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Raza Buland Sugar Co. Ltd. v. Municipal Board, Rampur AIR 1965 SC 895

RAZA BULAND SUGAR CO. LTD. V. MUNICIPAL BAORD, RAMPUR

Raza Buland Sugar Co. Ltd. v. Municipal Board, Rampur AIR 1965 SC 895

ISSUE:

  • Whether the publication of tax proposals and draft rules under Section 131(3) of the U.P. Municipalities Act mandatory or directory and was the process validly followed in this case?
  • Whether Section 135(3) conclusively validates the imposition of a tax despite procedural defects under Sections 131 and 94(3)?

RULE:

  • Mandatory vs. Directory Compliance: Provisions requiring public objections for taxation (Section 131(3), first part) are mandatory as they ensure taxpayer participation, while the manner of publication (Section 94(3)) is directory, requiring substantial rather than strict compliance.
  • Conclusive Proof Doctrine: Section 135(3) establishes that a notification in the Government Gazette serves as conclusive proof that the tax has been imposed in accordance with the Act, provided there is at least substantial compliance with the mandatory procedural requirements.

FACTS:

  • Raza Buland Sugar Co. Ltd. (appellant) is a public limited company operating two sugar factories in Rampur, Uttar Pradesh, with several buildings, including residential ones.
  • The Municipal Board, Rampur (respondent), sought to impose a water tax on lands and buildings under Section 128(1)(x) of the U.P. Municipalities Act, 1916.
  • As required by Section 131(3) of the Act, the Board published its tax proposals and draft rules for public objections. However, the publication occurred in an Urdu newspaper widely circulated in Rampur, though the notice itself was in Hindi.
  • Section 94(3) of the Act mandates that tax-related publications be made in a local Hindi newspaper or, if unavailable, in a manner prescribed by the State Government. The Board did not seek State Government approval for an alternative publication mode.
  • The tax was imposed from April 1, 1957, at a rate of 10% of the annual value of lands and buildings. Subsequently, demand notices for the years 1957–58 and 1958–59 were issued to the appellant on October 7, 1958.
  • The appellant objected to the imposition, arguing:
  • Non-compliance with the mandatory publication process under Section 131(3) and Section 94(3).
  • Exemption under Section 129(a) as most of their buildings were beyond 600 feet from the nearest standpipe or water source provided by the Board.
  • Upon rejection of their objections by the Municipal Board, the appellant approached the Allahabad High Court in December 1958 by filing a writ petition under Article 226 of the Constitution, challenging the validity of the water tax and the procedural irregularities.
  • The High Court dismissed the writ petition, holding that:
  • The procedural requirements under Section 131(3) and Section 94(3) had been substantially complied with.
  • The publication in an Urdu newspaper with wide circulation, despite being technically non-compliant, fulfilled the purpose of public notification.
  • Section 135(3) of the Act validated the imposition through notification in the Government Gazette.
  • The High Court granted the appellant a certificate of appeal under Article 133(1)(c) of the Constitution, allowing the case to be brought before the Supreme Court.

HELD:

  • The Supreme Court held that Section 131(3) could be divided into two parts:
  • The first part, mandating publication of proposals and draft rules for public objections, is essential and mandatory to ensure taxpayer participation in the democratic process.
  • The second part, specifying the manner of publication under Section 94(3), is directory and allows substantial compliance.
  • The Court ruled that while the publication did not adhere strictly to Section 94(3), the notice in Hindi, published in an Urdu newspaper with wide circulation, constituted substantial compliance.
  • The Supreme Court held that Section 135(3) of the Act establishes conclusive proof of compliance with procedural requirements, provided the mandatory provisions are substantially fulfilled. In this case, the notification in the Government Gazette validated the tax.
  • Regarding the appellant’s exemption claim under Section 129(a), the Court agreed that water-tax liability requires a building to be within 600 feet of a standpipe or public water source. However, due to insufficient evidence, the Court left this issue unresolved, allowing the appellant to pursue it through appropriate legal remedies.
  • The appeal was dismissed, and the imposition of the water tax was upheld.
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Ultra Vires

M/S. Pankaj Jain Agencies v. Union of India (1995 AIR 360)

M/S. PANKAJ JAIN AGENCIES V. UNION OF INDIA

M/S. Pankaj Jain Agencies v. Union of India (1995 AIR 360)

ISSUE:

  • Whether the impugned notification (No. 142/86-Cus.) was validly promulgated and enforceable, given the alleged delay in making it known to the affected parties?
  • Whether the notification violated the conditions prescribed under Section 25(3) of the Customs Act, 1962, by effectively imposing a new duty not provided for under the statutory provisions?
  • Whether the enhanced duty constituted an unreasonable restriction on the petitioner’s fundamental rights under Article 19(1)(g) of the Constitution?

