrate First Class (JMFC) or equivalent.

The procedure for trial of such cases which are instituted by

Central Excise and Customs Officers and not by Police officers

is laid-down in S. 244 to 247 of the Code of Criminal Procedure,

19733. The procedure for trial of summons cases is laid-down in

S. 251 to 259 of the said Act4.

3. Trial of Warrant Cases

The main features of trial of warrant cases are detailed as

follows:

3 D.D.Basu, Criminal Procedure Code 1973, 3rd ed.,(II), Asoke K. Ghosh, Prentice-Hall of India Private Limited, M-97, Cannaught Circus, New Delhi110001,1996, p 111-120.

4 Id., p 130-142.

179

(i) Evidence for prosecution

The procedures of tendering of the evidence by the

prosecution side is mainly governed by the provisions of S. 244

of the Criminal Procedure Code, 19735. The provisions of this

section are applicable in respect of cases instituted otherwise

than on a police report. When the accused appears or is brought

the Magistrate (after issue of process under sec. 204)6, the

Magistrate proceeds to hear the prosecution and takes all such

evidence as the prosecution may produce. The Magistrate may

summon any of the prosecution witnesses, if the prosecution

makes a request in this regard.

The prosecution is conducted by an Assistant Public

Prosecutor appointed by the Government under Sec.25 of the

Cr. P.C7. The Central Govt. may appoint an advocate who has

been in practice for not less than ten years, for the purpose of

any case or class of cases as a special public prosecutor, under

5 Id., p 111. 6 Id., p 22. 7 D.D.Basu, Criminal Procedure Code 1973, 3rd ed.,(I), Asoke K. Ghosh,

Prentice-Hall of India Private Limited, M-97, Cannaught Circus, New Delhi-110001,1996, p 69.

180

Sec. 24 (8) of the Cr. P.C8. Generally it is the special public

prosecutor who conducts the Central Excise and Customs

Criminal Cases.

The witnesses to be summoned are named or are

produced on the date fixed for trial by the prosecution.9 It is the

duty of the prosecution to bring before the court all persons who

are cited as its witnesses.10 The witness is examined on oath or

affirmation.

Further, if the prosecution does not call the witnesses to be

examined, without sufficient reason being shown, it is proper for

the Court to draw an inference adverse to the prosecution.11 It

has been observed that at many times, Government cases fail in

court of law. In view of this it is required from the officer in

charge of prosecution cell should ensure/secure the presence of

all relevant witnesses before the Court well in time but in practice

it is seen that the prosecution cell is accorded least significance

by the Central Board of Excise and Customs, as it has been

observed that these cells are termed as non sensitive postings,

8 Id., p 65. 9 Parveen v. Gangavishindas, 1979, Cr. L. J., p 279(Bom). 10 Ibid. 11 Municipal Board v. Raja Ram, 1970, Cr. L. J., p 112 (All).

181

where officers facing charge sheets in serious cases can be

posted12, and in practice have become parking slots for such

officers.

Seized/Confiscated goods or samples thereof as are of

material evidence are required to be produced before Court in

support of the case by the prosecution because the evidence

includes all that the prosecution produces in its support.

Examination and re-examination of the witness do also

come within the meaning of evidence.13 The accused has the

right to cross-examine the prosecution witness. Hence the

prosecution witness’s presence may be ensured if the defence

counsel desires to cross-examine14.

(ii) Accused may be discharged

The Magistrate is of the opinion he will discharge an

accused under the powers vested in him under S. 245 of the

12 Transfer/ placement policy of Group ‘A’ Officers of IRS (Customs and

Central Excise) issued vide F.No. A22011/03/2008-AD.II of CBEC. www.cbec.gov.in. visited on 15-01-2010.

13 Mahabir v. State, AIR, 1958, Orissa, p 11. 14 Ibid.

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Code of Criminal Procedure, 197315 after taking all the evidence.

He shall record the reasons for discharging the accused.16 Also if

he considers that no case against the accused has been made

out he can discharge the accused at this stage. The Magistrate

may discharge the accused at any previous stage of the case,17

if he considers the charge to be groundless.18 After examining

the witnesses for the prosecution the magistrate may examine

the accused or any of the accused, to determine whether the

accused person should be discharged or should be charged with

an offence.

(iii) Options before the Court

(a) Discharge the accused for reasons to be recorded. The

case is closed.

(b) Does not discharge and does not draw-up a charge. In

such a case, he proceeds to call upon the accused for a

defence and to make evidence for the defence. In the

final order, the Magistrate has to acquit the accused, if

he does not convict him. The Magistrate cannot frame a

charge now and call upon the accused to plead to it.

15 Supra note 3, p 113. 16 41st Report of the Law Commission of India vol. I, para 21.13. 17 Cricket Association v. State of West Bengal, AIR, 1971, SC, p 1925. 18 Bhanwar v. Kishori, 1977, Cr. L. J., p 1435 (Rajsthan).

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(iv) How to draw up a charge

In a warrant case the Magistrate should take the evidence

of the complainant and his witnesses, if necessary. After taking

the evidence he may examine the accused, then apply to the

criminal acts to determine whether there is a prima facie

evidence of the commission of the criminal acts. After this he will

frame charges and call on the accused to plead thereto, in order

to enter into defence.

(v) Discharge of accused

The procedure for discharging of the accused is provided

in S. 246 of the Criminal Procedure Code, 1973.19 The charge

may be framed in writing against the accused, if the magistrate

after taking evidence of the prosecution or at any previous stage

is of the opinion that there is ground for presuming that the

accused has committed the offence.

The charge is then read and explained to the accused. The

accused is asked whether he pleads guilty or has any defence to

make.

19 Supra note 3, p 117.

184

If the accused pleads guilty, the Magistrate records the

plea and convicts him. If the accused refuses to plead, or does

not plead or claims to be tried, the accused is asked at the time

of next hearing, whether he wishes to cross-examine any

witnesses for the prosecution.

If accused wishes to cross-examination, it is allowed and

then the witness is re-examined by the prosecution. Thereafter

evidence of any remaining witnesses for the prosecution is

examined, cross-examined, re-examined and then discharged.

(vi) Cross- examination:

The accused has, in law, an absolute right to cross-

examine the prosecution witnesses after the charge is framed,

but not so before the charge is framed. However, an opportunity

is always given to an accused to cross-examine the prosecution

witnesses before the charge.20

20 Namboodiri v. Unni, 1975 Cr. L. J., p 751(Kerala).

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4. Trial of Summon Cases

It has been provided that according to the provisions of S.

251 of Criminal Procedure Code, 197321 in the trial of summons

case, when the accused appears or is brought before the

Magistrate. The particulars of the offence is stated to the

accused,22 the accused is asked whether he pleads guilty or has

any defence to make but before asking this question, the

Magistrate should inform the accused of his right to legal

assistance.23 It is not necessary to frame a formal charge in this

case.

(i) Conviction on plea of guilty

The procedure for the conviction on the plea of guilty if

pleaded by the accused is given in S. 252 of the Criminal

Procedure Code, 1973.24 If the accused pleads guilty, it is so

recorded by the Magistrate and convicts the accused but before

asking this question, the Magistrate should inform the accused of

his right to legal assistance.25

21 Supra note 3, p 130. 22 State of Kerala v. Raman, AIR,1962, Kerala, p 78. 23 Hira Lal v. State of M.P., 1988, Cr. L. J., p 457 (MP). 24 Supra note 3, p 131. 25 Supra note 23.

186

(ii) Conviction on plea of guilty in absence of accused

in petty cases

According to the provisions of S. 253 of Criminal

Procedure Code, 197326 In petty cases, the accused may plead

guilty, without appearing before court and thereon the Magistrate

may convict the accused.

