69. Applicability of limitation Act in Excise matters

Whether Limitation Act is applicable to special Acts, when its application is not expressly excluded, is the subject matter of discussion in this article.
By judgment delivered in Commissioner of Customs, Central Excise, Noida v. Punjab Fibres Ltd., Noida (2008 (3) SCC 73) The Supreme Court held that the High Court has no power to condone delay in seeking reference under Section 35-H (before amendment in 2005)of the Excise Act. Doubting correctness of the view reference was made to larger Bench. By judgment dated 27.3.2009 a three-judge Bench in Commissioner of Customs & Central Excise v. M/s. Hongo India (P) Ltd. & Anr. 2009 (4) SCALE 374 concurred with the view taken by the two-judge Bench in Punjab Fibres case.

S. 35 H (as stood before its deletion in 2005) of Excise Act read as under:
"35H. Application to High Court - (1) The Commissioner of Central Excise or the other party may, within one hundred and eighty days of the date upon which he is served with notice of an order under section 35C passed before the 1st day of July, 2003 (not being an order relating, among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment), by application in the prescribed form, accompanied, where the application is made by the other party, by a fee of two hundred rupees, apply to the High Court to direct the Appellate Tribunal to refer to the High Court any question of law arising from such order of the Tribunal."

Except providing a period of 180 days for filing reference application to the High Court, there is no other clause for condoning the delay if reference is made beyond the said prescribed period. As already pointed out that in the case of appeal to the Commissioner, Section 35 provides 60 days time and in addition to the same, Commissioner has power to condone the delay up to 30 days, if sufficient cause is shown. Likewise, Section 35B provides 90 days time for filing appeal to the Appellate Tribunal and sub-section (5) therein enables the Appellate Tribunal to condone the delay irrespective of the number of days, if sufficient cause is shown. Likewise, Section 35EE which provides 90 days time for filing revision by the Central Government and, proviso to the same enables the revisional authority to condone the delay for a further period of 90 days, if sufficient cause is shown, whereas in the case of appeal to the High Court under Section 35G and reference to the High Court under Section 35H of the Act, total period of 180 days has been provided for availing the remedy of appeal and the reference. However, there is no further clause empowering the High Court to condone the delay after the period of 180 days.

Though the Parliament has specifically provided an additional period of 30 days in the case of appeal to the Commissioner, it is silent about the number of days if there is sufficient cause in the case of an appeal to Appellate Tribunal. Also an additional period of 90 days in the case of revision by Central Government has been provided. However, in the case of an appeal to the High Court under Section 35G and reference application to the High Court under Section 35H, the Parliament has provided only 180 days and no further period for filing an appeal and making reference to the High Court is mentioned in the Act. In this regard, the Supreme Court in Punjab Fibres Ltd., Noida (supra), while considering the very same question and following Singh Enterprises vs. Commissioner of Central Excise, Jamshedpur and Others, (2008) 3 SCC 70 concluded that "the High Court was justified in holding that there was no power for condonation of delay in filing reference application."

In Commissioner of Customs & Central Excise v. M/s. Hongo India (P) Ltd. & Anr. 2009 (4) SCALE 374, the Supreme Court held that in the absence of any clause condoning the delay by showing sufficient cause after the prescribed period, there is complete exclusion of Section 5 of the Limitation Act. The High Court was, therefore, justified in holding that there was no power to condone the delay after expiry of the prescribed period of 180 days.

In this case, an argument was raised based on Section 29 of the Limitation Act, which reads as under:
"29. Savings.- (1) Nothing in this Act shall affect section 25 of the Indian Contract Act, 1872 (9 of 1872).

(2) Where any special or local law prescribes for any suit, appeal or application a period of limitation different from the period prescribed by the Schedule, the provisions of section 3 shall apply as if such period were the period prescribed by the Schedule and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law, the provisions contained in sections 4 to 24 (inclusive) shall apply only in so far as, and to the extent to which, they are not expressly excluded by such special or local law."