RULE:

  • A notification or subordinate legislation acquires enforceability upon its publication in the Official Gazette, which is deemed sufficient for making the law known within the territory it operates.
  • Taxes or duties, including customs duties, are not per se violative of Article 19(1)(g) unless they destroy the right to carry on trade or business, with excessiveness alone not constituting a violation.

FACTS:

  • M/s Pankaj Jain Agencies, the petitioner, was engaged in importing components of ball and roller bearings, specifically “cups,” which were categorized as parts of ball bearings under the Customs Tariff Act, 1975.
  • The petitioner acquired replenishment licenses from M/s Geo Millers & Co. Pvt. Ltd., which were subsequently transferred to M/s Ashoka Enterprises and later assigned to the petitioner. These licenses were used to import goods under concessional duty rates.
  • An agreement was entered into with M/s Business Birds, Singapore, for the supply of “cups” of Chinese origin. The goods were shipped in three consignments to Bombay Port in early 1986.
  • The first consignment of 8,600 pieces arrived on January 15, 1986, and was cleared by the customs authorities under the existing Notification No. 70/85-Cus., dated March 17, 1985, which granted reduced duty rates. The controversy for this consignment was limited to its assessable value.
  • The second and third consignments, consisting of 5,000 and 13,000 pieces, arrived on February 10, 1986. The Bills of Entry for home consumption were filed on February 19, 1986.
  • On February 13, 1986, the Central Government issued Notification No. 142/86-Cus., amending the earlier notification and substantially increasing the duty on parts and components of ball bearings.
  • The petitioner argued that the increased duty was inapplicable to the two consignments as the notification was not made known in Bombay until February 19, 1986, when the Bills of Entry were filed.
  • The petitioner further claimed that the notification exceeded the powers under Section 25(1) of the Customs Act, 1962, as it effectively imposed a new duty, which was not statutorily contemplated for parts of ball bearings under the Customs Tariff Act, 1975.
  • Additionally, the petitioner contended that the significant increase in duty, which raised their liability from ₹1,84,341 to ₹6,42,065, was an unreasonable restriction on their fundamental right to trade under Article 19(1)(g) of the Constitution.
  • Challenging the vires and applicability of the notification, the petitioner filed a writ petition under Article 32 of the Constitution, making the Union of India and other concerned authorities the respondents.

HELD:

  • The Supreme Court held that the impugned notification became enforceable upon its publication in the Official Gazette on February 13, 1986, as per the requirements of Section 25(1) of the Customs Act, 1962. It ruled that the notification was validly promulgated and enforceable from that date.
  • The Court ruled that physical availability or knowledge of the notification in Bombay was not a prerequisite for its enforceability. Publication in the Official Gazette was deemed sufficient to bring the notification into effect within the country.
  • The Court rejected the petitioner’s argument that the notification imposed a new duty, clarifying that it merely modified the scope of the exemption under an existing framework, without exceeding the statutory duty rates provided under the Customs Tariff Act, 1975.
  • Addressing the contention under Article 19(1)(g), the Court held that duties of customs, even if high, do not per se constitute an unreasonable restriction on the right to trade or business. Excessiveness alone does not violate constitutional rights unless it destroys the right to carry on trade, which was not demonstrated in this case.
  • The Court concluded that the petitioner failed to establish any procedural or substantive infirmities in the notification. Consequently, the writ petition was dismissed, and the increased duty was upheld as valid and applicable.
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Ultra Vires

Naraindas Indurkhya v. The State of Madhya Pradesh (1974 AIR 1232)

NARAINDAS INDURKHYA V. THE STATE OF MADHYA PRADESH

Naraindas Indurkhya v. The State of Madhya Pradesh (1974 AIR 1232)

ISSUE:

  • Does the State Government possess the authority under its executive power to prescribe textbooks for use in schools prior to the enactment of specific statutory provisions?
  • Is the prescription of textbooks by the State Government and the Board consistent with the principles of non-discrimination under Article 14 and the right to carry on trade or business under Article 19(1)(g) of the Constitution?