(iii) Procedures when not convicted

It has been provided that according to the provisions of S.

254 of Criminal Procedure Code, 197327 if the accused is not

convicted under S. 252 or S. 253 of this Act, the Magistrate will

hear the prosecution and take all the evidence for the

prosecution and hear the accused and take all the evidence in

his defence.28

(iv) Acquittal or conviction

It has been provided that according to the provisions of S.

255 of Criminal Procedure Code,29 upon taking the evidence for

prosecution and the defence, if the Magistrate finds the accused

26 Supra note 3, p 132. 27 Id., p 132. 28 Sirinivasa v. Radhamma, 1975, Cr. L. J., p 1287. 29 Supra note 3, p 134.

187

not guilty, he may acquit him. If the Magistrate finds the accused

guilty, he may sentence him.

(v) Non appearance or death of complainant

As per the provisions of S. 256 of the Criminal Procedure

Code, 1973,30 in a summons case instituted on a complaint, if

the complainant does not appear on the day appointed for the

accused to appear or on a subsequent day to which the hearing

has been adjourned, the Magistrated may acquit the accused.

5. Summary Trials

The provisions of the Criminal Procedure Code for

summary trials are contained in S. 260 to S. 265 of Criminal

Procedure Code, 197331. The procedure of summary trials is

followed in less serious or petty cases. S. 138 of the Customs

Act, 196232 specifically provides that summary trial procedure

can be adopted in certain types of cases.

30 Id., p 135. 31 Id., p 143-149. 32 For reference see R. K. Jain’s Customs Law Manual, 39th Edition, 2009(July),

Centax Publications Pvt. Ltd. 1512-B, Bhisham Pitamah Marg, New Delhi, p 1.118.

188

The provisions of Criminal Procedure Code in this regard

are briefly summarized below:

(i) Power to try summarily

According to the provisions of S. 260 of Criminal

Procedure Code, 1973,33 following category of Magistrates are

empowered to try certain types of cases summarily:

(a) Chief Judicial Magistrate

(b) Metropolitan Magistrate

(c) Magistrate of First class, specially empowered for this

purpose by the High Court.

(ii) Types of cases which may be tried summarily

There are 9 types of cases which have been listed under

S. 260 as cases that can be tried summarily. The important

offences which can be tried summarily and which are concerned

with the Central indirect taxes are the –

“Offences not punishable with death, imprisonment for life

or imprisonment for a term exceeding two years.”

33 Supra note 3, p 143.

189

Thus, all offences punishable with imprisonment for a term

upto 2 years can be tried summarily.

(iii) Procedure in summary trials

According to the provisions of S. 262 of Criminal

Procedure Code, 1973,34 the procedure prescribed for trial of

summons cases in the Criminal Procedure Code (i.e. S. 251 to

259)35 is mutatis-mutandi applicable to summary trial, with the

modifications as contained in S. 263 to S. 26536.

(iv) Record in summary trials

According to the provisions of S. 263 of Criminal

Procedure Code, 1973,37 the Magistrate trying a case in a

summary way is required to maintain a register giving details of

the offence, report or complaint name of the accused,

complainant etc.

34 Id., p 146. 35 Id., p 130-142. 36 Id., p 147-149. 37 Id., p 147.

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(v) Judgment in cases tried summarily

According to the provisions of S. 264 of Criminal

Procedure Code, 1973,38 in any case tried summarily if the

accused does not plead guilty the Magistrate is required to

record:

(a) the substance of the evidence and

(b) a judgement, containing a brief statement of the reasons for

the finding.

6. Absconding of accused, Proclamation and attachment

of property of absconding person

There may be instances where the accused persons may

conceal themselves or may be absconding to evade the warrant

of arrest and to be produced or brought before the magistrate

who issued the warrant on institution of the Criminal Complaint.

It may be mentioned here as per S. 244 of the Criminal

Procedure Code39, in a warrant case of the type instituted by

Department of Central Excise & Customs (i.e. other than on

Police Report) the Magistrate will proceed to hear the

Prosecution and take the Prosecution evidence only when the

38 Id., p 148. 39 Id., p 111.

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accused appears or is brought before the Magistrate, So, the

accused, particularly in smuggling cases as is commonly

observed, may evade service of warrant and may not appear

before the magistrate with a motive to delay the proceedings. At

times they may abscond after the proceedings have started. In

such cases, the Criminal Procedure Code provides for issue of

proclamation and attachment of the property of the accused.

These provisions are discussed below:

(i) Proclamation for person absconding

As per the provisions of S. 82 of Criminal Procedure Code,

1973,40 when any person against whom a warrant has been

issued by a court has either absconded or is concealing himself,

So that such warrant can not be executed, the court may

publish a written Proclamation. The Proclamation should specify

the following and the purpose:

(a) Requiring the person to appear before the court.

(b) The place where he should appear,

(c) The time (not less than 30 days) when he should appear.

40 Supra note 7, p 183.

192

(ii) Attachment of property of person absconding

As per the provisions of S. 83 of Criminal Procedure Code,

1973,41 the property of the absconding person may be ordered

by the Court to be attached. The attachment order may be,

(a) at any time after the issue of the Proclamation under Sec.

82.42

(b) Simultaneously with the issue of the Proclamation, if the

person is either about to dispose of the whole or part of

his property or is about to remove the whole or part of his

property from the local jurisdiction of the Court.

(c) in respect of movable or immovable property or both

belonging to the person.

(d) in respect of property within the district or without the

district of the local jurisdiction of the Court.

41 Id., p 188. 42 Id., p 183.

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7. Bond provisions

(i) Power to take bond

By virtue of powers vested under S. 88 of Criminal

Procedure Code, 1973,43 the Magistrate of a Court may order

any person to execute a bond if:

(a) The Magistrate is empowered to issue summons or

warrant for the appearance or arrest of such person.

(b) Such person is present in such Court,

(c) For the purpose of appearance of such person in such

Court or any other Court to which the case may be

transferred for trial.

These provisions are generally invoked and a Prayer is

made to the Court in respect of accused persons who are

suspected to abscond or who may leave the country or accused

persons who may be foreign nationals, who may leave India at

the earliest opportunity in respect of foreign nationals it is not

proper to accept personal bond.

43 Id., p 204.

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(ii) Arrest on breach of bond for appearance

According to the provisions of S. 89 of Criminal Procedure

Code, 1973,44 if any person who is bound by a bond to appear,

does not appear before Court, the Magistrate may issue an

arrest warrant for producing the person before the Court.

8. Disposal of seized property

One of the important Provisions in S. 451 of the Criminal

Procedure Code, 197345 is regarding disposal of Property

pending trial. It is provided in this Section that the Court may

order disposal of Property:

(a) If the Property is subject to speedy and natural decay or

(b) It is otherwise expedient so to do,

After recording such evidence as the Court thinks

necessary may order that property be sold or otherwise disposed

of.

These provisions are helpful to get Court’s order for

disposal of seized/confiscated goods, pending further

44 Id., p 206. 45 Supra note 3, p 446.

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proceedings in the prosecution. Goods susceptible for speedy

and natural decay are specifically referred to in this Section. It is

not necessary that the goods should be of perishable nature to

invoke the provisions of S. 451 of Criminal Procedure Code,

1973. Even seized/confiscated vehicles like trucks and cars can

be stated to be subject to natural decay if the prosecution

proceedings take unusually long periods say three or four years

after seizure. As it happens in many of the smuggling cases,

where the vehicles are also seized; and particularly so, if the

accused are absconding and in dormant cases, it will be

otherwise expedient to dispose of goods pending trials of

prosecution, in cases involving textiles as they decay speedily; in

respect of electronic goods it may be said that the models

become outdated soon in view of fast technological

developments and the outdated models may not find a ready

market after a few years, resulting in loss to Govt. Good set of

reasons can be found for getting Courts’ order for disposal of

different kinds of seized/confiscated goods.

