Gauhati High Court: A writ petition claiming violation of principles of natural justice since excise duty was levied on the petitioner retrospectively without a show-cause notice, was dismissed as sans merit by a Division Bench comprising of Ajit Singh, CJ. And Manoj Bhuyan, J.

The petitioner was a beneficiary under a certain industrial policy wherein the industries were exempted to pay excise duty for a certain period of time. However, subsequently the government amended the said policy and levied excise duty on such industries with retrospective effect. The validity of such amendment was upheld by the Supreme Court in R.C. Tobacco (P) Ltd. v. Union of India, (2005) 7 SCC 725. The petitioner, however, challenged the recovery order under which it was liable to pay the excise duty so levied, on the ground that no recovery proceedings could have been initiated without a show cause notice under Section 11A of the Excise Act.

The High Court settled the controversy by relying on the Supreme Court decision arising out of same controversy, in Dharampal Satyapal Ltd. v. CCE, (2015) 8 SCC 519. The Supreme Court in this case held that although non issuance of show-cause notice prior to passing of recovery order was in violation of principles of natural justice, however in the fact situation of the case, since the quantification of amount was not under dispute, the issuance of notice to the petitioner would have been an empty formality and the case was squarely covered by “useless formality theory”. Further, the legal consequence of amendment to the industrial policy was that the amount with which the appellant was benefited under the said policy became refundable. Even if the notice was issued, the appellant could not take any plea to retain the said amount on any ground whatsoever. In such a situation, issuance of notice would be a futile exercise and the case was covered under useless formality theory.

In light of the above, the Court held that the instant controversy stood covered by the above-mentioned decision of the Supreme Court. Thus, the petition was dismissed holding it to be sans merit. [M/s Dharampal Satyapal Ltd. v. Union of India, 2018 SCC OnLine Gau 62, order dated 06.03.2018]

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