M/S M.S.S. Food Processors Through Its Authorized Signatory Shri Shyamsundar Sharma vs. Union Of INDIA

Held

The Court held that the writ petition was maintainable, overriding the respondent's contention regarding the alternative remedy. The Court cited several Supreme Court judgments, including Whirlpool Corporation vs. Registrar of Trade Marks, Mumbai and Others, and Assistant Commissioner of State Tax vs. M/s. Commercial Steel Limited, establishing exceptions to the rule of alternative remedy, such as violation of principles of natural justice and enforcement of fundamental rights. Adverting to the merits, the Court found it undisputed that the petitioner was not supplied with the documents on which the show cause notice was based. Despite repeated requests and a prior remand order from the Commissioner(Appeals) directing fresh adjudication after supplying documents and complying with natural justice, the respondent again passed an order without providing the documents or affording a proper hearing. This was deemed a violation of natural justice. Consequently, the final order dated 29.03.2024 was set aside and the matter was remanded back to the respondent no.2 for fresh adjudication. The respondent was directed to provide all relied-upon documents, consider the petitioner's reply, and then pass an order on merits after giving a proper opportunity of hearing. The petition was allowed with no order as to costs.

Facts

The petitioner, M/s M.S.S. Food Processors, engaged in manufacturing Pan Masala, Mouth Freshner, and Sweet Supari, challenged an order dated 29.03.2024 by the Assistant Commissioner, CGST and Central Excise, Indore. This order imposed recovery of Rs. 7,14,282/- and levied penalty. Previously, a show cause notice was issued on 09.11.2012, relying on 32 documents. However, only 6 were provided to the petitioner. The petitioner awaited the remaining documents, but the respondent passed a final order on 16.11.2022 confirming the demand and penalty. An appeal to the Commissioner(Appeals) resulted in a remand for fresh adjudication, with a direction to comply with natural justice principles and supply relied-upon documents. Despite this, the respondent again passed an order on 29.03.2024 confirming the demand and penalty without providing the documents or affording a proper hearing.

Key Issues

1. Whether the final order of recovery and penalty passed by the respondent no.2 is illegal and arbitrary due to the non-supply of relied-upon documents to the petitioner, thereby violating the principles of natural justice and the petitioner's constitutional rights under Article 19(1)(g) and 21? 2. Whether the writ petition is maintainable despite the availability of an alternative remedy of appeal, given the alleged violation of natural justice and the respondent's disobedience of the Commissioner(Appeals)'s order? Petitioner's arguments: The petitioner contended that the non-supply of relied-upon documents prevented them from tendering a proper reply and defense, leading to a violation of natural justice. They argued that the respondent acted in disobedience of the Commissioner(Appeals)'s order by not providing documents and affording a hearing, thus violating constitutional rights. They relied on various circulars and provisions of the Excise Act. Respondent's arguments: The respondent argued that the petitioner's claim of not being served documents was incorrect, stating the petitioner themselves misplaced them. They asserted that the petitioner should have availed the alternative remedy of appeal as per the order. They also claimed that proper opportunity of hearing was afforded, as evidenced by personal hearings being fixed. They further argued that the petitioner suppressed material facts and thus no violation of constitutional rights occurred. They relied on judgments concerning alternative remedies and maintainability.