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Further by virtue of powers vested in it under S. 459 of

Criminal Procedure Code, 1973,46 The Court can order disposal

of perishable goods by sale at any time.

9. Appeals before High Courts

The important appeal provisions as are relevant to the

administration of indirect taxes are discussed below:

(i) Right of appeal

According to the provisions of S. 372 of Criminal

Procedure Code, 1973,47 no appeal lies to higher court unless it

is otherwise provided in law. Filing of appeal against any

judgment or order of a criminal Court is sought to be

discouraged by putting an embargo, except as providing in the

Criminal – Procedure Code or any other law for the time being in

force. Only in selected cases, an appeal lies and not in all cases.

46 Id., p 461. 47 Id., p 288.

197

(ii) Accused plead & is guilty

There is a provision under S. 375 of Criminal Procedure

Code, 1973,48 that there will be no appeal in a Criminal Case of

the following types:

Ø If the conviction is by a High Court, or

Ø If the conviction is by a Court of session, Metropolitan

Magistrate, or Magistrate of the first class or Second class.

(a) Conditions

However in respect of the above, the following conditions

are prescribed:

Ø the accused should have pleaded guilty and

Ø he has been convicted on such plea.

(b) Exceptions

Notwithstanding the above provisions, an appeal can be

preferred on the following grounds:

Ø Regarding the extent of the sentence,

Ø Regarding the legality of the sentence,

48 Id., p 296.

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10. Provisions as to bail and bonds

There are two types of offences i.e. bailable and non

bailable.

(i) Bailable cases

As per the provisions of S. 436 of Criminal Procedure

Code, 1973,49 a person accused of a bailable offence is entitled

to be released on bail in the following circumstances:

Ø When the person is arrested or detained without warrant

by an officer incharge of a police station.

Ø When the person appears or is brought before the court.

Ø When the person is prepared at any time in the custody of

such police officer or at any stage of the proceedings

before the court to give bail.

The officer in charge of the police station or the court has

discretion to discharge the accused person on his executing a

bond for his appearance.

The court may refuse to release the accused on bail if

such person had failed on an earlier occasin to comply with the

49 Id., p 406.

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conditions of the bail bond as regards the time and place of

attendance etc.

The court has the power to order any person bound by the

bail to pay the penalty for failing to comply with the conditions of

the bail bond.

A person accused of a bailable offence is treated

differently from a person accused of a non-bailable offence for

purpose of grant of bail. A person accused of a bailable offence

has a right under S. 436 of the Criminal Procedure Code, 1973

to be released on bail at any time while under detention without

a warrant and at any stage of the proceedings before the court

before which he is brought.

Persons violating the provisions of the bail bond are not to

be released on bond. The refusal of bail to a person breaking

bail bond is without prejudice to any action that may be taken

under S. 446 of Criminal Procedure Code, 197350 for forfeiture of

the bail bond. In other words, if any person has not complied

with the conditions of the bail bond, the court besides refusing

50 Id., p 439.

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bail to such person on a subsequent appearance before the

court, may also order for feature of the bail bond.

(ii) Non Bailable Cases

In respect of non-bailable offence, the court may order the

accused person to be released on bail for various reasons as

provided in S. 437 of Criminal Procedure Code, 1973,51

Provisions in sub-section 352 of this Section is of interest in the

case of offences under Central Excise and Customs Laws,

according to which, when a person accused or suspected of the

commission of an offence punishable with imprisonment which

may extend to 7 years or more or abetment of or conspiracy or

attempt to commit any such offence is released on bail, the court

may impose any conditions which the court considers necessary

in order to ensure the attendance of such person in accordance

with the conditions of the bond executed, in order to ensure that

such person does not commit any offence similar to the offence

of which he is accused or it is otherwise in the interest of justice.

51 Id., p 411. 52 Id., p 412.

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(iii) Important guiding principles for considering bail

application

There are many guiding principles in respect of grant of

bail but some important ones are;

Ø Generally it is the rule to allow bail rather than to refuse

bail.

Ø Bail is not to be held as a punishment.

Ø The fact that an offence is a serious one does not afford a

sufficient ground to refuse bail.

Ø Probability of the accused appearing to take trial and the

alleged guilt or innocence is to guide in determining the

person whether bail should be granted or not.

Ø There is no hard and fast rule regarding grant of bail but

the discretion of the Court must be exercised judicially.

Ø Bail should not be granted when the accused is likely to

abscond if released.

Besides the above guiding principles there are various

other reasons on which the bail cannot be refused if the accused

is prepared to give the bail.

202

Securing the presence of the accused for trial is the

paramount for bail. The Supreme Court has laid down the

following principles for consideration of the grant of bail53 :

1. Nature and seriousness of the offence;

2. The character of the evidence;

3. Circumstances which are peculiar to the accused;

4. A reasonable possibility of the presence of the accused not

being secured at the trial;

5. Reasonable apprehension of witnesses being tampered

with;

6. The larger interest of the public or the state and other

similar conditions;

7. In this case the Supreme Court observed as under 54:

“The two paramount considerations viz likelihood of the

accused fleeing from justice and his tampering with prosecution

evidence relate to ensuring a fair trial of the case in a court of

justice, it is essential that due and proper weight should be

bestowed on these two factors apart from others. There can be

an inexorable formula in the matter of granting bail. The facts

53 Gurcharan v. State, AIR, 1978, SC, p 179. 54 Ibid.

203

and circumstances of each case will govern the exercise of

judicial discretion in granting or cancelling bail.”

In view of the above ratio laid-down by the Supreme Court

in the matter of granting or cancelling bail, the court can be

approached with a prayer to cancel the bail granted earlier if

there are reasons to believe that the accused may jump the bail

and flee from justice or that the accused may tamper with the

prosecution witnesses/evidence etc.

In the case of foreigners accused of offences under the

Customs Act or the Foreign Exchange Regulations Act, the bail

application can be opposed on the ground that the accused is

certain to flee the country. Inspite of it, if the courts are inclined

to grant bail to the foreigners accused of violation of the laws

referred to above, a prayer could be made to the Court the

accused may not be released on own/personal bond; but

another person’s bond for enough amount with sufficient surety

could be insisted upon.

204

11. Writ jurisdiction of High Courts and Supreme Court of

India

Whereas the Supreme Court can be moved only for the

enforcement of the fundamental rights guaranteed under part III

of the Constitution of India under Article 3255 of the Constitution

of India by way of writ, the High Courts can be approached for

infringement of any fundamental right as well as “for any other

purpose”, under Article 22656 of the Constitution of India.

Both the Supreme Court and the High Courts in India

have been conferred powers to issue five kinds of writs

specifically mentioned in Art. 32(2)57 and in Art. 226(1)58. In the

nature of Habeas Corpus, Mandamus, Prohibition, Quo warranto

and Certiorari, or any one of more of them with the further power

to issue “such” other directions and orders as may be considered

appropriate in any case.

So far as the enforcement of fundamental rights goes,

the Supreme Court and the High Courts have concurrent

55 V. N. Shukla’s Constitution of India Eleventh Edition, 2008, Eastern Book

Company, Lucknow, p 318-335. 56 Id., p 616. 57 Id., p 321. 58 Id., p 616.

