The State of Rajasthan and Others vs M/s. Agrobiotech Industries Ltd. and Another

Admit. Heard finally with the consent of learned counsel for the parties.

The intra-court appeal has been preferred as against the interlocutory order dated 24.07.2012 passed by Single Bench in CWP-10696/2012.

The respondents have filed writ applications before the Single Bench with the prayer to issue writ of mandamus directing the excise authorities to withdraw, cancel and rescind the order dated 31.10.2011 and the letter dated 08.12.2011 being Annexures ''B'' & ''A'' respectively to the writ petition. Prayer has also been made to direct the authorities to grant permission to the petitioners for sale of products to its buyers.

The case has chequered history. Earlier five writ petitions were filed before this Court questioning recovery of Rs. 17,70,72,000/-. In CWP-5112/2011, which was relating to recovery of Rs. 6,85,44,000/-, prayer has been made for refund of the amount of Rs. 3,14,24,000/-. Demand notice dated 23.12.2010 was issued by the District Excise Officer, Sikar for recovery of Rs. 6,85,44,000/-. This Court did not entertain the writ petition and relegated the petitioner-Agrobiotech Industries Limited to avail the remedy of appeal u/s 9A of the Rajasthan Excise Act, 1950 against the demand notice dated 23.12.2010 within a period of two weeks. It was ordered that no coercive step shall be taken for recovery of the amount from the petitioner for a period of two weeks. The matter with respect to interim relief was to be considered by the Excise Commissioner. Thereafter, the petitioners have preferred Appeal No. 3/2011 before the Excise Commissioner, same has been dismissed vide order dated 11.06.2012. Aggrieved thereby, the petitioners have preferred revision petition before the Rajasthan Tax Board and had prayed for interim stay also. It is stated by the learned counsel appearing on behalf of the respondents that the revision petition as well as stay applications are pending before the Rajasthan Tax Board and no order has been passed on interim stay application.

Other four Writ Petitions (7499/2011, 8377/2011, 8375/2011, 8372/2011) filed by the petitioners were decided by another Single Bench of this Court. The Single Bench of this Court has passed order relegating the petitioner to avail remedy of appeal. However, the interim relief was granted in terms of the order dated 20.07.2011 passed in the aforesaid CWP-7499/2011 in which 50% amount was ordered to be deposited in monthly installments as fixed by the Court on 20.07.2011. It is not disputed on facts that the order dated 20.07.2011 has not been complied with by the petitioner. Three appeals are stated to be pending before the Excise Commissioner, while Appeal No. 4/2011 has been decided. In regard to appeal No. 4/2011, it is submitted that the amount of Rs. 1,14,00,000/- had been deposited by the petitioner even before filing of the appeal; the respondents in appeal before us have claimed that they have deposited the said amount whereas stand of the Revenue is that the amount so deposited was pertaining to some other demand. Review petition has been filed by the respondents before the Excise Commissioner itself as stated by Mr. Utpal Majumdar, learned counsel appearing on their behalf.

It is also not disputed that the petitioner has questioned same recovery in the pending appeals before the Excise Commissioner, in review before Excise Commissioner and revision pending before the Rajasthan Tax Board same recovery had been questioned in the writ petition before the Single Bench.

The petition under Article 32 of the Constitution of India was preferred by respondents/petitioners directly before the Apex Court, the same was registered as Writ Petition (Civil) No. 491/2011 and thereafter dismissed as not pressed vide order dated 13.07.2012. The Apex Court has mentioned in the order that after addressing the Court for some time, learned counsel appearing on behalf of petitioners has prayed for withdrawal of the petition stating that the petitioner would like to avail of some other appropriate remedy as may be available to them in accordance with law. Accordingly, the writ petition was dismissed as not pressed and the ad-interim orders dated 02.12.2011 and 15.12.2011 were vacated. Thereafter, writ petition was filed before the Single Bench on 18.07.2012.

In CWP-10696/2012 filed before the Single Bench, petitioner has prayed for quashment of aforesaid orders dated 31.10.2011 and 08.12.2011. The Single Bench vide order dated 24.07.2012 has stayed operation of the order dated 18.07.2012. An order of attachment was passed by the Excise Inspector, Circle Neem-Ka Thana on 18.07.2012, pursuant thereto factory of the petitioner was seized on 21.07.2012. Aggrieved thereby the intra-court appeal has been preferred.