It was contended that the words "expressly excluded" would mean that there must be an express reference made in the special or local law to the specific provisions of the Limitation Act of which the operation is to be excluded. The Supreme Court said :
“in this regard, we have to see the scheme of the special law here in this case is Central Excise Act. The nature of the remedy provided therein are such that the legislature intended it to be a complete Code by itself which alone should govern the several matters provided by it. If, on an examination of the relevant provisions, it is clear that the provisions of the Limitation Act are necessarily excluded, then the benefits conferred therein cannot be called in aid to supplement the provisions of the Act. In our considered view, that even in a case where the special law does not exclude the provisions of Sections 4 to 24 of the Limitation Act by an express reference, it would nonetheless be open to the court to examine whether and to what extent, the nature of those provisions or the nature of the subject-matter and scheme of the special law exclude their operation. In other words, the applicability of the provisions of the Limitation Act, therefore, to be judged not from the terms of the Limitation Act but by the provisions of the Central Excise Act relating to filing of reference application to the High Court. The scheme of the Central Excise Act, 1944 support the conclusion that the time limit prescribed under Section 35H(1) to make a reference to High Court is absolute and unextendable by court under Section 5 of the Limitation Act.”

68. Different standard of evidence at different stages of trial

For summoning an additional accused an order under Section 319 of the Criminal Procedure Code should not be passed only because the first informant or one of the witnesses seeks to implicate other person(s). Sufficient and cogent reasons are required to be assigned by the court so as to satisfy the ingredients of the provisions. Mere ipse dixit would not serve the purpose. Such an evidence must be convincing one at least for the purpose of exercise of the extraordinary jurisdiction.The courts are required to apply stringent tests; one of the tests being whether evidence on record is such which would reasonably lead to conviction of the person sought to be summoned.
Mere existence of a prima facie case may not serve the purpose. Different standards are required to be applied at different stages. Whereas the test of prima facie case may be sufficient for taking cognizance of an offence at the stage of framing of charge, the court must be satisfied that there exists a strong suspicion. While framing charge in terms of Section 227 of the Code, the court must consider the entire materials on record to form an opinion that the evidence if unrebutted would lead to a judgment of conviction. But a higher standard is required for the purpose of invoking the jurisdiction under Section 319 of the Code.

67. Art. 161 c.f. Art. 72 in cases of death sentence

Some authorities on Indian Constitutional Law are of the view that in a case of death sentence, the Governor has no power of pardon but he can remit, suspend or commute the death sentence . Some other would say that the Governor has no power at all regarding death sentence. The position is confusing. Art. 161does not specify the offences or sentences to which it is applicable. i.e. death sentence is not excluded from the jurisdiction of Governor. Art. 72 (1) (c) empowers the President to grant pardon etc. in all cases where the sentence is a sentence of death. In my opinion, here the words “all cases” is to be marked. It covers matters under Art. 72 (1)(a) (b) as well as well as Art. 161. It means where death sentence has been awarded for an offence relating to a matter to which executive power of the State extends, the President as well as the Governor both are competent to exercise their powers under Arts. 72 and 161 respectively.

Recently in a PIL, Bani Kanta Das and Anr. v. State of Assam and Ors (WRIT PETITION (CIVIL) NO. 457 OF 2005) decided on 8/5/09 , the supreme court has set aside the commutation order of the Governor on the ground that the order was non speaking. The supreme court has remanded the application to the Governor for reconsideration.

By the said order the Governor of Assam had directed to commute the sentence of death awarded to the accused to that of life imprisonment. The death sentence awarded to the
convict by the trial Court was confirmed by the Guwahati High Court and was upheld by Supreme Court.

In this case, basically two grounds were taken before the Supreme Court 1- that no reason has been indicated to direct such commutation and 2- apparently the order of commutation had its foundation on recommendations made by the National Human Rights Commission .