205

jurisdiction. It depends upon the choice of the petitioner whether

to approach the High Court first and then make an attempt to go

to the Supreme Court in appeal or file a writ petition directly in

the Supreme Court. This point had been considered by the

Supreme Court in a case, where a writ had been directly filed to

the Supreme Court. It was held by the Supreme Court that “this

court is constituted as the protector and guarantor of

fundamental rights and so it cannot, consistent with its

responsibility, refuse to entertain applications seeking protection

against infringement of such right.”59 It is a different matter that

the Supreme Court may not entertain a second writ petition after

the first had been dismissed by the High Court,60 or if the second

petition is defective as certain required conditions have not been

fulfilled61.

Art. 32 is itself a fundamental right guaranteeing right

to Constitutional Remedies, Clause (1) guarantees a right to a

person to move the Supreme Court by appropriate proceedings

for enforcement of the right conferred by Part III. The Supreme

Court is thus made a guarantor and protector of fundamental

59 Ramesh Thape v. State of M.P., AIR, 1950, SC, p 124. 60 Gopalan v. State of M.P., AIR, 1954, SC, p 302. 61 Coffee Board v. Joint Commercial Tax Officer, 1969(3), SCC, p 349.

206

rights. The underlying idea in conferring power on the Supreme

Court under Art. 32 and on the High Courts under Art. 226 for

the enforcement of the fundamental rights as explained by the

Supreme Court is that “the Constitution having provided for the

fundamental rights, it was thought necessary to provide also a

quick and inexpensive remedy for the enforcement of such rights

. In the state’s sphere new and wide powers were conferred on

the High Courts for issuing directions, order or writs, primarily for

the enforcement of fundamental rights the power to issue such

directions for any purpose being also included

Art. 32 provides a guaranteed, quick and summary

remedy for the enforcement of Fundamental Rights, Art 32 itself

is a fundamental Right. Art 32 can be invoked only when there is

an administrative action in conflict with a Fundamental Right of

the petitioner. It cannot be invoked if no question of enforcing a

Fundamental Right arises Art. 32 cannot be invoked even if an

administrative action is illegal unless the petitioner’s

Fundamental Rights is infringed. For example, a petition merely

against an illegal collection of income tax is not maintainable

under Art. 32, for the protection against imposition and collection

207

of taxes except by authority of law falls under Art. 26562 which is

not a Fundamental Right.

The writ jurisdiction conferred on the High Courts by

Art. 226 can be invoked to enforce not only a Fundamental Right

but a non-fundamental right as well. A High Court may act when

a Fundamental Right or any other legal right in violated.

The Constitutional remedies in certain cases are

excluded by other constitutional provisions e.g. Art. 32963 and

Art. 36364 respectively.

If the principles of natural justice are denied, even

without exhausting alternative remedies, the High Court can

issue a writ of certiorari. Similarly, if the administrative action is

ultra vires of the law or rules, or without jurisdiction or authority

or the authority acts inappropriately without the sanction of law, a

High Court can issue a writ.

62 Supra note 55, p 778. 63 Id., p 915. 64 Id., p 983.

208

It is not usual for the Surpeme Court to go into

complicated questions of fact in a writ petition. However, under

Art. 22665, the High Court has jurisdiction to try issues both of

fact and law.

The Courts possess inherent powers to grant interim

stay in matters pending before them under the writ petitions. The

Supreme Court has ruled to the effect that interim stay will not be

granted without notice to the party affected thereby, except,

where the delay caused by notice would entail serious hardship.

(i) Guidelines for Writs

The following guidelines for the exercise of the writ

jurisdiction have been laid down by the various Courts:-

All other Alternative remedies must have been exhausted.66

There should not have been any unexplainable delay or laches

on the part of the petitioner. 67

There should not be disputed questions of facts.68

The petitioner should not be guilty of suppression veri, and must

come with clean hands.69

65 Id., p 616. 66 Rashid Ahmed v. Municipal Board, AIR, 1950, SC, p 163. 67 P.S. Sadasivaswamy v. State of T.N., 1975(1), SCC, p 152. 68 Ramani Kanta v. Gauhati University, AIR, 1951, Assam, p 163.

209

The writ should not be futile.70

A writ will not be issued if the effect of doing so will be to

perpetuate illegal orders.71

A writ can be declined, if it is found to be making a claim on

grounds which are frivolous, reckless, vexatious, without

substance, or prima facie unjust.72

A petition under Article 226 ought not to be heard without making

party the persons to be affected by the decision of the High

Court. In case the number of such persons is too large, they

must be represented by some one in representative capacity.73

(ii) Alternative remedy

There can be no dispute that the power of the High Court

in issuing any kind of writ is discretionary and not a rule of law74

and an appropriate writ can only be issued if the petitioner

succeeds in showing that grave injustice will be done to him. For

that reason he must first exhaust all other remedies open to

him.75 In case another adequate remedy is available, the court

69 Hajari Lal Bhana Mal v. State, AIR, 1953,HP, p 41. 70 Gopal Pd. v. Board of Revenue, AIR, 1953,Nagpur, p 121. 71 A. M. Mani v. State Electricity Board, AIR, 1968, Kerala, p 76. 72 Ratan Singh v. State of Punjab, 1980(1), SCC, p 11. 73 A.K. Yadav v. State of Haryana, 1985(4), SCC, p 417. 74 A.V. Venkateshwaran v. R. S. Wadhwani, AIR,1961, SC, p 1506. 75 Bhopal Sugar Industries Ltd. v. STO, AIR, 1967, SC, p 549.

210

may refuse to exercise its discretion in favour of the petitioner

but mere existence of such a remedy is no bar to the grant of

relief by issuing an appropriate writ.76 It is only a factor to be

taken into consideration. When a writ of certiorari is prayed for,

the superior court will not ordinarily quash the decision of the

inferior court, unless the aggrieved party has exhausted the

other statutory remedies.

The courts may not exercise their power of issuing a

writ, if the petitioner has already pursued an alternative remedy

or has allowed that remedy to become time barred or where the

statute which created the right or liability which is being enforced

has itself prescribed a statutory remedy. But the existence of an

alternate remedy has not been held to be a bar where

infringement of a fundamental right is alleged.77

(iii) Types of Writs

There are five types of writs mentioned in Art. 32 (2)78

and Art. 226 (1)79 and are discussed in detail as under:

76 Ibid. 77 B.I.C. v. State of Bihar, 1955(2), SCR, p 603. 78 Supra note 55, p 321. 79 Id., p 616.

211

(a) Habeas Corpus

It is a prerogative process remedial and mandatory for

securing the liberty or the subject form unlawful detention

whether in the custody of the state or of a private person. By this

writ, release of a person is secured from confinement or

detention which is without any lawful justification. The person

who has kept the prisoner in confinement is asked by the court

to produce him before it and to show on what ground he has

been detained. If the court is satisfied that there is no

Justification for his detention, the person is ordered to be

released. Such an application may be made by the person

detained or by any other person on his behalf. It provides only a

safeguard against wrongful detention in order to secure an early

release.

The question which the court has to consider is whether

there is any unlawful restraint on the movement of the person

detained. The court will not ordinarily interfere unless it finds that

the person has been deprived of his liberty against where there

212

has been breach of any of the conditions given in Art. 2280.

There may yet be another ground, i.e. the law under which has

been certained was not within the competency of the Legislature

which enacted it, or the particular precision under which he has

been detained is otherwise ultra vires.

The Code of Criminal Procedure, 1973, also made a

provisions in Sec. 48281 conferring jurisdiction upon the High

Courts to issue such a writ. But the power therein given was

qualified by the words whenever it thinks. Article 22682 given

wider powers to the high Courts. In fact, both the Supreme Court

under Art. 3283 and the High Courts under Art. 226 can issue

suitable directions or order as may be considered necessary and

appropriate in the particular circumstances of a case in order to

protect the liberty of an individual. Irrespective of the writ of

Habeas Corpus.

