Case: M/S. Mangalam Organics Ltd Vs. Union Of India

to the judgment of this Court in the case of Common Cause v. Union of India and Others, 2003(4) R.C.R.(Civil) 685 : 2003(2) R.C.R.(Rent) 552 : (2003) 8 SCC 250. In that case, though the legislature had made amendments in the Delhi Rent Act, it was left to the Government to notify the date of coming into force the said amendments. Government did not notify any date. A writ was filed seeking issuance of mandamus to the Government to notify the date, which was dismissed by the High Court. While approving the said decision in the aforesaid judgment, the Court referred to various earlier judgments on the subject. It was held that not only Parliament is empowered to give such a power to the executive to decide when the Act is to be brought into force, but also held that mandamus cannot be issued to the Government to notify the amendments. In the process, the Court also made the following observations which are relevant in the present context: "27. From the facts placed before us it cannot be said that Government is not alive to the problem or is desirous of ignoring the will of the Parliament. When the legislature itself had vested the power in the Central Government to notify the date from which the Act would come into force, then, the Central Government is entitled to take into consideration various facts including the facts set out above while considering when the Act should be brought into force or not. No mandamus can be issued to the Central Government to issue the notification contemplated under Section 1(3) of the Act to bring the Act into force, keeping in view the facts brought on record and the consistent view of this Court." 35. Various judgements cited by the appellant would have no application in the instant case as all these judgments pertain to judicial review of administrative action. In such cases power of the Court to issue mandamus certainly exists when it is found that a public authority/executive is not discharging its statutory duty.36. The matter can be looked into from another angle as well. When `power is given to the Central Government to issue a notification to the effect not to recover duty of excise or recover lesser duty than what is normally payable under the Act, for deciding whether to issue such a Notification or not, there may be various considerations in the mind of the Government. Merely because conditions laid in the said provisions are satisfied, would not be a reason to necessarily issue such a notification. It is purely a policy matter. No doubt, the principle against arbitrariness has been extended to subordinate legislation as well (See : Indian Express Newspapers, Bombay v. Union of India, (1985) 1 SCC 641 ). At the same time, the scope of judicial review in such cases is very limited. Where the statute vests a discretionary power in an administrative authority, the Court would not interfere with the exercise of such discretion unless it is made with oblique end or extraneous purposes or upon extraneous considerations, or arbitrarily, without applying its mind to the relevant considerations, or where it is not guided by any norms which are relevant to the object to be achieved.37. In the counter affidavit filed by the respondent, it is categorically mentioned that the policy of the Government is not to issue the notification under Section 11C of the Act when it benefits only a few assesses. It is mentioned that the specific policy of the Government is that when a large section of trade is affected and any relief is proposed to be given, a notification under Section11C of the Act is issued. When the reasons furnished by the Government in not exercising its power to issue notification under Section 11C of the Act are seen in this perspective, namely, such a notification, if issued, is going to benefit only two units, we find them to be valid and justified. While dealing with the challenge to the constitutional validity of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, in the case of Madria Chemicals Ltd. Etc. Etc. v. Union of India and others Etc. Etc., 2004(2) R.C.R.(Civil) 665 : (2004) 4 SCC 311 , this Court noted that the legislature came up with the said legislation as a matter of policy to have speedier legal method to recover the dues. It was held that such a policy decision of the legislature could not be faulted with nor was it a matter to be gone into by the courts to test the legitimacy of such a measure relating to financial policy. As already pointed out above, it is impermissible for this Court to tinker with such policy decision more particularly when it is found that the decision is not irrational and is founded on valid considerations. It has also to be borne in mind that in the instant case the appellant has already paid the duty. Section 11C contemplates those situations where duty is not paid. It does not cover the situation where duty is paid and that is to be refunded.38. Examination of the matter in the aforesaid perspective would provide an answer to most of the arguments of the appellants. It would neither be a case of discrimination nor it can be said that the appellants have any right under Article 14 or Article 19(1)(g) of the Constitution which has been violated by non-issuance of notification under Section 11C of the Act. Once the appellant accepts that in law it was liable to pay the duty, even if some of the units have been able to escape payment of duty for certain reasons, the appellant cannot say that no duty should be recovered from it by invoking Article 14 of the Constitution. It is well established that the equality clause enshrined in Article 14 of the Constitution is a positive concept and cannot be applied in the negative.