66. Transparency and accountability in a statute

The Parliament enacted Electricity Act, 2003. In exercise of its jurisdiction conferred by Section 178 of the said Act, the Central Electricity Regulatory Commission (for short, "CERC") made Central Electricity Regulatory Commission (Procedure,Terms and Conditions for Grant of Trading License and other related matters), Regulation 2004 . After analyzing the Act and Regulations in detail, the Supreme Court in Global Energy Ltd. v. Central Electricity Regulatory Commission (civil appeal no 3457- 3458 of 2009) decided on 11th may 2005, declared Clauses (b) and (f) of Regulation 6A ultra vires the Constitution of India as also the Act. The Supreme Court tested the propriety and constitutionality of generic decision-making process encapsulated under the impugned legislation.

The Supreme Court observed that: “The law sometimes can be written in such subjective manner that it affects efficiency and transparent function of the government. If the statute provides for point-less discretion to agency, it is in essence demolishing the accountability strand within the administrative process as the agency is not under obligation from an objective norm, which can enforce accountability in decision-making process. All law making, be it in the context of delegated legislation or primary legislation, have to conform to the fundamental tenets of transparency and openness on one hand and responsiveness and accountability on the other. These are fundamental tenets flowing from Due Process requirement under Article 21, Equal Protection clause embodied in Article 14 and Fundamental Freedoms clause ingrained under Article 19. A modern deliberative democracy can not function without these attributes.

The constitutive understanding of aforementioned guarantees under the Fundamental Rights chapter in the Constitution does not give rise to a mere rhetoric and symbolic value inhered by the polity but has to be reflected in minute functioning of all the three wings of state - executive, legislature and judiciary. When we talk of state action, devil lies in the detail. The approach to writing of laws, rules, notifications etc. has to showcase these concerns.

The image of law which flows from this framework is its neutrality and objectivity: the ability of law to put sphere of general decision-making outside the discretionary power of those wielding governmental power. Law has to provide a basic level of "legal security" by assuring that law is knowable, dependable and shielded from excessive manipulation. In the context of rule making, delegated legislation should establish the structural conditions within which those processes can function effectively. The question which needs to be asked is whether delegated legislation promotes rational and accountable policy implementation.

A subjectively worded normative device also enables the agency to acquire rents. It determines the degree of accountability and responsiveness of officials and of political and judicial control of the bureaucracy. However, when the provision inherently perpetuates injustice in the award of licenses and brings uncertainty and arbitrariness it would be best to stop the government in the tracks. Since the vires of the regulation is under challenge, we took the opportunity to consider the propriety and constitutionality of generic decision-making process encapsulated under the impugned legislation. Amongst others, in this context, we strike down the impugned clause.”

65 Argument beyond pleadings

The Courts should ordinarily insist on the parties being confined to their specific written pleadings and should not be permitted to deviate from them by way of modification or supplementation except through the well-known process of formally applying for amendment। It is not that justice should be available to only those who approach the Court confined in a strait-jacket. But there is a procedure known to the law, and long established by codified practice and good reason, for seeking amendment of the pleadings. Besides this, oral submissions raising new points for the first time tend to do grave injury to a contesting party by depriving it of the opportunity, to which the principles of natural justice hold it entitled, of adequately preparing its response.
(AIR 1981 SC588)

