SCA/1118020/2008 1/8 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 11180 of 2008 For Approval and Signature: HONOURABLE MR.JUSTICE K.A.PUJ HONOURABLE MR.JUSTICE RAJESH H.SHUKLA ========================================================= 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 ? ========================================================= HINGORA INDUSTRIES PVT.LTD. - Petitioner(s) Versus UNION OF INDIA & 1 - Respondent(s) ========================================================= Appearance : MR SN THAKKAR for Petitioner(s) : 1, MR HARIN P RAVAL for Respondent(s) : 1, None for Respondent(s) : 2, ========================================================= CORAM : HONOURABLE MR.JUSTICE K.A.PUJ and HONOURABLE MR.JUSTICE RAJESH H.SHUKLA Date : 09/09/2008 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE K.A.PUJ) SCA/1118020/2008 2/8 JUDGMENT 1. Heard Mr. Mihir Joshi, learned Senior Counsel with Mr. S.N. Thakkar, learned advocate appearing for the petitioner and Mr. Harin P. Raval, learned Assistant Solicitor General appearing for the respondent on advance copy being served on him. Looking to the short issue involved in the petition, the same is taken up for final hearing. 2. The petitioner has filed this petition under Article 226 of the Constitution of India challenging the order passed by the Custom, Excise and Service Tax Appellate Tribunal, Ahmedabad on 7.4.2008, directing the petitioner to deposit an amount of Rs.1 crore towards duty within a period of 12 weeks from the date of order. The petitioner was also directed to file compliance report on or before 2.7.2008. 3. The petitioner has challenged the said order before this Court in the present SCA/1118020/2008 3/8 JUDGMENT petition filed on 23.6.2008. The matter was, however, in the office objections. The objections were removed pursuant to the order passed by this Court on 4.9.2008. 4. Mr.Joshi, learned Senior Counsel appearing for the petitioner has submitted that the order passed by the Tribunal directing the petitioner to deposit a sum of Rs.1 crore is very harsh and looking to the financial position of the petitioner it is not possible to deposit a sum of Rs.1 crore. He has further submitted that the petitioner has very strong case on merits and if the petitioner would not deposit the said amount the appeals which are pending before the Tribunal get frustrated. He has further submitted that while passing an order of deposit of sum of Rs.1 crore the Tribunal has not assigned any reason whatsoever, especially when the order under challenge before the Tribunal was in violation of the SCA/1118020/2008 4/8 JUDGMENT principles of natural justice. The petitioner has applied for time on 5.11.2007 and the petitioner was given to understand that the matter was fixed on 22.11.2007. The impugned order which was challenged before the Tribunal, however, was passed on 19.11.2007. He has, therefore, submitted that without considering this aspect of the matter, the Tribunal has passed the impugned order and hence this Court should exercise its writ jurisdiction under Article 226 of the Constitution of India granting necessary relief, as prayed for in the petition. 5. Mr. Harin P. Raval, learned Assistant Solicitor General appearing for the respondent has submitted that the Tribunal has considered all the aspects of the matter and arrived at the figure of Rs.1 crore by way of pre-deposit and hence this Court should not interfere in the order. He has further submitted that the conduct of the SCA/1118020/2008 5/8 JUDGMENT petitioner is such that no indulgence is required to be shown. During the course of investigation as well as adjudication proceedings and even after adjudication and before the Tribunal as well as before this Court the petitioner has made all attempts to delay the proceedings and thereby to delay the payment of duty. The petitioner has not appeared before the authority despite several notices and summons were issued. No reply was filed and on the basis of materials, available after detailed investigation, duty demand of Rs.3.28 crores was raised against the petitioner and looking to the equivalent amount of penalty under Section 11AC as well as interest under Section 11AB and the penalty of the three directors, deposit of Rs.1 crore cannot be said to be harsh. He has, therefore, submitted that no interference is called for by the Court. 6. Having heard learned advocates appearing for SCA/1118020/2008 6/8 JUDGMENT the respective parties and having gone through the orders of authorities below, we are of the view that the order directing the petitioner to deposit a sum of Rs.1 crore by way of pre-deposit is very harsh and that too in light of the submissions made on behalf of the petitioner at the time of hearing of stay application that the financial position of the petitioner is very weak. Moreover, it is not borne out from the order of the Tribunal as to how the amount of Rs.1 crore was ordered to be deposited. We are not entering into the merits of the matter and we are not expressing any opinion as to whether demand raised by the Revenue authorities is just and proper. We are, however, of the view that the petitioner should not be non-suited, without being considered its appeal on merits, by passing an order of pre-deposit of such amount which may not be complied with. 7. Considering the entire facts and SCA/1118020/2008 7/8 JUDGMENT circumstances of the case, we are of the view that interest of justice would better be served if the petitioner is ordered to deposit a sum of Rs.25 lacs within six weeks from today. Accordingly, the petitioner is hereby directed to deposit a sum of Rs.10 lacs within two weeks and remaining amount of Rs.15 lacs within four weeks thereafter. In any case, the entire amount as indicated above should be deposited within six weeks from today. On deposit of Rs.25 lacs within six weeks, the appeals, which are pending before the Tribunal can be taken up for hearing by the Tribunal as per its convenience. Learned Counsel has submitted that the appeals are still pending before the Tribunal and hence the said appeals can be taken up for hearing only after deposit of this amount. 8. It is made clear that if the amount of Rs.25 lacs is not deposited within the period SCA/1118020/2008 8/8 JUDGMENT of six weeks from today all the appeals pending before the Tribunal shall stand dismissed for non-compliance of the order of the Tribunal, as modified by this Court. It is also made clear that as and when appeals are fixed for hearing the petitioner shall co-operate in the hearing and disposal of appeals. 9. Subject to the aforesaid directions and observations, this petition is accordingly disposed of without any order as to costs. (K. A. PUJ, J.) ( RAJESH H. SHUKLA, J.) kks