It is submitted by Mr. G.S. Bapna, Senior Counsel and Advocate General appearing with Mr. R.B. Mathur on behalf of appellants that in view of the orders passed in five writ petitions in the previous round of litigation, it was not open to the Single Bench to entertain the writ petitions and to pass interim orders. The warrant dated 18.07.2012 has not been challenged by the petitioner in the writ petition. The petitioner has not deposited the amount as ordered by this Court in previous round of litigation in four writ petitions (7499/2011, 8377/2011, 8375/2011, 8372/2011) and there was no interim stay granted in one of writ petition CWP-5112/2011 decided on 15.09.2011, in that matter appeal filed had been dismissed and revision filed before Rajasthan Tax Board, interim stay application is pending consideration as stated by the learned counsel appearing on behalf of respondents. Hence, the interim stay could not have been granted in the case. In other matter, order of deposit of amount during pendency of appeal has not been complied with by the respondents. Department was justified in proceeding for recovering the amount as there was no stay operating at the time when the attachment was effected. Pursuant to the demand notice dated 15.10.2011, attachment was made on 21.10.2011. The earlier attachment was sought to be effected earlier in view of the fact that the cheques which have been issued, have been dishonoured as payment was stopped by drawer; in view of the order passed by Apex Court, but ultimately petition has been withdrawn. Thereafter, it was again effected on 18.07.2012/21.07.2012. The order passed by this Court directing deposit of 50% amount has not been complied with. In view of the previous orders which have been passed and non-compliance of orders, it amounts to gross abuse of the process of law to invoke writ jurisdiction again.

Mr. Utpal Majumdar, learned counsel appearing on behalf of respondents has controverted the aforesaid submission. He has submitted that an application has been filed in writ petition questioning the warrant of attachment issued on 18.07.2012 and the seizure made on 21.07.2012 before the Single Bench. He has further submitted that out of total demand of Rs. 17,70,72,000/-, a sum of Rs. 9,60,00,000/- has already been deposited. Thus, the total amount deposited is more than 50%. Consequently, there was no justification to effect attachment. However, learned counsel has not disputed that the order which was passed in the four of writ petitions for depositing the 50% amount in monthly installments, has not been complied with by the respondents. The stand of learned counsel for the respondents is that substantial amount stands deposited. Thus, the demand could not be pursued by issuance of the warrant effecting the attachment of factory premises.

Mr. Utpal Majumdar, learned counsel appearing on behalf of respondents has further submitted that the interim stay is effective till next date; the impugned order being interlocutory one, ordinarily the intra-court appeal should not be entertained, against such orders. Before the Apex Court, the petition was not pressed with liberty to avail other remedy available to the petitioner, as such, the petition filed before the Single Bench is clearly maintainable and interim order has rightly been passed by the Single Bench. There is no jurisdictional error in the order warranting interference in the intra-court appeal.

After hearing learned counsel for the parties, we are of the opinion that ordinarily the intra-court appeal should not be entertained against such interim orders, even otherwise, it is practice of this Court also not to interfere in such orders. However in the interest of justice, this Court had been interfering in appropriate cases. In our considered opinion, there is no absolute bar to exercise the jurisdiction in intra-court appeal even against such interim orders passed by the Single Bench during pendency of the writ applications; it would depend upon nature of the order and the relief granted. Where order is such which would perpetuate illegality, only then, in appropriate cases, this Court interferes in such matters and not otherwise. However, we have to consider the facts of this case so as to determine whether interference is called for or not.

Having considered facts and circumstances of the instant case, we are of the opinion that it was not at all a proper case in which prayer for interim relief should have been entertained by the Single Bench. It is not in dispute that earlier five writ petitions were filed in this Court with respect to the same demand. In one of the Writ Petition bearing No. 5112/2011 decided on 15.09.2011, this Court did not grant any interim stay, however, insulation was granted for a period of fifteen days in order to prefer appeal, same was filed. The Excise Commissioner has dismissed the appeal so preferred pursuant to order passed by this Court. Admittedly, revision petition is pending before the Rajasthan Tax Board in which interim stay petition has also been filed which is stated to be pending consideration. In our considered opinion, it was not open to the respondents to approach this Court in view of pendency of the revision petition in which stay has also been sought and the earlier decision rendered by this Court granting liberty to file appeals and to seek interim stay.

It is also not disputed that in other four writ petitions (7499/2011, 8377/2011, 8375/2011, 8372/2011), this Court has granted interim stay in terms of the order dated 20.07.2011 which was passed in one of the writ petition (CWP-7499/2011) by which out of the total outstanding demand, 50% amount was ordered to be deposited in monthly installments. Admittedly, three appeals are pending and 50% amount was ordered to be deposited which has not been complied. It is also not in dispute that some of the cheques issued by the petitioner were dishonoured as the payment was stopped. It is also not in dispute that the order passed by Single Bench in four writ petitions directing deposit of 50% amount in monthly installments has not been complied with. Considering the aforesaid admitted position and also the fact that this Court has already decided the question of interim recovery during pendency of the appeal by passing the detailed order in the previous round of litigation vide order dated 02.11.2011 passed by Single Bench. Four writ petitions were decided vide similar order dated 02.11.2011 wherein following order was passed by this Court:

Having considered the aforesaid submissions, I am of the view that submission of counsel for the respondent No. 2 and 3 Mr. RB Mathur is justified as in the present case, the interim order was passed in the modified terms on 20.07.2011 and the same be continued during the period of appeal.

Therefore, I deem it proper that in case, the petitioner files an appeal before the Excise Commissioner within a period of three weeks from the date of receipt of certified copy of this order, then the Excise Commissioner shall decide the same within three months thereafter.

Till the disposal of the appeal, the modified interim order-dated 20.07.2011 passed by this Court shall continue.

The writ petition stands disposed of as indicated above.