80 Id., p 212. 81 Supra note 3, p 495. 82 Supra note 55, p 616. 83 Id., p 318.

213

(b) Mandamus

Mandamus literally means a command. The main purpose

of issuing such a writ is to compel an authority, may it be the

government, or court or any legally constituted corporation or

any public authority, to act according to the provision of law or

forbear from acting in a particular manner which goes against

such a provision.84 The main object is that such bodies should

function within the four corners of law. The person applying for

such a writ has to show that he has a legal right to compel the

authority for the performance of the alleged duty, which may be

of public nature i.e. affecting the public at large and specifically

affecting the rights of the petitioner.85

Of course, mandamus is neither a writ nor a writ of right,

but will be granted if the duty is in the nature of a public duty and

specifically affects the rights of an individual provided there is no

more appropriate remedy.

Then it will appear that Madamus is not a writ of right. It

cannot be demanded ex-debite justitil but is issued only in the

84 A.T. Markose: Judicial Control of Administrative Action in India, 1956,

Madras Law Journal Office,Madras, p 364. 85 Mani Subrat Jain v. State of Haryana, AIR, 1977, SC, p 276.

214

discretion of the court. As has been put by the Supeme Court

“There must be in the applicant a right to compel the

performance of some duty cast on the opponent”86. The duty

must be of a public nature, i.e. created by statute or some rule of

common law. Merely ministerial acts which an officer has to

perform in obedience to the orders of his superor cannot be

considered public duties. The duty to be performed must be

imperative and not discretionary. Secondly, before the petition is

filed the petitioner should have demanded the performance of

duty. The absence of an allegation of demand and refusal in an

application for Mandamus is fatal to the maintainability of the

application.

(c) Prohibition

The writ of Prohibition is a process issued by a superior

court to the interior court or authority directing it not to usurp a

jurisdiction not vested in it not to exceed its jurisdiction.87 This

writ is similar to Certiorari, but they are issued at different stages

of the proceedings of the inferior court or authority. Prohibition is

issued while the proceedings are pending in order to prohibit

86 State of M.P. v. G.C. Mandawar, AIR, 1954, SC, p 493. 87 S. Govinda Menon v. Union of India, AIR, 1967, SC, p 1274.

215

further hearing or continuance of the same while certiorari is

issued to quash the order or the decision already passed made.

In that way they are complimentary to each other. Both kinds of

writs can be issued to courts performing judicial functions as well

as to authorities performing quasi-judicial functions as well as to

authorities performing quasi-judicial functions. The Supreme

court has observed88 “Both the writs of Prohibition and Certiorari

have for their object the restraining of inferior courts from

exceeding their jurisdiction and they could be issued not merely

to a court but to authorities exercising judicial or quasi-judicial

functions”. There may be occasions when a prayer for the issue

of both kinds of writ pf Prohibition and Certiorari has to be made.

Writ of Prohibition, unlike a writ of Mandamus, does

not lie against an authority, performing purely executive or

administrative functions. It scope is limited to judicial or quasi-

judicial functions. It also cannot be issued against any private

organization or any other body which is not authorized to

perform judicial or quasi-judicial functions. The object of such a

writ being to stop the mischief resulting from wrong exercise of

88 Hari v. Ahmed Ishaque, AIR, 1955, SC, p 233.

216

jurisdiction, the court has to act with judicial circumspection

having regard to the facts in each case.

(d) Quo Warranto

This writ is filed with the object of preventing a person

holding an office.89 From continuing in that office on the usual

ground that he has usurped the said office and he must show

under what authority he is holding the office, and why should he

not be ousted. The office must be a public office in which the

community at large is interested. It should not be an office in any

private organization. Quo Warranto is a remedy which cannot be

claimed as of right or as a matter of course. It is in the discretion

of the court, depending upon the facts and circumstances of

each case, to grant or refuse the issue of such a writ. The court

has to inquire if the holder of the office has nay legal authority to

hold and to continue to hold the office. If no illegality is found the

writ will fail. In case of illegality an order of ouster of the

incumbent must be passed. It is a writ in which the petitioner

does not seek enforcement of his right but questions the right of

the respondent to hold the public office.

89 University of Mysore v. Govinda Rao, AIR, 1965, SC, p 491.

217

It is also necessary that the public office challenged by the

writ of Quo Warranto must be held under some law and not rules

framed under any executive power. By a writ of Quo Warranto

appointment of High Court Judges, Speaker, Advocate General,

Municipal Commissioner, Vice-Chancellor of University have

been challenged. Such a writ will not ordinarily be issued if there

is some statutory provision providing an effective remedy, as in

the conduct of elections, or where there is an irregularity which

can be cured or where the writ will be futile or infructous.

(e) Certiorari

It is issued in the form of a command.90 The grounds on

which a writ can be issued are:

1. of jurisdiction or exceeding the jurisdiction.

2. Any violation of the procedure prescribed, or violation of

the principles of natural justice on the performance of its

functions.

3. Any mistake or error of law apparent on the face of the

record.

90 Prabodh Verma v. State of U.P., AIR, 1985, SC, p 167.

218

It would appear from the above grounds that the scope of

a writ of Certiorari does not extend beyond the supervisory

jurisdiction of a superior court. It can only correct the errors in

the exercise of jurisdiction or any error of law apparent on the

face of the records or any illegality in following the prescribed

judicial procedure by quashing the order. It cannot substitute its

own order in place of the order passed by the inferior court as

can be done in exercising appellate jurisdiction. The scope is

further limited because there can be no quashing of any purely

executive or administrative orders but only orders passed in

judicial or quasi-judicial proceedings.

Generally there is no difficulty in determining the judicial

character of proceedings, which pre-supposes the determination

of any dispute between the parties according to the procedure

prescribed by law, i.e. presentation of the case by parties, taking

of evidence, if necessary, giving hearing to the parties or their

counsel, and then giving a decision on the rights of the parties

on all the disputed points. There is also no difficulty in such

quasi-judicial proceedings which hare determined by a tribunal

or authority, which has all the trappings of a court. The difficulty

arises in other quasi-judicial proceedings where the trappings of

219

a court are missing and they look like executive acts. There are

also certain executive acts based merely upon subjective opinion

of the authority, without any sort of inquiry of any requirement of

inquiry and such acts, too, should not present any difficulty in

determining the character of the act or the order passed.

Difficulties arise in such administrative or executive acts in which

some objective consideration or executive acts in which some

objective consideration has to be given at some stage and for

that reason they look like quasi-judicial acts. In executive acts of

this kind and quasi-judicial acts of the above type there is a thin

line of distinction. The questions have to be determined

according to the facts and circumstances of each case and not

according to any hard and fast rule.

12. Manner of handling of Writ Petitions by the

department

When a writ petition is filed by an assessee/importer

under Article 226 or Article 32 of the Constitution of India, as the

cases may be, the High Court/Supreme Court may post the case

for admission, or admit the writ and pass interim order or dismiss

the writ petition. The decision would depend on the facts of the

case and the forceful presentation by the petitioners Advocate.

220

On quite a few occasions, the Court may grant a stay requested

for by the petitioners at the time of filling of the writ petition itself

and such stay could be ex-parte. Whenever there is a doubt that

the assessee/importer is likely to file a writ, the department

should take care to file a caveat in order to ensure that the writ is

not admitted at the first stage itself, without the department being

given an opportunity to be heard but in practice as the this

postings in legal cell are accorded least importance and no such

safeguard is observed to have been taken in the study

conducted. Many a times it is seen that the writs filed by the

department fail due to various reasons. A writ filed by the

department for stay/ dispensation of pre deposit of duty against

the orders of the Tribunal for the reasons of financial hardships

was dismissed as infructuous on the request of the departmental

counsel91

(i) Service of Notice

After the writ petition is admitted by the court, rule nisi is

issued to the department with or without directions to be

followed. Normally, the Registrar of the High Court/Supreme

91 Commissioner v. Micro Village Communications Pvt. Ltd., 2010, ELT, p

A115(Karnatka HC).