64 State Judicial Service - who is empowered to frame rules?

On a plain reading of Arts. 235 and 309 of the Constitution, it is clear that the power to frame rules regarding seniority of officers in the judicial service of the State is vested in the Governor and not in the High Court. Article 235 itself defines the outer limits of the High Court's power of control over the district Courts and Courts subordinate thereto. In the first place, in the exercise of its control over the district Courts and subordinate courts, it is not open to the High Court to deny to a member of the subordinate judical service of the State the right of appeal given to him by the law which regulates the conditions of his service. Secondly, the High Court cannot, in the exercise of its power of control, deal with such person otherwise than in accordance with the conditions of his service which are prescribed by such law. There is no power in the High Court to pass a law though rules made by the High Court in the exercise of power conferred upon it in that behalf may have the force of law. There is a distinction between the power to pass a law and the power to make rules, which by law, have the force of law. Besides, "law" which the second part of Art. 235 speaks of, is law made by the legislature because, if it were not so, there was no purpose in saying that the High Court's power of control will not be construed as taking away certain rights of certain persons under a law regulating their conditions of service. It could not have been possibly intended to be provided that the High Court's power of control will be subject to the conditions of service prescribed by it. The clear meaning, therefore, of the second part of Article 235 is that the power of control vested in the High Court by the first part will not deprive a judicial officer of the rights conferred upon him by a law made by the legislature regulating his conditions of service.

It is the High Court, not the executive which possesses control over the State judiciary. But, what is important to bear in mind is that the Constitution which has taken the greatest care to preserve the independence of the judiciary did not regard the power of the State legislature to pass laws regulating the recruitment and conditions of service of judicial officers as an infringement of that independence. The mere power to pass such a law is not violative of the control vested in the High Court over the State judiciary. The power exercised by the Governor under the proviso is a power which the legislature is competent to exercise but has in fact not yet exercised. It partakes of the characteristics of the legislative, not executive, power. It is legislative power. That the Governor possesses legislative power under our Constitution is incontrovertible and , therefore, there is nothing unique about the Governor's power under the proviso to Article 309 being in the nature of a legislative power.

It is true that the power conferred by Article 309 is "subject to" the provisions of the Constitution. But it is fallacious for that reason to contend that the Governor cannot frame rules regulating the recruitment and conditions of service of the judicial officers of the State. The power to make law relating to seniority is vested by Article 309 in the legislature, and until it acts, in the Governor. Whether it is the legislature which passes an Act or the Governor who makes rules regulating seniority, the end product is "law" within the meaning of the second part of Art. 235.

Though the legislature or the Governor has the power to regulate seniority of judicial officers by laying
down rules of general application, that power cannot be exercised in a manner which will lead to interference with the control vested in the High Court by the first part of Article 235. In a word, the application of law governing seniority must be left to the High Court. The determination of seniority of each individual judicial officer is a matter which indubitably falls within the area of control of the High Court over the district Courts and the Courts subordinate thereto. For the same reason, though rules of recruitment can provide for a period of probation, the question whether a particular judicial officer has satisfactorily completed his probation or not is a matter which is exclusively in the domain of the High Court to decide.

63 Welfare statutes

Semantic luxuries are misplaced in the interpretation of 'bread and butter' statutes. Welfare statutes must, of necessity, receive a broad interpretation. Where legislation is designed to give relief against certain kinds of mischief, the Court is not to make inroads by making etymological excursions. 'Void ab initio' invalid and inoperative' or call it what you will, the workmen and the employer are primarily concerned with the consequence of striking down the order of termination of the services of, the workmen. Plain common sense dictates that the removal of an order terminating the services of workmen must ordinarily lead to the reinstatement of the services of the workmen. It is as if the order has never been and so it must ordinarily lead to back wages too. But there may be exceptional circumstances which make it impossible or wholly inequitable vis-a-vis the employer and workmen to direct reinstatement with full back wages. For instance, the industry might have closed down or might be in severe financial doldrums; the workmen concerned might have secured better or other employment elsewhere and so on. In such situations, there is a vestige of discretion left in the Court to make appropriate consequential orders. The Court may deny the relief of reinstatement where reinstatement is impossible because the industry has closed own. The Court may deny the relief of award of full back wages where that would place an impossible burden
on the employer. In such and other exceptional cases the Court may mould the relief but, ordinarily the relief to be awarded must be reinstatement with full back wages. That relief must be awarded where no special impediment in the way of awarding the relief is clearly shown. True, occasional hardship may be caused to an employer but we must remember that, more often than not, comparatively far greater hardship is certain to be caused to the workmen if the relief is denied than to the employer if the relief is granted.