Case: Garware Plastics &amp; Polyester Limited &amp; Another Vs. Union of India &amp; Others

principle that questions of construction of all legislation, primary or secondary, are questions of law to be determined authoritatively by Courts of law; that errors in construing primary or secondary legislation made by inferior Tribunals that are not courts of law, however specialised and prestigious they may be, are subject to correction by judicial review". A breakthrough made by the (Anisminics case)6, (1969)2 A.C. 147 (approved by our Supreme Court in (M.L. Sethi v. R.P. Kapoor)7, A.I.R. 1972 S.C. 2379 was that as respects the administrative Tribunals and authorities, the old distinction between errors of law that went to jurisdiction and errors of law that did not, was for practical purposes abolished. Any error of law that could be shown to have been made by these Tribunals in the course of reaching their decision on matters of facts would result in their having asked themselves a wrong question with the result that the decision they reached would be a nullity. Consequently, it is possible to argue as has been done in (ACT Construction v. Customs & Excise)8, (1981)1 W.L.R. 49, at 54 "Once you have the primary facts established, then....the question is a question of law for the judges to decide."12. The three exempting notifications adumbrated above are an exercise of delegated legislation and there is no gain saying the fact that the final interpretation of the notifications and the application thereof to the facts of a particular case would belong to the courts by way of judicial review. However, what we find in the present petition is that the petitioner has come too early to this Court; to wit, post-haste after the show cause notices were received by it, without even caring to reply to the same. What the petitioner should have done, in the words of the Supreme Court in (Pooran Mal v. Director of Inspection (Investigation) of Income-tax, New Delhi and others)9, A.I.R. 1974 S.C. 348, is "to tell the true facts to the officer" and it will then be for that officer to ascertain the true nature of the transactions.1 3. The petitioner has not been able to canvass at the Bar that the show cause notices ex facie or read in the context of the other plethora of admitted facts point out to one and only one conclusion, namely, that the petitioner has been granted a right to avail of or not to avail of the exemption granted by the earlier notifications and hence the show cause notices should be quashed. The matter will have to be gone into in depth; the details of the goods manufactured, the correspondence entered into by the petitioner with the Government and the Collectorate, the practice of issuing exemption under section 25(l) of the Customs Act and the propriety of conferring an option by delegated legislation on an assessee to elect between two rates of taxes needs a detailed examination. Writ jurisdiction would hardly be a substitute for the hierarchial statutory remedies provided in the Act-more so when there is not even a first determination about the liability of the petitioner by the officer in the lowest category. If the petitioner is allowed to invoke the writ jurisdiction in such a case, will not another competitor seek a writ of mandamus against the Revenue-as was done in (Inland Revenue Commissioners v. National Federation of Self employed and Small Business Ltd.)10, (1982) A.C. 617-alleging that- Revenue is granting a sort of concession to Garwares by allowing them to choose between a higher and a lower rate of taxation They may argue that this in effect is no election at all as any man of business will choose to pay a lesser tax. As observed by the Supreme Court in Dunlops case (supra), allowing the present writ petition would be short circuiting the procedure established by law, namely, that of statutory appeals. Nor is the petitioner able to show that an extraordinary situation has presented itself in this particular case or what the officers of the Collectorate have done by issuing the show cause notices is in breach of , "a fundamental principle of justice" or "contrary to the general law of the land" as observed in Norths case, (supra).14. A collateral attack was made on the letter dated 19-11-1983 by which the Under Secretary in the Department of Revenue had, after referring to its communication dated 7th July, 1983, informed the petitioner that-it should contact the concerned Collector of Central Excise in the matter to whom the necessary instructions have been issued". This phrase of instruction has been made a peg on which to hang an argument that the Collectorate have been given some secret supervening instructions to decide the matter in a particular way. This insinuation has been stoutly denied by the Revenue. It is true that the nucleus of an administrative structure like the Central Excise will be a planning and controlling body like the Central Board of Direct Taxes for the Income-tax Department and Central Board of Excise and Customs for the indirect taxes, who, on a periodical review of the situation, would issue instructions to thousands of officers spread all over the length and breadth of India in the matter of execution of their duties in the best possible manner. The petitioner has not been able to show that any secret instructions were given to the concerned officials, but we would leave this question open to be reagitated before the concerned officer.15. It was also urged at the Bar that the classification of the goods was made by the Assistant Collector on 2nd August, 1983 and that if the same person hears the case being the subject-matter of the two show cause notices, it would be an infraction of the principle of natural justice as it is likely that he may be biased against the petitioner. We were also informed that the said Assistant Collector has since been transferred and that the proceedings would not be heard by him. Hence this argument does not avail Counsel.

