SCA/27972/2007 1/4 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 27972 of 2007 With SPECIAL CIVIL APPLICATION No. 27973 of 2007 For Approval and Signature: HONOURABLE MR.JUSTICE M.S.SHAH and HONOURABLE MR.JUSTICE AKIL KURESHI ================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================= JITENDRA TEXTILES - Petitioner(s) Versus ASSISTANT COMMISSIONER CENTRAL EXCISE & CUSTOMS - Respondent(s) ================================================= Appearance : MR UTPAL M PANCHAL for Petitioner(s) : 1, MR HARIN P RAVAL for Respondent(s) : 1, ================================================= CORAM : HONOURABLE MR.JUSTICE M.S.SHAH and HONOURABLE MR.JUSTICE AKIL KURESHI Date : 16/04/2008 COMMON ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE M.S.SHAH) Leave to amend. SCA/27972/2007 2/4 JUDGMENT Rule. Mr Harin Raval, learned Assistant Solicitor General waives service of Rule for the respondent in both the petitions. In the facts and circumstances of the case, the petitions are taken up for final disposal today. 2. In these petitions under Article 226 of the Constitution, the petitioners – Jitendra Textiles and Ajay Textiles – two partnership firms having common partners have challenged the action of the Assistant Commissioner, Central Excise and Customs (Preventive), Surat in applying the seals on the factories at Block Nos.125/21 and 125/22, Mouje Mota Borasara at Kim, Taluka Olpad in Surat District. 3. The respondent-officer applied the seals on the above factories on 5.3.2003 on account of the violation of the terms and conditions of the licence of Export Oriented Unit which was obtained by M/s. Siddhi Vinayak Export. M/s. Siddhi Vinayak Export had taken on lease the factories in question from the petitioners. The petitioners filed suits before the Civil Court wherein the present respondent as well as M/s. Siddhi Vinayak Export were joined as defendants. In the said suits, the petitioners also filed interim injunction applications Exh.5 seeking direction against the present respondent to permit the petitioners to run the factories. It appears that while the Civil Court granted interim injunction and the District Court, Surat confirmed the same, in Special Civil Applications filed by the Department, this Court set aside the orders of the Civil Court, as confirmed by the District Court, and directed the petitioners to make representations to the Department and directed the Department to consider the petitioners' representations sympathetically. The petitioners submitted representations on 10.7.2007. Since the representations were not decided, the factories were lying idle and the petitioners were not in a position to carry on any business, the present petitions came to SCA/27972/2007 3/4 JUDGMENT be filed in October 2007. 4. At the hearing of these petitions, Mr Utpal Panchal, learned advocate for the petitioners has submitted that without prejudice to the petitioners' rights and contentions, the petitioners are ready to pay the dues of M/s. Siddhi Vinayak Export quantified at Rs.6,68,850/- and that the petitioners will pay the said dues in installments provided the respondent permits the petitioners to run the factories in question. It is also submitted that initially the petitioners will deposit a sum of Rs.1 lakh by 30th April 2008 and thereupon the respondent may permit the petitioners to run the factories so that the petitioners can restart their business and from the income generated by running the factories, the petitioners will be able to pay the balance amount of Rs.5.68,850/-. 5. Having heard the learned advocate for the petitioners and Mr Harin Raval, learned Assistant Solicitor General for the respondent, we are of the view that in the facts and circumstances of the case, the interests of justice would be served if the undertaking dated 16.4.2008 being tendered on behalf of the petitioners is taken on record and on the basis of the assurance given therein, the respondent is directed to permit the petitioners to run the factories, without prejudice to the rights and contentions of the parties. 6. Accordingly, the respondent is directed to remove the seals from the petitioners' factories and to permit the petitioners to run the factories, after the petitioners deposit a sum of Rs.1 lakh. The balance amount payable by M/s. Siddhi Vinayak export, which is quantified at Rs.5,68,850/- shall be paid in ten equal monthly installments; the first such installment being payable on 1st November 2008 and the subsequent monthly installments shall be paid on the first day of each succeeding month i.e. from 1st December 2008 onwards. SCA/27972/2007 4/4 JUDGMENT The seals shall be removed from the factories after the petitioners deposit the first installment of Rs.1 lakh with the respondent. It is clarified that the undertaking given on behalf of the petitioners is without prejudice to the petitioners' rights and contentions which may be raised in appropriate proceedings before the appropriate forum. It is also clarified that this order is only to enable the petitioners to run their own factories which were leased out by the petitioners to M/s. Siddhi Vinayak Export and the petitioners were prohibited by the Excise Department from running the said factories on account of nonpayment of dues by M/s. Siddhi Vinayak Export. Hence, this order does not absolve M/s. Siddhi Vinayak Export from its liability towards the Excise Department and it is expected that the Department shall continue its efforts to recover its dues from M/s. Siddhi Vinayak Export. This will also not prejudice the rights of the petitioners to recover the dues from M/s. Siddhi Vinayak Export which the petitioners are presently paying to the Excise Department. 7. Both the petitions are accordingly disposed of. Rule is made absolute in the aforesaid terms. Direct service is permitted. (M.S. SHAH, J.) (AKIL KURESHI, J.) zgs/-