RULE:

  • Executive Power of the State (Article 162): The State Government can exercise executive power in matters where it has legislative competence, even in the absence of specific statutory provisions, provided such actions do not infringe upon the rights of individuals.
  • Principle of Ultra Vires: Statutory bodies, such as the Board of Secondary Education, can only exercise powers expressly conferred upon them by their enabling statute. Powers not explicitly granted or necessarily implied are deemed ultra vires and invalid.

FACTS:

  • Naraindas Indurkhya, the petitioner, was a publisher engaged in printing, publishing, and selling textbooks for schools in Madhya Pradesh.
  • In 1959, the Madhya Pradesh Secondary Education Act established the Board of Secondary Education. The Board was empowered to prescribe courses of instruction but not textbooks explicitly.
  • Private publishers were invited to submit textbooks for evaluation, with recommendations based on an elaborate selection process involving expert reviewers.
  • The petitioner submitted textbooks for approval under the Board’s procedure. However, none of his books were selected, as they were deemed substandard in content and printing quality. The petitioner alleged arbitrary discrimination against his publications.
  • By 1971, the State Government began prescribing “nationalized” textbooks produced by the Madhya Pradesh Textbook Corporation (a government-controlled entity), reducing reliance on private publishers, including the petitioner.
  • The Madhya Pradesh Prathmik Middle School Tatha Madhyamik Shiksha (Pathya Pustakon Sambandhi Vyavastha) Adhiniyam, 1973 (hereafter 1973 Act) was enacted, granting the State Government express authority to prescribe textbooks under Section 4(1). Section 4(2) recognized textbooks prescribed earlier as valid until revised under the Act.
  • On 28 March 1973, the Board issued a notification recommending and prescribing textbooks for the 1976 Higher Secondary School Certificate Examination. Subsequently, the State Government issued a notification on 24 May 1973, prescribing additional textbooks, claiming compliance with the mandatory consultation requirement under Section 4(1) of the 1973 Act.
  • The petitioner filed a writ petition under Article 32 of the Constitution, alleging violations of his rights under Articles 14 and 19(1)(g).

HELD:

  • The Supreme Court held that under Article 162 of the Constitution, the State Government had executive power to prescribe textbooks in the absence of specific statutory provisions, provided such actions did not infringe individual rights.
  • The Court ruled that textbooks prescribed by the State Government before the 1973 Act’s enactment were validly in force under Section 4(2) of the Act. The State Government’s actions in prescribing textbooks through executive power did not infringe the petitioner’s rights, as no publisher has a guaranteed right to have their books prescribed.
  • The Court further held that the Board lacked statutory authority to prescribe textbooks on languages or make their use obligatory for schools. This power was not conferred explicitly or impliedly by the 1959 Act or the 1965 regulations. Such actions were ultra vires and without binding effect.
  • The Court clarified the distinction between recommending and prescribing textbooks. Recommended textbooks carry persuasive value but no binding obligation, while prescribed textbooks must be followed by schools.
  • The Court held that the State Government’s 24 May 1973 notification prescribing textbooks was invalid as there was no prior consultation with the Board as required by Section 4(1). Consultation with the Chairman alone did not satisfy the statutory requirement of consulting the entire Board.
  • The Supreme Court ruled that Section 4 of the 1973 Act was not unconstitutional. The discretionary power conferred on the State Government to prescribe textbooks was guided by the objective of ensuring the availability of high-quality resources for education and did not amount to arbitrary or unguided discretion.
  • The Court concluded that the petitioner’s claims under Articles 14 and 19(1)(g) were unfounded. The policy of prescribing nationalized textbooks was not discriminatory, nor did it amount to a denial of equal opportunity for publishers.
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Ultra Vires

Harla v. State of Rajasthan AIR 1951 SC 467

HARLA V. STATE OF RAJASTHAN

Harla v. State of Rajasthan AIR 1951 SC 467

ISSUE:

  • Whether the Jaipur Opium Act, 1923, enacted by a resolution of the Council of Ministers, without promulgation or publication, constituted valid law?
  • Whether the retrospective amendment of the Jaipur Opium Act in 1938 could validate the law retroactively without original compliance with promulgation or publication requirements?

