KANPUR CIGARETTES (P) LTD. v. CEGAT — 1994 DIGILAW 972 (ALL)

M. C. AGARWAL, J. ( 1 ) THIS petition under Article 226 of the Constitution of India challenges the orders dated 19th august, 1993, and 27th January, 1994, passed by the Customs, Excise and Gold (Control)Appellate Tribunal, New Delhi, under the proviso to Section 35f of the Central Excises and Salt act, 1944. ( 2 ) COUNTER and rejoinder affidavite have been exchanged and the petition has been finally heard at the admission stage itself. ( 3 ) M/s. GTC Industries Limited, petitioner No. 2, is a manufacturer of cigarettes. It has its own manufacturing facilities and also gets the cigarettes manufactured by other manufacturers, including M/s. Kanpur Cigarettes (P) Limited, petitioner No. l. The Excise authorities claimed to have discovered that they were avoiding excise duty and, therefore, the Collector, Central excise, Kanpur, passed an order levying a sum of Rs. 1,01,20,221/- on the petitioners as excise duty and additional excise duty. This amount was levied on the two petitioners jointly. In addition, both were ordered to pay penalties of Rs. 60,000/- each. Orders were passed levying various amounts of excise duty and penalties by the Collectors of Central Excise, Bombay, baroda, Hyderabad and Chandigarh on M/s. GTC Industries Limited, M/s. Sri Chandra Tobacco limited, M/s. J and K Cigarettes Limited, M/s. Suvarna Filter and Tobacco Products Limited and m/s. Universal Tobacco (P) Limited. ( 4 ) THE petitioners preferred separate appeals to the Customs, Excise, Gold (Control) Appellate tribunal, New Delhi, and applied for waiver of the condition of deposit under Section 35f of the act. The other parties also filed appeals against the orders made against them and they also applied for waiver of the condition of pre-deposit of the dues under Section 35f of the Act. Thus, there were eight appeals and eight applications under the proviso to Section 35f of the Act which were heard together and decided by a common order dated 19th August, 1993. ( 5 ) IN the case of the present petitioners, only the deposit of the amount of penalty was waived and they were required to deposit the sum of Rs. 1,01,20,221/- jointly which was the amount of the excise duty levied on them. ( 6 ) AFTER the aforesaid order, several writ petitions were filed before the High Court of Delhi, two of which were by the present petitioners. 1,01,20,221/- jointly which was the amount of the excise duty levied on them. ( 6 ) AFTER the aforesaid order, several writ petitions were filed before the High Court of Delhi, two of which were by the present petitioners. One of them was Writ No. 5127 of 1993 filed by the petitioner No. 2 and was dismissed as withdrawn by order dated 30th November, 1993. The order of the High Court is quoted in extenso in Annexure a-l which is the copy of the impugned order dated 27th January, 1994, which shows that that writ petition was argued for more than two days and it was at the end of the lengthy arguments that the petitioner prayed for withdrawal of the writ petition. The High Court allowed the withdrawal subjecting the petitioner to pay Rs. 50,000/- as costs. The other writ petitions were also dismissed as withdrawn on the same day. Thereafter, the petitioners and the others against whom the orders were passed again moved seven applications in their respective appeals for the so-called modifications of the earlier order dated 19th August, 1993. It was contended on behalf of the excise authorities that an application for modification was not maintainable. The Tribunal, however, treated all these applications as fresh applications, but finding no ground to make a different order rejected all of them. It is in these circumstances that the petitioners M/s. Kanpur Cigarettes (P) Limited and M/s. [gtc] industries Limited have filed the present writ petition in respect of the order by which a sum of rs. 1,01,20,221 /- was levied on them as excise duty in addition to Rs. 60,000/- each as penalty. The excise duty relates to the period February, 1985, to Jaunary, 1986. ( 7 ) THE learned counsel for the petitioners contended that in the earlier order dated 19th August, 1993, the Tribunal had itself observed that the companies are making very small profits and in case pre-deposit of the entire amount is insisted upon, undue financial hardship will be caused to the companies. ( 7 ) THE learned counsel for the petitioners contended that in the earlier order dated 19th August, 1993, the Tribunal had itself observed that the companies are making very small profits and in case pre-deposit of the entire amount is insisted upon, undue financial hardship will be caused to the companies. According to him, in face of this finding, the Tribunal should have waived the condition of pre-deposit of the dues in accordance with the proviso to Section 35f of the Act which authorises the Tribunal to dispense with such deposit if it is of the opinion that the deposit of duty demanded or penalty levied would cause undue hardship to the appellant. ( 8 ) THE learned Standing Counsel for the Union of India Sri U. N. Shar-ma, on the other hand, contended that the petitioners had challenged the order of the Tribunal dated 19th August, 1993, before the Delhi High Court and having withdrawn their writ petition without seeking permission to file a fresh petition, this subsequent petition is not maintainable. He placed reliance on a judgment of the Honble Supreme Court in Serguja Transport Service v. S. T. A. Tribunal (A. I. R. 1957 S. C. 88) in which it was held that the petitioner after withdrawing a writ petition filed by him in the High Court under Article 226 of the Constitution of India without the permission to institute a fresh writ petition, cannot file a fresh writ petition in respect of the same cause of action in the High Court under that Article. ( 9 ) THE learned counsel for the petitioners contended that the writ petition that was argued before the Tribunal did not relate to the present dues and the petition filed by them was not even argued and, therefore, they could file a fresh petition and the bar would not apply to their