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]We have bestowed our serious consideration that this case deserves to the issues involved.QUESTION NO.When the matter is examined taking into consideration all the facts in totality, we are of the view that there is no clinching evidence to suggest the existence of a general practice not to levy excise duty. Under the impression that it was to be demanded from registered units and five such registered units were, in fact, paying the duty, show cause notices were issued to the remaining two units, namely, the appellant and Gurukripa. That itself negates the argument of existence of general practice of not levying the duty of excise. It is stated at the cost of repetition that merely because some unregistered firms which were initially getting the SSI exemption, but omitted to be covered under the Act on their crossing the SSI limits, would not, in our opinion, establish any such practice.29. In this behalf, it also needs to be highlighted that as far as the Department is concerned, it had taken a categorical stand that even those units which are using Bhatti method for manufacture of Turpentine and Rosin were covered by the Act and that was the reason for issuing of show cause notices to the two units. This view, which the Department had nurtured while issuing the notices, has been vindicated in view of the judgment of this Court in Gurukripa Resins Private Limited. Interestingly, after the said judgment, even the appellant paid the duty of excise. The entire effort now is to recover back the said duty by seeking issuance of a notification under Section 11C of the Act. Such a situation, to our mind, cannot be countenanced.QUESTION NOS. 2 & 3In view of our answer to Question No.1, it may not even be necessary to deal with these two questions. However, since the Department itself proceeded on the basis that there was a general practice, we would like to discuss these issues as well on merits. These can be taken together for discussion.30. Insofar as the argument based on obligation of the Government to issue such a notification is concerned, a clear distinction is to be made between the duty to act in an administrative capacity and the power to exercise statutory function. If a public authority is foisted with any duty to do an act and fails to discharge that function, mandamus can be issued to the said authority to perform its duty. However, that is done while exercising the power of judicial review of an administrative action. It is entirely different from judicial review of a legislative action.Various judgements cited by the appellant would have no application in the instant case as all these judgments pertain to judicial review of administrative action. In such cases power of the Court to issue mandamus certainly exists when it is found that a public authority/executive is not discharging its statutory duty.36. The matter can be looked into from another angle as well. When `power is given to the Central Government to issue a notification to the effect not to recover duty of excise or recover lesser duty than what is normally payable under the Act, for deciding whether to issue such a Notification or not, there may be various considerations in the mind of the Government. Merely because conditions laid in the said provisions are satisfied, would not be a reason to necessarily issue such a notification. It is purely a policy matter. No doubt, the principle against arbitrariness has been extended to subordinate legislation as well (See : Indian Express Newspapers, Bombay v. Union of India, (1985) 1 SCC 641 ). At the same time, the scope of judicial review in such cases is very limited. Where the statute vests a discretionary power in an administrative authority, the Court would not interfere with the exercise of such discretion unless it is made with oblique end or extraneous purposes or upon extraneous considerations, or arbitrarily, without applying its mind to the relevant considerations, or where it is not guided by any norms which are relevant to the object to be achieved.37. In the counter affidavit filed by the respondent, it is categorically mentioned that the policy of the Government is not to issue the notification under Section 11C of the Act when it benefits only a few assesses. It is mentioned that the specific policy of the Government is that when a large section of trade is affected and any relief is proposed to be given, a notification under Section11C of the Act is issued. When the reasons furnished by the Government in not exercising its power to issue notification under Section 11C of the Act are seen in this perspective, namely, such a notification, if issued, is going to benefit only two units, we find them to be valid and justified. While dealing with the challenge to the constitutional validity of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, in the case of Madria Chemicals Ltd. Etc. Etc. v. Union of India and others Etc. Etc., 2004(2) R.C.R.(Civil) 665 : (2004) 4 SCC 311 , this Court noted that the legislature came up with the said legislation as a matter of policy to have speedier legal method to recover the dues. It was held that such a policy decision of the legislature could not be faulted with nor was it a matter to be gone into by the courts to test the legitimacy of such a measure relating to financial policy. As already pointed out above, it is impermissible for this Court to tinker with such policy decision more particularly when it is found that the decision is not irrational and is founded on valid considerations. It has also to be borne in mind that in the instant case the appellant has already paid the duty. Section 11C contemplates those situations where duty is not paid. It does not cover the situation where duty is paid and that is to be refunded.38. Examination of the matter in the aforesaid perspective would provide an answer to most of the arguments of the appellants. It would neither be a case of discrimination nor it can be said that the appellants have any right under Article 14 or Article 19(1)(g) of the Constitution which has been violated by non-issuance of notification under Section 11C of the Act. Once the appellant accepts that in law it was liable to pay the duty, even if some of the units have been able to escape payment of duty for certain reasons, the appellant cannot say that no duty should be recovered from it by invoking Article 14 of the Constitution. It is well established that the equality clause enshrined in Article 14 of the Constitution is a positive concept and cannot be applied in the negative.