RULE:

  • A law cannot become operative unless it is promulgated or published in a recognisable manner, ensuring the public can reasonably access and understand it.
  • In the absence of specific legal provisions or customary rules, the principles of natural justice require that laws affecting rights and liberties must be brought to public notice through adequate publication.

FACTS:

  • In 1922, the Maharaja of Jaipur passed away, leaving a minor successor to the throne. To manage the administration of the Jaipur State during the minority of the Maharaja, the Crown Representative appointed a Council of Ministers to govern and legislate on behalf of the State.
  • On December 11, 1923, the Council of Ministers passed a resolution enacting the Jaipur Opium Act, 1923. However, the Act was not promulgated or published in the Gazette or through any other means of public notification, leaving its existence unknown to the general public.
  • Around the same time, the Jaipur Laws Act, 1923, was also enacted by the Council of Ministers. This Act specified in Section 3(b) that laws to be administered by the courts in Jaipur State must be “published in the Official Gazette.” The Jaipur Laws Act came into force on November 1, 1924.
  • The Jaipur Opium Act remained unpublished and unpromulgated, yet in 1938, the Act was amended to include a provision stating that it would retroactively come into force from September 1, 1924. However, even after this amendment, the Act was not published or made accessible to the public.
  • On October 8, 1948, Harla, the appellant, was accused of violating Section 7 of the Jaipur Opium Act, 1923. He was convicted in a trial court and fined ₹50 for the offence.
  • Harla appealed his conviction, arguing that the Jaipur Opium Act was invalid because it was neither promulgated nor published, and thus, could not be considered enforceable law.
  • The High Court of Rajasthan dismissed the appeal, upholding the conviction. The High Court held that the resolution of the Council of Ministers was sufficient to make the law enforceable, even without promulgation or publication.
  • Dissatisfied with this ruling, Harla appealed to the Supreme Court of India, which granted special leave to address the legal issue of whether a law passed without promulgation or publication could have binding legal force.

HELD:

  • The Supreme Court ruled that a law cannot be considered valid or enforceable unless it is promulgated or published in a manner that makes it accessible to the public. Without such publication, it is impossible for citizens to have knowledge of the law, violating principles of natural justice.
  • The Court emphasized that laws must be publicized to ensure fairness and transparency. It stated that subjects cannot be penalized under laws they could not reasonably know about or access, as doing so would be “abhorrent to civilized society.”
  • The Jaipur Opium Act, 1923, was declared invalid because it was neither promulgated nor published at the time of its passage or thereafter, as required by the Jaipur Laws Act, 1923. The retroactive amendment in 1938 could not cure the invalidity, as a law that was invalid at inception cannot be made valid through retrospective measures.
  • The Court also noted that the Council of Ministers was not a sovereign body but derived its authority from the Crown Representative. Therefore, its resolutions required promulgation or publication to attain legal validity.
  • The Court held that the appellant, Harla, could not be convicted under an unenforceable law. It set aside the conviction and fine, ruling in favor of Harla. The appeal was allowed, and the Court reaffirmed the fundamental principle that laws must be made known to those they govern.
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Govindlal Chhaggan Lal Patel v. The Agricultural Produce Market Committee, Godhra and Others, 1976 AIR 263.

GOVINDLAL CHHAGGAN LAL PATEL V. THE AGRICULTURAL PRODUCE MARKET COMMITTEE, GODHRA AND OTHERS

Govindlal Chhaggan Lal Patel v. The Agricultural Produce Market Committee 1976 AIR 263.

ISSUE:

  • Whether the notification issued under Section 6(5) of the Gujarat Agricultural Produce Markets Act, 1964, was invalid due to non-publication in Gujarati in a local newspaper?
  • Whether the procedural requirements of publication under Section 6(5), as read with Section 5, are mandatory or directory?

RULE:

  • Procedural safeguards in statutes with penal consequences, especially those restricting trade, are mandatory and must be strictly adhered to, as they protect the rights of affected parties by ensuring proper notice and opportunity for objections.
  • The term “shall” is presumptively mandatory, especially where it governs actions that significantly impact legal rights, unless there is compelling evidence of legislative intent to treat it as directory.

