Leave granted.
2. Appellants claim that they are engaged in the business activity of
bleaching, dyeing and processing of grey fabrics. They claim that such
grey fabrics are supplied to them by power loom industries for job-work.
They were called upon to furnish Return in Form A and Form B of Textiles
Committee (Cess) Rules, 1975 on the basis that they undertook work of
manufacturing, that what they (appellants) called as job-work was in fact a
process of manufacturing and, consequently, they (appellants) were liable
to pay cess under the provisions of the Textiles Committee (Cess) Act,
1963.
3. Therefore, amongst several questions, which arises for
determination, the main question is: whether the process undertaken by
the appellants constituted manufacture or processing, whether the
appellants were job-workers or manufacturers and whether, consequently,
the appellants were liable to pay cess under the Textiles Committee (Cess)
Act read with Textiles Committee (Cess) Rules? It may also be mentioned
that the method of quantification and liability also arises for
determination. Consequently, the meaning of the words “value of textiles”
used in the Act/Rules is also required to be decided.
4. Before coming to the impugned judgment, we may state that the
above questions arose before the Bombay High Court in a batch of writ
petitions, whose particulars are given in Chart-I hereinbelow, which writ
petitions came to be disposed of by the Division Bench vide its Order
dated 18.4.2007 (impugned order). These writ petitions covered the
period between December, 1998 to December, 2000. It appears that there
were twelve writ petitions before the High Court. They were filed by twelve
independent processing companies/firms. We annex Chart- I accordingly
hereinbelow:
Chart – I Demand for the period December, 1998 to December, 2000 which is the subject matter of the writ petitions whose numbers are given in the chart below: S. Name of the Petitioner WP No. Amount No. Demanded
1. Yashwant Co-op. Processors Ltd. 2959/07 3,15,837.00 2. Radha Kanhaiya Textile Processors 2909/07 1,45,620.50
Ltd. 3. Mahesh Textile Processors 2910/07 2,13,833.00 4. Unirose Textile Processors Pvt. Ltd. 2927/07 2,69,180.00 5. Radha Mohan Processors 2930/07 2,04,934.50 6. Shantinath Synthetics Pvt. Ltd. 2928/07 1,96,568.00
7. Balaji Dyeing & Bleaching Mills 2929/07 1,92,061.50
8. Manpasand Textile Processors Pvt. 2951/07 2,04,441.00
Ltd.
9. Jubilee Fabrics Pvt. Ltd. 2960/07 1,40,455.00
10. Swastik Dyeing & Bleaching 2922/07 3,30,364.50
11. Amit Weaving 2926/07 3,06,678.00
12. Arihant Yarn Processors 2953/07 2,01,356.00
5. However, for the period 2001-02 to 2002-03, the appellants who
were given show cause notice(s) did not file their monthly Returns under
Rule 4 of the Textiles Committee (Cess) Rules, 1975. Consequently, ex
parte assessment order came to be passed. Since appellants failed to pay
cess, each of them was served with notice of demand under Rule 7 of the
Textiles Committee (Cess) Rules, 1975 on the basis of ex parte assessment
orders (best judgment assessment). The particulars of such cases are
given hereinbelow in Chart-II:
Chart – II
Demand for the periods 2001-02 to 2002-03 which is covered by Notice(s) of demand
served upon the Assessees who failed to submit monthly Returns:
S. Name of the Assessee Notice of Period Amount No. Demand Outstanding
dated 1. Shantinath 30.10.03 01-02 139097.50
Synthetics Pvt. 02-03 79442.50 2,18,540.00
Ltd. 2. Mahesh Textiles 30.10.03 01-02 196768.50
Processors 02-03 123624.00 3,20,393.00
3. Unirose Textile 30.10.03 01-02 172394.00
Processors Pvt. 02-03 23645.50 1,96,040.00
Ltd.
4. Radhamohan 30.10.03 01-02 77137.50
Processors 02-03 29060.00 1,06,198.00
5. Shri Balaji Dyeing 30.10.03 01-02 39767.00
& Bleaching Mills 02-03 48145.00 87,912.00
6. Manpasand 08.12.05 01-02 to
Textile Processors 02-03 1,14,878.50
Pvt. Ltd. 7. Jubilee Fabrics 28.01.04 01-02 142201.00
Pvt. Ltd. 02-03 48011.00 1,90,212.00
8. Radhakanhaiya 30.10.03 01-02 18071.00
Textiles 02-03 21591.50 39,663.00
Processors Ltd.