221

Court is supposed to enclose a copy of the writ petition and its

annexures alongwith the directions of the court. Alternatively, the

counsel for the petitioner’s is expected to serve a copy of the writ

petition on the respondent government department. However, in

practice writ petition filed by the petitioner’s are received in the

Headquarters. This results in considerable delay in responding

to the directions of the Court. When there is no response or

delay in responding to the directions of the Supreme Court/High

Court, the stay or direction given by the Court is made absolute.

13. Appellate jurisdiction of High Courts under Central

Indirect Taxes

The appeal against the orders of Customs Excise and

Service Tax Appellate Tribunal lies to the High Courts. If the

dispute relates to the question of law then a reference can be

made to High Court. It is seen that no question of fact can be

agitated before the High Court. It has been held that reference is

not maintainable because the findings recorded in the order of

the Tribunal are pure findings of facts giving rise to no question

of law.92 These provisions are analysed hereinafter.

92 Commissioner of Central Excise Chandigarh v. Varinder Agro Chemicles Ltd.,

2005, ELT, p 60(P&H).

222

(i) Appeal before High Courts in Central Excise cases

By virtue of the provisions of S. 35G of the Central Excise

Act, 194493 an appeal lies to the High Court from every order

passed in appeal by the Appellate Tribunal, if it is not an order

relating, among other things, to the determination of any

question having a relation to the rate of duty of excise or to the

value of goods for purposes of assessment, if the High Court is

satisfied that the case involves a substantial question of law.

The Commissioner of Central Excise or the other party

aggrieved by any order passed by the Appellate Tribunal may

file an appeal to the High Court and such shall be: -

(a) filed within one hundred and eighty days from the date on

which the order appealed against is received by the

Commissioner of Central Excise or the other party;

(b) accompanied by a fee of two hundred rupees where such

appeal is filed by the other party;

93 For reference see R. K. Jain’s, Central Excise Law Manual, Golden Jubilee

Edition, 2010 (March), Centax Publication Pvt. Ltd. 1512-B, Bhisham Pitamah Marg, New Delhi, p 1.141.

223

(c) in the form of a memorandum of appeal precisely stating

therein the substantial question of law involved.

However, the High Court may admit an appeal after the

expiry of the period of one hundred and eighty days, if it is

satisfied that there was sufficient cause for not filing the same

within that period.

In cases, where the High Court is satisfied that a

substantial question of law is involved, it shall formulate that

question. The appeal shall be heard only on the question so

formulated, and the respondents shall, at the hearing of the

appeal, be allowed to argue that the case does not involve such

question. But nothing shall be deemed to take away or abridge

the power of the Court to hear, for reasons to be recorded, the

appeal on any other substantial question of law not formulated

by it, if it is satisfied that the case involves such question. The

High Court shall decide the question of law so formulated and

deliver such judgment thereon containing the grounds on which

224

such decision is founded and may award such cost as it deems

fit.

However, the High Court may determine any issue which

has not been determined by the Appellate Tribunal or has been

wrongly determined by the Appellate Tribunal, by reason of a

decision on such question of law.

In all such cases an appeal shall be heard by a bench of

not less than two Judges of the High Court, and shall be decided

in accordance with the opinion of such Judges or of the majority,

if any, of such Judges. Where there is no such majority, the

Judges shall state the point of law upon which they differ and the

case shall, then, be heard upon that point only by one or more of

the other Judges of the High Court and such point shall be

decided according to the opinion of the majority of the Judges

who have heard the case including those who first heard it.

225

However, the provisions of the Code of Civil Procedure,

1908 (5 of 1908), relating to appeals to the High Court shall, as

far as may be, apply in the case of appeals filed in respect of

above cases.

(a) Application to High Court

As per the provisions of S. 35H of the Central Excise Act,

194494 the Commissioner of Central Excise or the other party

may, within one hundred and eighty days of the date upon which

he is served with notice of an order under section 35C95 passed

relating, among other things, to the determination of any

question having a relation to the rate of duty of excise or to the

value of goods for purposes of assessment), by application in

the prescribed form, accompanied, where the application is

made by the other party, by a fee of two hundred rupees, apply

to the High Court to direct the Appellate Tribunal to refer to the

High Court any question of law arising from such order of the

Tribunal. The Commissioner of Central Excise or the other party

applying to the High Court shall clearly state the question of law

94 Id., p 1.141. 95 Id., p 1.138.

226

which he seeks to be referred to the High Court and shall also

specify the paragraph in the order of the Appellate Tribunal

relevant to the question sought to be referred.

After receipt of notice that an application has been made,

the person against whom such application has been made, may,

notwithstanding that he may not have filed such application, file,

within forty-five days of the receipt of the notice, a memorandum

of cross-objections verified in the prescribed manner against any

part of the order in relation to which an application for reference

has been made and such memorandum shall be disposed of by

the High Court as if it were an application presented within the

time under this section. The High Court may admit an application

or permit the filing of a memorandum of cross-objections after

the expiry of the specified period, if it is satisfied that there was

sufficient cause for not filing the same within that period.

In cases where the High Court directs the Appellate

Tribunal to refer the question of law raised in the application, the

Appellate Tribunal shall, within one hundred and twenty days of

227

the receipt of such direction, draw up a statement of the case

and refer it to the High Court.

(b) Amendment of the Statement

By virtue of powers vested under S. 35-I of the Central

Excise Act, 194496 if the High Court or the Supreme Court is not

satisfied that the statements in a case referred to it are sufficient

to enable it to determine the questions raised thereby, the Court

may refer the case back to the Appellate Tribunal for the

purpose of making such additions thereto or alterations therein

as it may direct in that behalf.

(c) Quorum of the bench of High Court

It has been provided vide S. 35J of the Central Excise Act,

194497 that when any case has been referred to the High Court

under section 35G or section 35H, it shall be heard by a Bench

of not less than two judges of the High Court and shall be

decided in accordance with the opinion of such judges or of the

96 Id., p 1.142. 97 Id., p 1.142.

228

majority, if any, of such judges. Where there is no such majority,

the judges shall state the point of law upon which they differ and

the case shall then be heard upon that point only by one or more

of the other judges of the High Court, and such point shall be

decided according to the opinion of the majority of the judges

who have heard the case including those who first heard it.

(d) Manner of pronouncement of judgment

The manner in which all the decision of High Court or

Supreme Court on the cases is elaborated under S. 35K of the

Central Excise Act, 1944.98 The High Court or the Supreme

Court hearing any such case shall decide the question of law

raised therein and shall deliver its judgment thereon containing

the grounds on which such decision is founded and a copy of the

judgment shall be sent under the seal of the Court and the

signature of the Registrar to the Appellate Tribunal which shall

pass such orders as are necessary to dispose of the case in

conformity with such judgment. Where the High Court delivers

a judgment in an appeal filed before it under section 35G, effect

shall be given to the order passed on the appeal by the

98 Ibid.

229

concerned Central Excise Officer on the basis of a certified copy

of the judgment.

However the costs of any reference to the High Court or an

appeal to the High Court or the Supreme Court, as the case may

be which shall not include the fee for making the reference, shall

be in the discretion of the Court.