FACTS:

  • The appellant, Gvindlal Chhaggan Lal Patel, was prosecuted under the Gujarat Agricultural Produce Markets Act, 1964, for purchasing ginger in January and February 1969 without obtaining a license, as required under Section 8 of the Act.
  • The case arose when an Inspector of the Godhra Agricultural Produce Market Committee filed a complaint alleging a violation of the Act, which mandates licensing for trade in regulated agricultural produce within designated market areas.
  • The inclusion of ginger as a regulated item in the Godhra market area was based on a notification issued under Section 6(5) of the Act. This section requires notifications to be published in the Official Gazette and in Gujarati in a local newspaper to ensure adequate publicity.
  • The appellant contested the prosecution, arguing that the notification was invalid as it was not published in a Gujarati newspaper as required by the Act.
  • The Judicial Magistrate, First Class, Godhra, acquitted the appellant, holding that the prosecution had failed to prove that the notification was validly published or promulgated.
  • On appeal, the Gujarat High Court reversed the acquittal, presuming the validity of the notification and convicting the appellant under Section 36 of the Act, imposing a fine of ₹10.
  • The appellant appealed to the Supreme Court, contending that the High Court erred by:
  • Ignoring the mandatory publication requirements under Section 6(5).
  • Relying on a precedent under the Bombay Agricultural Produce Markets Act, which had different procedural standards.

HELD:

  • The Supreme Court held that Section 6(5) of the Gujarat Act mandates compliance with the procedural requirements in Section 5, including publication in Gujarati in a local newspaper.
  • The use of “shall” in Section 6 denotes that these requirements are mandatory, ensuring transparency, public awareness, and the protection of traders’ and agriculturists’ rights.
  • The Court found the notification, issued on February 16, 1968, invalid as it was not published in a Gujarati newspaper, rendering the inclusion of ginger in the list of regulated produce legally unenforceable.
  • The High Court erred by relying on a precedent under the Bombay Act and by assuming the notification’s validity without considering the stricter procedural requirements of the Gujarat Act.
  • The Supreme Court reinstated the acquittal by the Judicial Magistrate and held that no prosecution could be sustained based on the invalid notification.
  • The appellant’s fine of ₹10 was ordered to be refunded, emphasizing the importance of strict adherence to procedural safeguards in regulatory statutes with penal consequences.
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V. Sudeer v. Bar Council of India AIR 1999 SC 1167

V. SUDEER V. BAR COUNCIL OF INDIA

V. Sudeer v. Bar Council of India AIR 1999 SC 1167

ISSUE:

  • Whether the Bar Council of India had the authority under the Advocates Act, 1961, to enact the Training Rules, 1995, requiring pre-enrolment training as a condition for enrollment?
  • Whether the Training Rules, 1995, violate the fundamental rights guaranteed under Articles 14 and 19(1)(g) of the Constitution of India by being arbitrary, unreasonable, or discriminatory?

RULE:

  • Rule-making authorities cannot impose additional conditions for enrollment beyond those explicitly permitted by statutory provisions.
  • Any rule prescribing pre-enrollment training or similar requirements must derive clear authority from the enabling legislation; otherwise, such rules are ultra vires and invalid.

FACTS:

  • The dispute arose when V. Sudeer, a law graduate, sought enrollment as an advocate under the Advocates Act, 1961. He challenged the Bar Council of India Training Rules, 1995, which introduced pre-enrolment training and apprenticeship as a mandatory condition for enrollment.
  • The Bar Council of India framed the Training Rules under Section 24(3)(d) and Section 49(1) of the Advocates Act, claiming these provisions granted it the authority to set additional conditions for enrollment to uphold professional standards.
  • The petitioner contended that the Advocates Act only required a recognized law degree for enrollment, and the imposition of training was an unjustified barrier not authorized by the statute.
  • The petitioner argued that the Rules violated fundamental rights under Article 19(1)(g) (right to practice a profession) and Article 14 (equality before law) of the Constitution of India.
  • Procedurally, the Training Rules were challenged in two High Courts, leading to conflicting decisions:
  • The Bombay High Court upheld the Rules, dismissing a petition filed by the Bar Council of Maharashtra and Goa, which had argued the Rules exceeded the Bar Council of India’s powers.
  • The Punjab & Haryana High Court ruled the Training Rules could not apply retrospectively to candidates who had obtained law degrees before the Rules were notified.
  • This conflicting procedural history, along with writ petitions filed under Article 32 of the Constitution, brought the matter to the Supreme Court for final resolution.
  • The Bar Council of India defended the Rules, asserting they were a necessary mechanism to ensure quality in the legal profession and fell within its regulatory powers under the Advocates Act.

