Shri Rajkumar Gupta @ Raj Kumar Sultania @ Raju Sultania vs. The Union Of INDIA And Anr

Held

The Court held that the writ petitions were not maintainable. It reasoned that the Central Excise Act, 1944, provides a complete mechanism for deciding all legal and factual disputes, including a clear recourse to an alternative remedy by way of appeal. The Court found that the impugned order was not ex facie perverse or in utter violation of the principles of natural justice, and that mixed questions of fact and law were involved, which are best addressed by the appellate authority. The Court emphasized that financial incapacity cannot be a ground for bypassing the statutory alternative remedy. While acknowledging the Supreme Court's decisions on natural justice, the Court distinguished them by stating that in the present case, the appellate authority could expeditiously decide all issues, including the grievances raised. The ratio decidendi is that High Courts should generally insist on the exhaustion of statutory remedies before entertaining writ petitions, especially when the statute provides a comprehensive dispute resolution mechanism and the issues involve mixed questions of fact and law. The Court directed that if the petitioners avail the statutory remedy within four weeks, the issue of limitation would not be a bar, and the proceedings should be decided expeditiously within six months. The Court also directed that the petitioners' request for waiver of the pre-deposit amount, if admissible under law, should be considered, and the appeal should be considered uninfluenced by the Court's observations.

Facts

The petitioners filed writ petitions before the Patna High Court challenging an Order-In-Original dated October 5, 2018, and its corrigendum dated November 22, 2018, issued by the Commissioner, Central GST and Central Excise, Patna. The petitioners sought an opportunity to cross-examine witnesses whose statements were relied upon by the revenue and to be supplied with all documents and evidence used to pass the impugned order. The primary grounds for challenging the order were financial hardship preventing them from making the prerequisite deposit for an appeal and a violation of the principles of natural justice due to the denial of cross-examination. The revenue raised a preliminary objection regarding the maintainability of the writ petitions due to the availability of an alternative statutory remedy.

Key Issues

1. Whether the writ petitions are maintainable before the High Court under Article 226 of the Constitution of India, given the availability of an alternative statutory remedy of appeal and revision under the Central Excise Act, 1944? (Question of law) 2. Whether the petitioners are entitled to an opportunity to cross-examine the witnesses whose statements were relied upon by the revenue, and whether the denial of such an opportunity constitutes a violation of the principles of natural justice, warranting interference by the High Court? (Question of mixed law and fact) 3. Whether financial hardship can be a ground to bypass the statutory alternative remedy of appeal? Contentions of the Petitioner/Appellant: The petitioners argued that the impugned order violated the principles of natural justice by denying them the right to cross-examine witnesses. They also contended that financial hardship prevented them from availing the statutory appeal remedy, which often requires a pre-deposit. They relied on Supreme Court judgments in Lakshman Exports Ltd. v. Collector of Central Excise, Rajiv Arora vs. Union of India & Ors., Andaman Timber Industries vs. Commissioner of C.Ex., Kolkata-II, and Arya Abhushan Bhandar v. Union of India & Ors. Contentions of the Revenue/State: The revenue argued that the writ petitions were not maintainable due to the availability of an equally efficacious alternative statutory remedy under the Central Excise Act, 1944. They contended that the High Court should not entertain writ petitions when such statutory remedies exist, citing the principle of exhaustion of remedies.