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

Explanation:
0[ds]12. The three exempting notifications adumbrated above are an exercise of delegated legislation and there is no gain saying the fact that the final interpretation of the notifications and the application thereof to the facts of a particular case would belong to the courts by way of judicial review. However, what we find in the present petition is that the petitioner has come too early to this Court; to wit,after the show cause notices were received by it, without even caring to reply to the same. What the petitioner should have done, in the words of the Supreme Court in (Pooran Mal v. Director of Inspection (Investigation) ofNew Delhi and others)9, A.I.R. 1974 S.C. 348, is "to tell the true facts to the officer" and it will then be for that officer to ascertain the true nature of the transactions.1 3. The petitioner has not been able to canvass at the Bar that the show cause notices ex facie or read in the context of the other plethora of admitted facts point out to one and only one conclusion, namely, that the petitioner has been granted a right to avail of or not to avail of the exemption granted by the earlier notifications and hence the show cause notices should be quashed. The matter will have to be gone into in depth; the details of the goods manufactured, the correspondence entered into by the petitioner with the Government and the Collectorate, the practice of issuing exemption under section 25(l) of the Customs Act and the propriety of conferring an option by delegated legislation on an assessee to elect between two rates of taxes needs a detailed examination. Writ jurisdiction would hardly be a substitute for the hierarchial statutory remedies provided in theso when there is not even a first determination about the liability of the petitioner by the officer in the lowest category. If the petitioner is allowed to invoke the writ jurisdiction in such a case, will not another competitor seek a writ of mandamus against thewas done in (Inland Revenue Commissioners v. National Federation of Self employed and Small Business Ltd.)10, (1982) A.C.ue is granting a sort of concession to Garwares by allowing them to choose between a higher and a lower rate of taxation  They may argue that this in effect is no election at all as any man of business will choose to pay a lesser tax. As observed by the Supreme Court in Dunlops case (supra), allowing the present writ petition would be short circuiting the procedure established by law, namely, that of statutory appeals. Nor is the petitioner able to show that an extraordinary situation has presented itself in this particular case or what the officers of the Collectorate have done by issuing the show cause notices is in breach of , "a fundamental principle of justice" or "contrary to the general law of the land" as observed in Norths case, (supra).14. A collateral attack was made on the letter datedby which the Under Secretary in the Department of Revenue had, after referring to its communication dated 7th July, 1983, informed the petitionershould contact the concerned Collector of Central Excise in the matter to whom the necessary instructions have been issued". This phrase of instruction has been made a peg on which to hang an argument that the Collectorate have been given some secret supervening instructions to decide the matter in a particular way. This insinuation has been stoutly denied by the Revenue. It is true that the nucleus of an administrative structure like the Central Excise will be a planning and controlling body like the Central Board of Direct Taxes for theDepartment and Central Board of Excise and Customs for the indirect taxes, who, on a periodical review of the situation, would issue instructions to thousands of officers spread all over the length and breadth of India in the matter of execution of their duties in the best possible manner. The petitioner has not been able to show that any secret instructions were given to the concerned officials, but we would leave this question open to be reagitated before the concerned officer.15. It was also urged at the Bar that the classification of the goods was made by the Assistant Collector on 2nd August, 1983 and that if the same person hears the case being theof the two show cause notices, it would be an infraction of the principle of natural justice as it is likely that he may be biased against the petitioner. We were also informed that the said Assistant Collector has since been transferred and that the proceedings would not be heard by him. Hence this argument does not avail Counsel.