HELD:

  • The Supreme Court held that the Bar Council of India lacked the statutory authority to impose pre-enrolment training as a condition for enrollment. It ruled that the Advocates Act, 1961, as amended in 1974, had deliberately removed the requirement for pre-enrolment training.
  • The Court observed that Parliament’s omission of pre-enrolment training from the Act signified legislative intent to do away with such a requirement, and the Bar Council of India could not reintroduce it indirectly through subordinate legislation.
  • The Court emphasized that the power under Section 24(3)(d) of the Advocates Act was limited to making eligible certain categories of persons not covered under Section 24(1). It could not be used to impose additional conditions for persons who already satisfied the statutory requirements for enrollment.
  • The Supreme Court ruled that the Training Rules were ultra vires the Advocates Act, as they imposed conditions not expressly authorized by the statute. It affirmed that rule-making bodies could not exceed the powers granted by their enabling legislation.
  • The Court further held that the Rules violated Article 19(1)(g) of the Constitution by imposing unreasonable restrictions on the right to practice law. The pre-enrolment training requirement created an unjustified hurdle without a legal basis.
  • The Court declared the Rules arbitrary and violative of Article 14 of the Constitution, as they discriminated against law graduates by imposing conditions that were neither rational nor necessary.
  • The Supreme Court struck down the Training Rules, allowing the appeal filed by the Bar Council of Maharashtra and Goa and resolving the conflicting High Court decisions. The Court reinforced that enrollment as an advocate must strictly adhere to the statutory framework laid out in the Advocates Act, 1961.
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Banwarilal Agarwalla v. The State of Bihar 1961 AIR 849

BANWARILAL AGARWALLA v. THE STATE OF BIHAR

Banwarilal Agarwalla v. The State of Bihar 1961 AIR 849

ISSUE:

  • Whether Section 76 of the Mines Act, 1952, which allows for the prosecution of shareholders and directors of a private company owning a mine, violates Article 14 of the Constitution?
  • Whether regulations framed without adherence to mandatory procedural safeguards, such as consultation with prescribed authorities, can be deemed valid?

RULE:

  • A statutory provision ensuring equal liability among individuals similarly situated does not violate the principle of equality under Article 14 of the Constitution, provided it serves a legitimate objective and avoids arbitrary discrimination.
  • Compliance with mandatory procedural safeguards is a prerequisite for the validity of regulations. Non-adherence renders the regulations invalid unless a specific exception is provided by the legislature.

FACTS:

  • On February 20, 1958, a tragic accident occurred at the Central Bhowra Colliery in Dhanbad, Bihar, which resulted in the deaths of 23 workers. An inquiry under Section 24 of the Mines Act, 1952, was conducted to investigate the causes of the accident.
  • Based on the findings of the inquiry, a complaint was filed by the Regional Inspector of Mines, Dhanbad, against Banwarilal Agarwalla, who was a shareholder and director of the private company owning the colliery. The charges included violations under Section 74 of the Mines Act for contravention of Regulations 107 and 127 of the Coal Mines Regulations, 1957.
  • The Sub-Divisional Officer, Dhanbad, took cognizance of the complaint, and criminal processes were issued against Agarwalla, who was subsequently summoned to face prosecution.
  • Agarwalla filed a writ petition before the Patna High Court under Article 226 of the Constitution, seeking to quash the criminal proceedings against him.
  • The Patna High Court dismissed the writ petition summarily, upholding the continuation of the criminal proceedings against Agarwalla.
  • Agarwalla then approached the Supreme Court, seeking special leave to appeal against the Patna High Court’s order.
  • The Supreme Court granted special leave to appeal and examined the constitutionality of Section 76 and the legality of the Coal Mines Regulations, 1957, with regard to the mandatory consultation requirement under Section 59(3) of the Mines Act, 1952.

