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2013 DIGILAW 1162 (SC)

Union of India v. Hanil Era Textiles Ltd.

2013-10-03

H.L.DATTU, RANJANA PRAKASH DESAI

body2013
ORDER : 1. Delay condoned. 2. Leave granted. 3. This appeal, by special leave, is directed against the judgment and order passed by the High Court of Judicature of Bombay in Writ Petition No. 1718 of 2003, dated 23-2-2011. By the impugned judgment and order, the High Court has set aside the order passed by the Development Commissioner, (Appellant No. 2), dated 4-6-2003. 4. The facts in brief are as follows :- The Respondent No. 1 - M/s. Hanil Era Textiles Ltd. is a 100% export oriented unit in textile sector. The Government had introduced a policy by which 100% export oriented unit is entitled to sell certain percentage of its produce in the Domestic Tariff Area ("the DTA" for short) after obtaining permission of the Development Commissioner. Thereafter, Respondent No. 1 applied for the grant of permission to the Appellant No. 2 for sale of its produce in the DTA for the period commencing from 1-7-1996 to 30-6-1997. The Appellant No. 2 granted permission allowing the DTA sale by its order dated 29-1-2008. Subsequently, the Respondent No. 2 also passed a fresh order granting the DTA sale permission for the year 1997-1998 and 1999-2000. On 4-6-2003, the Appellant No. 2 passed an order reviewing its earlier orders for the year 1997-1998, 1999-2000 and 1996-1997 respectively and cancelled the DTA permission for few years and also reduced the percentage of the production which could be sold in the DTA. 5. It is the correctness or otherwise of the order passed in review dated 4-6-2003 which was in question before the High Court. The High Court has come to the conclusion that the Development Commissioner is not the competent authority to review its own order and in absence of express power, authority cannot confer power of review on itself. Therefore, the Development Commissioner could not have reviewed the order when the power to review is with the Ministry of Commerce and Industry. Accordingly, the High Court has set aside the order passed by the Appellant No. 2, dated 4-6-2003. 6. Being aggrieved by the order passed by the High Court, the appellants are before us in this appeal. 7. Therefore, the Development Commissioner could not have reviewed the order when the power to review is with the Ministry of Commerce and Industry. Accordingly, the High Court has set aside the order passed by the Appellant No. 2, dated 4-6-2003. 6. Being aggrieved by the order passed by the High Court, the appellants are before us in this appeal. 7. Shri P.P. Malhotra, learned Additional Solicitor General appearing for the appellant would contend that the High Court was not justified in holding that the Development Commissioner could not have reviewed its earlier order since the power to review lies with the Ministry of Commerce and Industry. 8. Per Contra, Shri C.A. Sundram, learned senior counsel appearing for the respondents would submit that at present he would not intend to go into the question as to whether the Development Commissioner has the power to review or not. The learned counsel would only submit that before passing an order of review the authority concerned had not issued a show cause notice to the respondent assessee(s). 9. In view of the statement made by Shri Sundaram, we are of the opinion that for the purpose of disposal of this appeal we need not have to pass an order on the issue as to whether the Development Commissioner has the power to review its own order passed earlier. 10. In the instant case, it is not in dispute nor it can be disputed by the Revenue that before passing the review order the Development Commissioner had not issued a show cause notice to the assessee(s) inter alia asking it to show cause as to why the order passed earlier should not be reviewed. In our view, the omission on the part of the Development Commissioner would go to the fundamentals in the sense that no order could be passed against a person without issuing a show cause notice to him/it. This would be in violation of the principles of natural justice and also infringe Article 14 of the Constitution of India. Audi Alteram Partem, as the basic principle of natural justice ensures an opportunity of fair hearing to the parties. Issuance of a show cause notice is a part and parcel of the aforesaid principle which provides that the parties are in a position to defend themselves adequately; after being aware of the exactness of the allegation against them. Audi Alteram Partem, as the basic principle of natural justice ensures an opportunity of fair hearing to the parties. Issuance of a show cause notice is a part and parcel of the aforesaid principle which provides that the parties are in a position to defend themselves adequately; after being aware of the exactness of the allegation against them. The concept of natural justice cannot be put into a strait-jacket formula. The only essential point is that in the given facts of a case, if the person concerned has reasonable opportunity of presenting his case and if the administrative authority have acted fairly, impartially and reasonably. In the instant case, no show cause notice has been issued to the respondent before the review order was passed by the Development Commissioner which had put the Respondent No. 1 at a disadvantage by not allowing them to defend themselves. The aim of the rules of natural justice is to secure justice or to put it negatively to prevent miscarriage of justice and therefore, this doctrine is the most paramount doctrine that goes to the root of all laws and to the concept of justice. The order passed by the Development Commissioner is in contravention to the principles of natural justice and is therefore cannot be sustained. In that view of the matter, we set aside the order passed by the Appellant No. 2, dated 4-6-2003. 11. Now we permit the Ministry of Commerce and Industry to issue an appropriate show cause notice to the Respondent No. 1, if they are of the view that the order passed by the Development Commissioner earlier requires to be reviewed and a fresh order requires to be passed. 12. We further direct that this exercise by the Ministry should initiate within a period of one month from the date of receipt of copy of this order. The respondents are given a month's time thereafter to file a reply, if any. The Ministry of Commerce and Industry would consider the reply so filed by the respondents and pass an appropriate speaking order in accordance with law. The Ministry will complete the entire exercise within three months time from the date of reply. Since we have set aside the review order passed, the consequential orders passed by the authorities pursuant to the review order is also set aside. 13. The civil appeal is disposed of accordingly. 14. Ordered Accordingly.