The application No. 48538 dated 1.10.2011 filed by the counsel for the petitioner for modification of the interim order-dated 20.07.2011 is dismissed.

The order dated 20.07.2011 passed in CWP-8372/2011 which has been referred in the order dated 02.11.2011 is quoted below in extenso:

20.7.2011

Heard learned counsel fro the parties.

This Court in identical case - HSB Agro Industries (P) Ltd. V. The State of Rajasthan and another (S.B. Civil Writ Petition No. 3774/2011) on 18.5.2011, after hearing the parties at length, passed detailed interim order restraining the respondents therein from encashing the remaining three post dated cheques in question, keeping in view the payment of penalty of Rs. 70 lacs out of Rs. 1,14,24,000/- by encashing four post dated cheques. Subsequently, in identical case of the petitioner company - CWP No. 7499/2011, except on the issue of estoppel, interim order was passed on 31.5.2011 allowing the petitioner company to deposit Rs. 3,42,56,000/- as against the demand of Rs. 7,42,56,000/- and the aforesaid interim order dated 31.5.2011 has been modified today by allowing the petitioner company to make payment in monthly installments.

In para No. 10 of this writ petition, it has been stated by the petitioner company that when the similar demand was raised against it, the petitioner company approached this Court by filing CWP No. 7499/2011 inter alia praying for setting aside the demand dated 20.4.2011 and this Court after hearing both the parties, passed interim order on 31.5.2011.

Mr. G.S. Bafna, Advocate General and Mr. R.B. Mathur, appearing for the respondents have not denied the fact that the present case is identical to the aforesaid writ petitions and therefore, the Court may pass appropriate order.

Considering the aforesaid fact that the present case is identical to CWP-7499/2011, I deem it proper to pass the following identical interim order in this writ petition in the same modified terms as has been passed in CWP-7449/2011 on 20.7.2011.

The demand raised by the respondents vide order dated 02.06.2011 (Annexure/2) of Rs. 57,12,000/- (Rs. fifty seven lacs twelve thousand only) shall remain stayed in case the petitioner makes the payment of Rs. 28,56,000/- (Rs. Twenty eight lacs fifty six thousand only) in easy monthly instalments of Rs. 4,08,000/-.

If the petitioner succeeds in the writ petition, then the issue of payment of the interest amount will be decided finally at the time of final disposal of the writ petition.

If the decision of the writ petition is otherwise, then the respondents will also be entitled for charging interest on the principal amount.

In case of default, the aforesaid interim order shall be vacated automatically without reference to the Court.

The stay petition is disposed of, as indicated above.

Put up for final disposal at admission stage in the last week of September, 2011 along with connected cases.

In view of the final order dated 2.11.2011 as well as interim order, which was made part of the final order, we are of the considered opinion that no further interference was called for in the writ jurisdiction of this Court particularly when the matter is pending before the authorities in the appeal, review or revision. Three appeals are pending before the Excise Commissioner. The fact that one revision petition is pending before the Rajasthan Tax Board is also not in dispute. In case any further interference is made, it would amount to modify the order which was passed in earlier round of litigation. It is pertinent to mention that the orders passed in Appeals No. 3/2011 & 4/2011 have not been questioned in the writ petition before Single Bench. It was not at all open to the petitioner to pray for interim stay as that would be in derogation of order passed by this Court in the previous round of litigation on 2.11.2011. Thus, the Single Bench was not at all justified in facts of the instant case to pass interim order staying operation of the order dated 18.07.2011. Seizure has already been carried out on 21.07.2012 as mentioned in the order itself. Petitioner was aware of passing of earlier orders by this Court in five writ petitions. Thus, he had directly approached the Apex Court by way of filing Writ Petition (Civil) No. 491/2011 under Article 32 of the Constitution of India. However, the same was dismissed as not pressed with liberty to avail alternative remedy. After dismissal of aforesaid writ petition as withdrawn before the Apex Court, the same demand was challenged before the Single Bench of this Court again praying for the interim relief staying the recovery proceedings which was earlier adjudicated by this Court and the order of deposit passed by this Court in aforesaid four petitions was not complied with and in one of the matter, the appeal has been dismissed; the revision petition filed against the same, is pending and the stay application is also admittedly pending before the Single Bench. The observation made that while issuing order dated 18.7.2012 and effecting it on 21.7.2012 hearing was not granted was not germane in view of previous order passed by this Court and its non-compliance. The appellant prima facie had the right to proceed with the recovery of amount. Thus, it was not open to the petitioner to invoke writ jurisdiction again. In view of the aforesaid, we have no hesitation in the setting aside the order dated 24.07.2012 passed by the Single Bench.

Mr. Utpal Majumbar, learned counsel appearing on behalf of respondents is trying to catch the last straw like a drowning fish at the end has prayed for staying the recovery proceedings for a period of four weeks. We are not ready to rescue in view of the previous orders which were passed by this Court in writ jurisdiction as they were not complied with and pendency of revision stay applications and three appeals. Resultantly, the intra-court appeal is allowed. Impugned order dated 24.07.2012 is set aside. Civil Misc. Stay Application No. 9914/2012 is disposed of.