HELD:

  • The Supreme Court held that Section 76 of the Mines Act, 1952, which allows for the prosecution of shareholders or directors of a private mining company, did not violate Article 14 of the Constitution.
  • The term “any one” was interpreted to mean “every one,” making all shareholders and directors liable to prosecution. This provision was intended to ensure accountability without discrimination, applying equally to all involved in the ownership and management of the mine.
  • The Court also held that the Coal Mines Regulations, 1957, were invalid because they were framed without consultation with the Mining Board, as required under Section 59(3) of the Mines Act, 1952.
  • The consultation with the Mining Board under the 1952 Act was mandatory, and the absence of such consultation rendered the regulations invalid.
  • The issue of whether consultation with the Mining Boards under the 1923 Act could suffice was left for the lower court to determine.
  • The Supreme Court remanded the case to the Sub-Divisional Magistrate to assess whether the mandatory consultation took place. If the consultation was found to be absent, the regulations would be invalid, and Agarwalla would be entitled to acquittal. Otherwise, the case should proceed accordingly.
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Union of India v. Ganesh Das Bhojraj (AIR 2000 SC 1102)

UNION OF INDIA V. GANESH DAS BHOJRAJ

Union of India v. Ganesh Das Bhojraj (AIR 2000 SC 1102)

ISSUE:

  • Whether an exemption notification under Section 25 of the Customs Act, 1962, becomes enforceable solely upon its publication in the Official Gazette?
  • Whether the publication of a notification must be accompanied by its availability to the public for it to be legally operative?

RULE:

  • Operative Effect of Publication: A notification becomes legally effective upon publication in the Official Gazette, provided the governing statute prescribes this mode of notification, without requiring additional measures such as public availability unless explicitly stated.
  • Standard for Legislative Promulgation: Delegated legislation or subordinate notifications are deemed enforceable if published in accordance with the prescribed statutory mode, which typically requires gazette publication as a sufficient and customary method of notifying concerned parties.

FACTS:

  • M/s Ganesh Das Bhojraj (the respondent) imported a consignment of Green Beans (Pulses) weighing 505.505 metric tons under an invoice dated December 31, 1986.
  • On February 5, 1987, the respondent filed a bill of entry seeking clearance of the imported goods without payment of customs duty, relying on Exemption Notification No. 129/76-Cus, dated August 2, 1976, which exempted such goods from duty.
  • However, the exemption notification had been amended the previous day, February 4, 1987, through Notification No. 40/87-Cus, which imposed a 25% basic customs duty on the goods.
  • The respondent contended that the amended notification was not enforceable as it had not been duly published or made available to the public on February 4, 1987, the day it was issued.
  • The Customs Department, acting under the amended notification, demanded payment of 25% duty before clearing the goods.
  • The respondent filed a writ petition in the Bombay High Court, challenging the enforceability of Notification No. 40/87-Cus. The respondent argued that the notification did not come into effect until it was made accessible to the public.
  • The Bombay High Court relied on its Full Bench decision in Apar (P) Ltd. v. Union of India, which held that a notification under Section 25 of the Customs Act, 1962, is not enforceable unless it is made available to the public. Based on this reasoning, the court allowed the respondent’s petition and quashed the duty demand.
  • Aggrieved by the High Court’s decision, the Union of India (the appellant) appealed to the Supreme Court by special leave petition, arguing that publication in the Official Gazette suffices to make a notification enforceable, as required under Section 25 of the Customs Act.

HELD:

  • The Supreme Court held that a notification under Section 25 of the Customs Act, 1962, becomes effective upon its publication in the Official Gazette, and there is no requirement for additional steps, such as making the notification available to the public.
  • The Court ruled that publication in the Official Gazette constitutes adequate notice to the public, as the Gazette is the recognized official medium for disseminating government notifications.
  • It was clarified that the legislative framework does not require affected individuals to have personal knowledge of a notification for it to be legally enforceable.
  • The Court overruled the Bombay High Court’s reliance on Apar (P) Ltd. v. Union of India, stating that the earlier judgment in Pankaj Jain Agencies v. Union of India represents the correct exposition of law.
  • In Pankaj Jain Agencies, the Court had emphasized that knowledge of a notification is not a prerequisite for its legal validity once it is published in the Gazette.
  • The Court further rejected the respondent’s argument that the notification was not published on February 4, 1987, noting that the original Gazette copy produced before the Court confirmed its publication on the same date.
  • Consequently, the Supreme Court allowed the appeal, quashed the Bombay High Court’s decision, and held the respondent liable to pay customs duty at the rate of 25% as per Notification No. 40/87-Cus.
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Collectors Of Central Excise v. New Tobacco Co. (1998) 8 SCC 250

COLLECTORS OF CENTRAL EXCISE V. NEW TOBACCO CO.

