Sai Auto Industries Through Its Proprietor vs. The Union Of INDIA

Held

The Court dismissed the writ petition. The Court noted that the issue of including specific khasra numbers in the exemption notification had already been decided by a Coordinate Bench. In a previous judgment, the Court had taken the view that directing the inclusion of specified khasra numbers would amount to encroaching on policy matters. The Court found that the petitioner's prayer for inclusion of their khasra number was essentially a policy matter, and interference by the Court under Article 226 of the Constitution of India was not warranted. The principle of res judicata was also invoked, as the matter had been implicitly refused in prior proceedings. Therefore, the Court was not inclined to admit the writ petition, and it was dismissed accordingly. The stay application was also disposed of.

Facts

The petitioner, Sai Auto Industries, sought a writ of mandamus to read down the constitutional validity of Area Based exemption under Notification No. 50/2003 CE dated 10.06.2003, to include their industrial unit located at khasra no. 294, Village Bhamrola, Tehsil Kichha, District Udham Singh Nagar. They argued that the benefit of Central Excise exemption for ten years from May 2005 to April 2015 flows from an Office Memorandum dated 07.01.2003, and the exclusion of their khasra number in the subsequent notification was a procedural lapse. The petitioner also sought to quash an order-in-original dated 08.02.2022 passed by the Additional Commissioner, CGST, Dehradun, which denied the exemption. During arguments, the petitioner narrowed their prayer to seeking inclusion of their khasra number.

Key Issues

1. Whether the petitioner is entitled to the benefit of Central Excise exemption for their industrial unit at khasra no. 294, Village Bhamrola, Tehsil Kichha, District Udham Singh Nagar, based on the Office Memorandum dated 07.01.2003, despite its non-inclusion in Notification No. 50/2003 CE dated 10.06.2003? (Question of law/mixed law and fact, concerning the interpretation and application of the Office Memorandum and the Notification). Petitioner's arguments: The petitioner contended that the Office Memorandum dated 07.01.2003, which promised fiscal incentives, is a substantive provision and the Central Industrial Policy motivating their unit establishment. They argued that the non-inclusion of their specific khasra number in Notification No. 50/2003 CE was a procedural error and should not bar them from receiving the exemption. They relied on the Office Memorandum as the basis for their claim. Respondents' arguments: The respondents, represented by the Excise Department and the Union of India, argued that the issue had already been decided by a Coordinate Bench of the High Court in Writ Petition (M/B) No. 01 of 2015 and connected matters. They referred to a previous judgment which held that even if there was a mistake in not including certain khasra numbers, directing their inclusion would amount to encroaching on policy matters. The Court was not inclined to grant such relief, and the previous writ petition was disposed of on similar lines, implying the prayer for inclusion was turned down and barred by res judicata.