(ii) Appeal before High Courts in Service Tax cases

The provisions of Central Excise Act, 1944 pertaining to

the appeals against the orders of Customs Excise and Service

Tax Appellate Tribunal to High Court as detailed here in above

have also been mutatis mutandi made applicable to Service Tax

matters by virtue of Section 83 of the Finance Act, 1994,99

99 For reference see S.S.Gupta’s Service Tax How To Meet Your Obligation,

Vol.2, 29th Edition, 2010(June), Taxmann Allied Services Pvt. Ltd., p 2472.

230

(iii) Appeal before High Courts in Customs cases

By virtue of S.130 of the Customs Act, 1962100 an appeal

can be made to the High Court from every order passed in

appeal by the Customs Excise and Service Tax Appellate

Tribunal (not being an order relating, among other things, to the

determination of any question having a relation to the rate of

duty of customs or to the value of goods for the purposes of

assessment), if the High Court is satisfied that the case involves

a substantial question of law.

The Commissioner of Customs or the other party

aggrieved by any order passed by the Appellate Tribunal may

file an appeal to the High Court and such appeal shall be filed

within one hundred and eighty days from the date on which the

order appealed against is received by the Commissioner of

Customs or the other party. This appeal shall be accompanied

by a fee of two hundred rupees where such appeal is filed by the

other party and it will be in the form of a memorandum of appeal

precisely stating therein the substantial question of law involved.

100 Supra note 32, p 1.113.

231

The High Court may admit an appeal after the expiry of

the period of one hundred and eighty, if it is satisfied that there

was sufficient cause for not filing the same within that period.

Where the High Court is satisfied that a substantial

question of law is involved in any case, it shall formulate that

question. The appeal shall be heard only on the question so

formulated, and the respondents shall, at the hearing of the

appeal, be allowed to argue that the case does not involve such

question. But nothing shall be deemed to take away or abridge

the power of the Court to hear, for reasons to be recorded, the

appeal on any other substantial question of law not formulated

by it, if it is satisfied that the case involves such question.

The High Court shall decide the question of law so

formulated and deliver such judgment thereon containing the

grounds on which such decision is founded and may award such

cost as it deems fit.

232

The High Court may determine any issue which has not

been determined by the Appellate Tribunal or has been wrongly

determined by the Appellate Tribunal, by reason of a decision on

such question of law.

When an appeal has been filed before the High Court, it

shall be heard by a bench of not less than two Judges of the

High Court, and shall be decided in accordance with the opinion

of such Judges or of the majority, if any, of such Judges. Where

there is no such majority, the Judges shall state the point of law

upon which they differ and the case shall, then, be heard upon

that point only by one or more of the other Judges of the High

Court and such point shall be decided according to the opinion of

the majority of the Judges who have heard the case including

those who first heard it.

However, the provisions of the Code of Civil Procedure,

1908 (5 of 1908), relating to appeals to the High Court shall, as

far as may be, apply in the case of appeals filed in respect of

above cases.

233

(a) Application to High Court.

As per the provisions contained in S. 130A of the Customs

Act, 1962,101 the Commissioner of Customs or the other party

may, within one hundred and eighty days of the date upon which

he is served with notice of an order under section 129B102 (not

being an order relating, among other things, to the determination

of any question having a relation to the rate of duty of customs or

to the value of goods for purposes of assessment), by application

in the prescribed form, accompanied, where the application is

made by the other party, by a fee of two hundred rupees, apply to

the High Court to direct the Appellate Tribunal to refer to the High

Court any question of law arising from such order of the Tribunal.

The Commissioner of Customs or the other party applying

to the High Court shall clearly state the question of law which he

seeks to be referred to the High Court and shall also specify the

paragraph in the order of the Appellate Tribunal relevant to the

question sought to be referred.

101 Id., p 1.114. 102 Id., p 1.110.

234

On receipt of notice that an application has been made,

the person against whom such application has been made, may,

notwithstanding that he may not have filed such application, file,

within forty-five days of the receipt of the notice, a memorandum

of cross-objections verified in the prescribed manner against any

part of the order in relation to which an application for reference

has been made and such memorandum shall be disposed of by

the High Court as if it were an application presented within the

time specified.

However, the High Court may admit an application or

permit the filing of a memorandum of cross-objections after the

expiry of the relevant period, if it is satisfied that there was

sufficient cause for not filing the same within that period.

If, on an application, the High Court directs the Appellate

Tribunal to refer the question of law raised in the application, the

Appellate Tribunal shall, within one hundred and twenty days of

the receipt of such direction, draw up a statement of the case

and refer it to the High Court.

235

(b) Amendment of the statement

If the High Court or the Supreme Court is not satisfied that

the statements in a case referred to it are sufficient to enable

it to determine the questions raised thereby, the Court may

refer the case back to the Appellate Tribunal for the purpose

of making such additions thereto or alterations therein as it

may direct in that behalf by virtue of the powers vested in it

vide S. 130B of the Customs Act, 1962.103

(c) Quorum of the bench of High Court

It is provided vide S. 130C of the Customs Act, 1962104

that when any case has been referred to the High Court under S.

130 or S. 130A it shall be heard by a Bench of not less than two

judges of the High Court and shall be decided in accordance

with the opinion of such judges or of the majority, if any, of such

judges. Where there is no such majority, the judges shall state

the point of law upon which they differ and the case shall then be

heard upon that point only by one or more of the other judges of

the High Court, and such point shall be decided according to the

103 Id., p 1.114. 104 Ibid.

236

opinion of the majority of the judges who have heard the case

including those who first heard it.

(d) Manner of Pronouncement of Judgment

It is provided under S. 130D of the Customs Act, 1962105

that the High Court or the Supreme Court hearing any such case

shall decide the questions of law raised therein, and shall deliver

its judgment thereon containing the grounds on which such

decision is founded and a copy of the judgment shall be sent

under the seal of the Court and the signature of the Registrar to

the Appellate Tribunal which shall pass such orders as are

necessary to dispose of the case in conformity with such

judgment. Where the High Court delivers a judgment in an

appeal filed before it under section 130, effect shall be given to

the order passed on the appeal by the proper officer on the basis

of a certified copy of the judgment.

The costs of any reference to the High Court or an appeal

to the High Court or the Supreme Court as the case may be

105 Ibid.

237

which shall not include the fee for making the reference shall be

in the discretion of the Court.

13. Appellate jurisdiction of Supreme Court of India under

Central Indirect Taxes

Although the Supreme Court is highest court of appeal in

the country and the orders of High Courts can be appealed

against before it but certain appeals against the orders of

Customs Excise and Service Tax Appellate Tribunal can be

made directly to the Supreme Court of India. In the cases of

dispute regarding classification/ valuation or both, then the

appeal against this order directly lies to the Supreme Court.

These provisions are analysed hereinafter.

(i) Appeal to the Supreme Court of India in respect of

Central Excise cases

By virtue of the provisions of S. 35L106 of the Central

Excise Act, 1944, an appeal shall lie to the Supreme Court from

any judgment of the High Court delivered in an appeal made

106 Supra note 93, p 1.142.

238

under section 35G107 or on a reference made under section 35G

by the Appellate Tribunal. This appeal can be made on a

reference made either under section 35H108 or in any case

which, on its own motion or on an oral application made by or on

behalf of the party aggrieved, immediately after passing of the

judgment, the High Court certifies to be a fit one for appeal to the

Supreme Court or any order passed before the establishment

of the National Tax Tribunal by the Appellate Tribunal relating,

among other things, to the determination of any question having

a relation to the rate of duty of excise or to the value of goods for

purposes of assessment.