Collectors Of Central Excise v. New Tobacco Co. (1998) 8 SCC 250

ISSUE:

  • Whether a notification under the Central Excise Act becomes enforceable on the date of its printing in the official Gazette or only when it is made publicly accessible?
  • Whether the liability to pay differential excise duty be imposed retroactively for the period before a notification is made available to the public?

RULE:

  • A notification under the Central Excise Act becomes effective only when it is made publicly accessible, ensuring that individuals affected by it have the opportunity to be aware of its provisions.
  • Principles of natural justice require that laws or notifications imposing obligations or penalties must be effectively communicated to the public to ensure fairness and legal enforceability.

FACTS:

  • The New Tobacco Company (previously Duncan Tobacco Company), a manufacturer of cigarettes, paid excise duty based on Central Excise Notification No. 30/79, dated March 1, 1979. This notification was periodically amended until it was rescinded by Notification No. 284/82 on November 30, 1982.
  • Notification No. 284/82 introduced new and higher rates of excise duty but was not immediately available to the public due to delays in dissemination.
  • Between November 30, 1982, and December 8, 1982, the company cleared 79,456 million cigarettes and paid duty at the earlier rates prescribed under Notification No. 30/79. The company claimed it was unaware of the new notification as it had not been made publicly accessible.
  • On December 22, 1982, the Assistant Collector of Central Excise issued a Show Cause Notice to the company, demanding payment of the differential duty amounting to the difference between the old and new rates for the period November 30 to December 8, 1982.
  • The company contended that the new notification became enforceable only on December 8, 1982, when it was made available for public access. They argued that until then, the earlier notification remained applicable.
  • On April 11, 1983, the Assistant Collector rejected the company’s argument and confirmed the demand for the differential duty.
  • The company appealed to the Collector of Central Excise (Appeals), who upheld the Assistant Collector’s decision on October 4, 1985.
  • Dissatisfied, the company further appealed to the Customs, Excise, and Gold (Control) Appellate Tribunal (CEGAT). It argued that under the law and principles of natural justice, a notification must be made available to the public to be considered effective.
  • In support of its claim, the company presented a letter dated August 2, 1983, from the Controller of Publications, Ministry of Finance, stating that Notification No. 284/82 was made available for sale to the public only on December 8, 1982.
  • CEGAT, relying on this evidence and earlier judicial precedents, ruled in favor of the company. It held that the notification became enforceable only on December 8, 1982, when it was made available to the public. The Tribunal concluded that the company was not liable to pay the differential duty for the disputed period.
  • The Collector of Central Excise, representing the government, challenged this decision in the Supreme Court under Section 35L(b) of the Central Excise Act, 1944, contending that a notification becomes effective from the date of its publication in the official Gazette, irrespective of public accessibility.

HELD:

  • The Supreme Court upheld the decision of the Tribunal in Civil Appeal No. 4569 of 1989, agreeing that a notification becomes effective only when it is made publicly accessible, not merely when it is printed in the Gazette.
  • The Court emphasized that Section 38 of the Central Excise Act mandates that notifications be published in the official Gazette, but publication requires making them available to the public. Mere printing does not satisfy this requirement.
  • The Court relied on principles of natural justice, highlighting that laws or notifications imposing obligations or penalties must be effectively communicated to the affected parties to ensure fairness and legal validity.
  • It was held that the new notification dated November 30, 1982, became enforceable only on December 8, 1982, when it was made publicly available. Hence, the company was not liable to pay differential duty for the period between November 30 and December 8, 1982.
  • Other appeals concerning similar issues were remitted to lower authorities, including the Assistant Collector of Central Excise, to determine the date when the respective notifications became effective based on public accessibility.
  • The Court directed that the determination of refunds or liabilities be conducted under Section 11-B of the Central Excise Act, allowing both parties to present additional evidence.
  • The Court clarified that merely printing a notification in the Gazette without making it available to the public does not constitute effective publication under the law.