6. By the impugned Order dated 18.4.2007, the High Court
dismissed the above writ petitions on the ground of delay, hence, this civil
appeal.
7. We may state at the outset that although we do not find error in
the judgment of the High Court in dismissing the writ petitions on the
ground of delay, since the appellants on instructions have agreed to
discharge their outstanding liabilities without prejudice to their rights and
contentions in the writ petitions and since interpretation of the Textiles
Committee Act/ Rules is involved, we are inclined to restore the above writ
petitions on the file of the Bombay High Court subject to the appellants
satisfying the following conditions so that the Department earns its
revenue:
(i) In Chart-I we have furnished the names of the appellants who are
the petitioners and the amount outstanding against their names.
Each of the appellants shall deposit with the Department the
outstanding amount shown against its name within eight weeks
from today.
(ii) Each of the appellants whose name appears in Chart-II (who
incidentally are also writ petitioners in the Bombay High Court) shall,
without prejudice to its rights and contentions in the writ petition,
file its monthly Returns before the AO within twelve weeks from
today. At the same time, along with the Returns, each of the
appellants whose name appears in Chart-II shall deposit the
outstanding amount with the Department for the period 2001-02
and 2002-03. On such deposit, which will be under protest, the AO
will set aside the ex parte Assessment Order passed earlier and the
AO shall hear and pass an Assessment Order on such Returns on
merits within three months from the date of filing of the said
Returns. If the appellants fail to deposit the outstanding amount as
indicated in Chart-II, then the ex parte order passed earlier by the
AO and the notice of demand issued earlier will stand and the
Department would be at liberty to initiate recovery proceedings
against such appellant (assessee).
8. On the appellants’ satisfying the above conditions, the writ
petitions dismissed by the Bombay High Court on the ground of delay shall
stand restored to the file of the High Court. Needless to mention that, if
any of the above conditions remain unsatisfied then the writ petition filed
by the processor shall not be restored to the file of the Bombay High Court
and in such eventuality, the impugned order of the High Court dated
18.4.2007 shall stand. In other words, till the above conditions are
satisfied, the High Court shall not proceed to entertain the writ petitions
mentioned in Chart-I, which concerns the period December, 1998 to
December, 2000.
9. Before concluding, we may state that we have not gone into the
merits of the matter and we keep all contentions on both sides on merits
expressly open.
10. Accordingly, the civil appeal stands disposed of with no order as
to costs.
(B. SUDERSHAN REDDY) New Delhi, November 12, 2008.
Petition(s) for Special Leave to Appeal (Civil) No(s).10272/2007
(From the judgement and order dated 18/04/2007 in WP Nos.2959, 2909, 2910, 2922, 2926, 2927, 2928, 2929, 2930, 2951, 2953 & 2960 of 2007 of the HIGH COURT OF BOMBAY)
YASHWANT CO-OP.PROCESSORS LTD.ETC. Petitioner(s)
VERSUS
UNION OF INDIA & ORS. Respondent(s)
(With prayer for interim relief )(FOR FINAL DISPOSAL) (FOR ORDERS)
Date: 12/11/2008 This Petition was called on for hearing today.
CORAM :
For Petitioner(s) Mr. Vijay Hansaria, Sr.Adv.
Mr. B.K. Barve, Adv.
Mr. Sanjay Sarin, Adv.
Ms. Samina Sheikh, Adv.
Mr. Abhinav Ramkrishna, Adv.
Mr. Ashok Mathur,Adv.
For Respondent(s) No.2: Mr. B.A. Desai, Sr.Adv.
Mr. N.V. Solanki, Adv.
Mr. Dattatray Vyas, Adv.
Mr. Chirag M.Shroff, Adv.
For UOI: Ms. S. Wasim A. Qadri, Adv.
Mrs. Anil Katiyar, Adv.
Mr. Jufer A.Khan, Adv.
UPON hearing counsel the Court made the following
Leave granted.
Civil Appeal is disposed of in terms of the signed order, with no
order as to costs.
(Signed order is placed on the file)