(a) Manner of hearing by Supreme Court

It has been categorically provided under S. 35M of the

Central Excise Act, 1944109that the provisions of the Code of

Civil Procedure, 1908 (5 of 1908), relating to appeals to the

Supreme Court shall also apply in the case of appeals under

section 35L110 as they apply in the case of appeals from decrees

107 Id., p 1.141. 108 Id., p 1.141. 109 Id., p 1.143. 110 Id., p 1.142.

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of a High Court but it has also been provided that nothing in this

sub-section shall be deemed to affect the provisions of sub-

section (1) of section 35K111 or section 35N112. In all these cases

the costs of the appeal shall be in the discretion of the Supreme

Court.

However, where the judgment of the High Court is varied

or reversed in the appeal, effect shall be given to the order of the

Supreme Court in the manner provided in section 35K in the

case of a judgment of the High Court.

(b) Condition relating to payment of dues before filling of

appeal/reference

It has specifically provided under S. 35N of the Central

Excise Act, 1944113 that notwithstanding that a reference has

been made to the High Court or the Supreme Court or an appeal

has been preferred to the Supreme Court, under this Act before

the commencement of the National Tax Tribunal Act, 2005 sums

111 Id., P 1.142. 112 Id., P 1.143. 113 Ibid.

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due to the Government as a result of an order passed under

sub-section (1) of section 35C114 shall be payable in accordance

with the order so passed.

(c) Manner of calculation of limitation period

As per provisions of S. 35-O of the Act115 for computing the

period of limitation prescribed for an appeal or application, the

day on which the order complained of was served, and if the

party preferring the appeal or making the application was not

furnished with a copy of the order when the notice of the order

was served upon him, the time requisite for obtaining a copy of

such order shall be excluded.

(ii) Appeal before Supreme Court of India in Service Tax

cases

The provisions of Central Excise Act, 1944 pertaining to

the appeals against the orders of Customs Excise and Service

Tax Appellate Tribunal pertaining to the appeal before Supreme

114 Id., p 1.138. 115 Id., p 1.143.

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Court as detailed here in above have also been mutatis mutandi

made applicable to Service Tax matters by virtue of Section 83

of the Finance Act, 1994,116

(iii) Appeal before High Courts in Customs cases

By virtue of provisions contained in S.130E of the Customs

Act, 1962117 an appeal can be made to the Supreme Court from

any judgment of the High Court delivered in an appeal made

under section 130 or on a reference made under section

130A.118

It is also provided that appeal can also be filed in any case

which, on its own motion or on an oral application made by or on

behalf of the party aggrieved, immediately after passing of the

judgment, the High Court certifies to be a fit one for appeal to the

Supreme Court or any order passed before the

establishment of the National Tax Tribunal by the Appellate

Tribunal relating, among other things, to the determination of any

116Supra note 99, p 2472. 117 Supra note 32, p 1.114. 118 Id., p 1.114.

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question having a relation to the rate of duty of customs or to the

value of goods for purposes of assessment.

(a) Manner of hearing by the Supreme Court

It is provided vide S. 130F of the Customs Act, 1962119 that

the provisions of the Code of Civil Procedure, 1908 (5 of 1908),

relating to appeals to the Supreme Court shall, so far as may be,

apply in the case of appeals under section 130E120 as they apply

in the case of appeals from decrees of a High Court but it has

also been provided that nothing in this sub-section shall be

deemed to affect the provisions of sub-section (1) of section

130D121 or section 131122.

In all these cases the costs of the appeal shall be in the

discretion of the Supreme Court. Where the judgment of the

High Court is varied or reversed in the appeal, effect shall be

given to the order of the Supreme Court in the manner provided

119 Id., p 1.115. 120 Id., p 1.114. 121 Id., p 1.114. 122 Id., p 1.115.

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in section 130D123 in the case of a judgment of the High Court,

the manner has already been discussed here in before.

(b) Condition relating to payment of dues before filling of

appeal/reference

According to the provisions of S. 131 of the Customs Act,

1962124 it has been provided that notwithstanding that a

reference has been made to the High Court or the Supreme

Court or an appeal has been preferred to the Supreme Court,

under this Act before the commencement of the National Tax

Tribunal Act, 2005 sums due to the Government as a result of an

order passed under sub-section (1) of section 129B125 shall be

payable in accordance with the order so passed.

(c) Manner of calculation of limitation period

According to the provisions of S.131A of the Customs Act,

1962126 for the purpose of computing the period of limitation

specified for an appeal or application, the day on which the order

123 Id., p 1.114. 124 Id., p 1.115. 125 Id., p 1.110. 126 Id., p 1.115.

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complained of was served, and if the party preferring the appeal

or making the application was not furnished with a copy of the

order when the notice of the order was served upon him, the

time requisite for obtaining a copy of such order shall be

excluded.

In many cases it is seen that the improper appeals/

references are made by the revenue authorities. The

Commissioner of Central Excise Chandigarh made a reference

on the question having relation to the rate of duty instead of

question of law, it was held that reference application was not

maintainable.127 Similarly In many cases the references are

made casually, not by the competent authorities under the law.

Reference application filed by the Assistant Commissioner failed

because he was not competent to file the same.128 In a case the

reference application was set aside because the application was

not properly drafted and signed.129 In a case Commissioner

authorized the Assistant Commissioner to file reference

application instead of filling the same himself, resulted in failure

127 Commissioner of Central Excise v. ACE Build Pvt. Ltd., 2000, ELT, p 84(Tri.

Delhi). 128 Collector of Central Excise Allahabad v. Technical Associates, 2000, ELT, p

133(Tri. Delhi). 129 Commissioner of Customs Chennai v. Shri Ishwar Lal C. Surana, 2000, ELT, p

547(Tri. Madras)

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of case.130 Reference to the High Court was made on the issue

of valuation for the purpose of assessment of duty and the same

was held not maintainable being hit by the exclusion clause of S.

35G(1) of the Central Excise Act, 1944.131

14. Concluding remarks

It is seen that although a very elaborate procedure has

been prescribed for the manner of filling reference to High

Courts and appeal to Supreme Court but in practice it is noticed

that many a times these done in contrary to the provisions. This

is due to the casual approach, inefficiency and in competency of

the officers handling such matters. These postings are

categorized as non sensitive and accorded least importance.132

Filling and drafting of court cases, appeal and references require

high degree of understanding and knowledge of relevant

provisions of various Statutes. In practice as the branches are

accorded least importance many a time government is taken for

ride by the assesses/ incompetent officers. This results into loss

of government revenue running into crores of rupees.

130 Commissioner of Customs Chennai v. Anz Overseas, 2000, ELT, p 804(Tri.

Madras). 131 Commissioner of Central Excise Hydrabad v. Sri Rayalaseema High Strength

Hypo Ltd., 2000, ELT, p 499(Tri. Madras) 132 Supra note, 12.

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A question mark is also always raised on the competence

of departmental counsels representing these cases in courts.

They are meagerly paid as compared to their counterparts

representing the assesses. Therefore, senior and competent

advocates do not prefer to be on the panel of department

because they get more money by pleading the cases against the

department.

It is also seen that as the departmental counsel gets

payment for hearings and the courts are overburdened these

cases gets adjourned time and again on frivolous reasons

resulting in the inordinate delays in finalisation of the cases. This

also results in unnecessary financial burden on the public and

exchequer.

Therefore, it suggested that the officers who are

dedicated, competent, well conversant with the procedures and

provisions of the law should be posted in such branches. As far

as possible persons having legal background may be posted in

these branches. There should be in house training/ refresher

courses at regular interval to impart training to the officers. The

remuneration of the advocates on panel may be increased to

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attract counsels of merit. Lapses committed in this regard by the

officers must be viewed seriously and not casually.

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