1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY NAGPUR BENCH : NAGPUR WRIT PETITION NO.626 OF 2010 (Kotak Mahindra Bank Ltd. and another vs. The Nagpur Municipal Corporation and others) __________________________________________________________________ Office Notes, Office Memoranda of Coram, appearances, Court's orders Court's or Judge's orders or directions and Registrar's orders. CORAM : D.D. SINHA AND R.C. CHAVAN, JJ. DATED : APRIL 6, 2010 Heard Shri Manohar, learned Counsel for the petitioners, and Shri Mishra, learned Counsel for the respondent nos.1 to 3. In the present petition, the grievance of the petitioners is against issuance of notices dated 1.12.2009, 9.12.2009 and 1.1.2010 by the respondent no.1 Corporation. Shri Manohar, learned Counsel for the petitioners, states that notice dated 1.12.2009 is a 2 show cause notice issued by the respondent Corporation whereby petitioners were called upon to show cause as to why action of ten times penal duty should not be imposed against the petitioner Bank as per Octroi Rule 14(f) and 14(h) for non-compliance of procedure applicable while importing gold coins into the city. It is submitted that the petitioners were asked to submit explanation within three days from the receipt of the said show cause notice, failing which action under the above referred rules will be initiated. It is contended that the time which was given to the petitioners was so short that the petitioners in spite of best efforts could not submit the explanation/reply to the said show cause notice to the respondent Corporation. The respondent Corporation in the absence of any reply, issued bill for penal octroi duty under Section 154(1) and (2) read with Section 374 of the City of Nagpur Corporation Act, 1948, dated 9.12.2009 as well as demand notice dated 1.1.2010 under Section 155 of the said Act. It is contended that as per Rule 44 of the Octroi Rules for the Assessment, Collection and 3 Refund of Cess (Octroi Duty) Rules, 1966, if the importer has not paid any octroi duty or failed to pay full octroi duty, the Municipal Commissioner shall give him sufficient notice to show cause why ten times duty on such goods should not be recovered from him and after taking into consideration the importer's explanation, may recover ten times duty leviable in accordance with provisions of Chapter XII of the City of Nagpur Corporation Act. It is further contended that in the instant case, the show cause notice dated 1.12.2009 issued by the respondent Corporation gave only three days' time to the petitioners to submit explanation/reply, which virtually amounts to denial of reasonable opportunity to the petitioner and, therefore, the action of the respondent Corporation is in contravention of Rule 44, hence, petitioners may be permitted to submit their explanation pursuant to the show cause notice dated 1.12.2009 before the respondent Corporation and the respondent Corporation may be directed to grant reasonable opportunity of hearing to the petitioners and take a fresh decision in accordance with law and procedure applicable in this 4 regard. Shri Mishra, learned Counsel for the respondent nos.1 to 3, has not disputed that as per show cause notice dated 1.12.2009 issued by the respondent Corporation, petitioners were called upon to show cause as to why action of ten times penal duty should not be imposed, the time given for submitting explanation to the said show cause notice was only of three days from the date of receipt of the said show cause notice. We have considered the contentions of the learned Counsel for the parties. Rule 44 of the Octroi Rules contemplates giving of sufficient notice to the importer in case of evasion of octroi duty to show cause why ten times penal duty on such goods shall not be recovered from him and after taking into consideration the importer's explanation, the Commissioner may recover ten times duty leviable in accordance with provisions of Chapter XII of the City of Nagpur Corporation Act. In the instant case, the time given to the 5 petitioners to submit explanation to the show cause notice was only of three days which, in our view, cannot be termed as “sufficient time” to submit explanation. It is also not in dispute that the respondents without waiting for the explanation or reply from the petitioners issued the bill for penal octroi duty under Section 154(1) and (2) read with Section 374 of the Act of 1948 and notice of demand under Section 155(1) of the Act of 1948. It is in these circumstances, we are of the view that the action being violative of principles of natural justice, respondent Corporation needs to re-consider the issue of imposing ten times penal duty afresh in accordance with law after giving reasonable opportunity to the petitioners to submit their explanation pursuant to the show cause notice dated 1/12/2009 and decide the issue within a period of three weeks after giving the reasonable opportunity of hearing to the petitioners. The petitioners to appear on 20/4/2010 before the Assistant Commissioner (Octroi). Needless to mention that the bill for penal octroi duty dated 9.12.2009 as well as notice of demand 6 dated 1.1.2010 shall not come in the way of re-consideration of the issue by the respondent Corporation and shall lose their efficacy on taking a fresh decision by the respondent Corporation. With these observations and directions, the petition is disposed of. JUDGE JUDGE khj