case. It was also argued that, in any case, the petitioners having filed a fresh petition for waiver before the tribunal which has been disposed of by a subsequent order dated 27th January, 1994, the petitioners can challenge the subsequent order. ( 10 ) A perusal of the record shows that all the persons against whom different orders were passed had almost simultaneously filed appeals before the Tribunal and their applications under the proviso to Section 35f of the Act were disposed of by a common order. ( 10 ) A perusal of the record shows that all the persons against whom different orders were passed had almost simultaneously filed appeals before the Tribunal and their applications under the proviso to Section 35f of the Act were disposed of by a common order. Then, they filed writ petitions before the Delhi High Court, one of which was argued and was, ultimately, withdrawn. The other writ petitions were also withdrawn the same day. Therefore, it cannot be said that the withdrawal was independent of the fate of writ petition No. 5127 of 1993. Then, the judgment of the Honble Supreme Court, referred to above, does not make any exemption in the case of a petitioner who withdraws the writ petition without arguing it. The Honble Supreme Court held that a petitioner who wishes to file another writ petition on the same cause of action must obtain the leave of the Court to institute a fresh writ petition failing which the subsequent writ petition would not be maintainable. Therefore, in my view, as far as the earlier order dated 19th August, 1993, is concerned, it is not permissible to the petitioners to challenge the same in the present writ petition. ( 11 ) THAT, however, does not conclude the matter because the petitioners are also challenging the subsequent order dated 27th January, 1994, which the Tribunal has passed treating the subsequent applications of the petitioners as fresh applications. A perusal of the Tribunals order dated 19th August, 1993, shows that the Tribunal has recorded a finding that the companies are making very small profits and in case pre-deposit of the entire amount is insisted upon, undue financial hardship will be caused to the companies. This is, however, a general observation and does not specifically mention any individual company though there were six appellants before it in eight appeals. ( 12 ) AS regards M/s. Kanpur Cigarettes (P) Limited, petitioner No. 1, its case before the Tribunal was that it was suffering losses and its balance sheet showed an accumulated loss of Rs. 2,50,00,000/ -. In the present writ petition also, it has been contended that the petitioner is not capable to deposit the amount levied on it by the orders, referred to above. 2,50,00,000/ -. In the present writ petition also, it has been contended that the petitioner is not capable to deposit the amount levied on it by the orders, referred to above. ( 13 ) WITH the counter affidavit, the respondents have annexed a copy of the balance sheet of M/s. Kanpur Cigarettes (P) Limited, petitioner No. 1, which shows the carried forward loss at Rs. 2,57,97,734/- and the loss for the year ending 31st March, 1993, at 1,92,33,095/ -. Thus, apparently, petitioner No. 1 is running in losses and in face of the Tribunals observations, referred to above, there was no justification for the Tribunal to direct it to deposit the entire sum of Rs. 1,01,20,221/ -. It may be mentioned that the petitioner No. 1 had filed an independent appeal as well as a separate application for waiver. The Tribunal has directed both the petitioners to deposit the aforesaid sum jointly which should not have been done. Since all the applications were taken up together, the petitioner M/s. Kanpur Cigarettes (P) Limited has not been properly dealt with in so far its application for waiver was concerned and instead of making an independent order on this petitioners application, the Tribunal wrongly directed it and the other petitioner to deposit the aforesaid sum jointly. There is nothing in the counter affidavit filed on behalf of the respondents to show that the petitioner No. 1 is in such a financial position that it can deposit the whole amount without facing undue hardship. In my view, therefore, so far as the petitioner No. 1, M/s. Kanpur Cigarettes (P) Limited, is concerned, it deserved concession under the proviso to Section 35f of the Act and, in my view, the petitioners appeal should be heard on merits if the petitioner deposits Rs. 5,00,000/- with the Adjudicating Authority, the condition of pre-deposit of the balance shall stand dispensed with. ( 14 ) AS regards M/s. GTC Industries Limited, Petitioner No. 2, the counter affidavit and the documents filed therewith show that it is a very big company having gross assets of more than hundred crores. The amount required to be deposited by the Tribunal was only Rs. 1,01,20,221/out of which Rs. 5,00,000/- will be deposited by the petitioner No. 1. The amount required to be deposited by the Tribunal was only Rs. 1,01,20,221/out of which Rs. 5,00,000/- will be deposited by the petitioner No. 1. Therefore, the balance to be deposited by it is not a very large amount looking to its size and the accounts as annexed to the counter affidavit. So far as the petitioner No. 2 is concerned, I am not satisfied that in so far as the disputed amount is concerned, it would face any undue hardship if it is required to deposit the same. ( 15 ) FOR the reasons aforesaid, this writ petition is partly allowed and it is ordered that the petitioner No. 1 shall deposit Rs. 5,00,000/- with the adjudicating authority within a period of one month from today. On deposit of the said amount, the requirement of deposit of the rest of the dues shall stand dispensed with. ( 16 ) AS regards petitioner No. 2, it shall deposit Rs. 96,20,221 /- with the adjudicating authority within one month from today. In case of failure of the petitioners to deposit the amount aforesaid, further consequences for non-compliance with the provisions of Section 35f of the central Excises and Salt Act shall follow. In the circumstances of the case, the parties shall bear their own costs. .