LexDABUR INDIA LTD. AND ANR. versus STATE OF UTTAR PRADESH AND ORS.
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A DABUR INDIA LTD. AND ANR. v. STATE OF UTTAR PRADESH AND ORS. JULY 12, 1990 B [SABYASACHI MUKHARJI, CJ., K.N. SAIKIA AND c D K. RAMASWAMY, JJ.] Central Excises and Salt Act, 1944: Sections 3, 1 IB-Homeodent tooth paste-Whether homeopathic medicine or toilet preparation- Whether liable to excise duty. Constitution of India, 1950: Article 263-Dispute under two different central legislations-Under one-State authorities to realise and impose taxes-Under the (>/her Central Government-Refund to be paid or adjusted-Should be subject matter of settlement by the pro- posed Council. Medicinal & Toilet Preparations (Excise Duties) Act, 1955: Sec- tions 3( 1) and 4--'Homeodent' tooth paste-Liability to excise duty. M ts Dabur India Limited, petitioner in one set of petitions, is a public limited company engaged in the manufacture of Ayurvedic as E well as Allopathic medicaments, along with cosmetics. It used to manufacture for and on behalf of M ts Sharda Botren Laboratorie-The petitioner in the second set of petitio~a Homeopathic tooth paste called 'Homeodent' out of the raw-materials supplied by M/s Sharda, on job basis. It accordingly manufactured Homeodent during 1985 to 1988, duly paying duties of excise on Homeodent under the Central t F Excises & Salt Act, 1944. The Superintendent of State· Excise visited the factory of M ts Dabur on 18th January, 1988 and enquired about the excisability of Homeodent under the Medicinal & Toilet Preparations (Excise Duties) Act, 1955. He was told that Homeodent had been classified under the G 1944 Act in view of the orders passed by the Central Excise authorities. However, when it was revealed that the Homeodent tooth paste was toilet preparation containing alcohol, within the meaning of section 2(k), read with Item 4 of the Schedule, referred to in section 3 of the 1955 Act, the District Excise Officer caused a common notice dated 17.3.1988 to be served on MfS Dabur requiring it to pay duty aggregat- H ing to Rs.68,13,334.20 under the provisions of the 1955 Act on such 294 • DABUR INDIA v. STATE OF U.P. 295 goods manufactured and cleared between January 1985 and January -\,..1988. This order was passed without issuing any notice to show cause, and without affording any opportunity of hearing, to the petitioner. The Petitioner sent a representation requesting for compliance with the principles of natural justice and also disputing the amount claimed as duty. On 18th March, 1988 the Superintendent of State ~ Excise modified the earlier order and confirmed the demand of duty amounting to Rs.46.67 lakhs, on provisional basis. On that day the Y petitioner deposited a sum of Rs. J 1.66 lakhs and further executed a bank guarantee for the· balance. Simultaneously, the petitioner appealed against the order dated 18th March, 1988. The Excise Com- 'missioner dismissed the appeal. No appeal was filed by M/s Sharda against the demand notice of excise duty under the 1955 Act . - ~ The petitioner moved the High Court. On 13th May, 1988 the High Court directed the petitioner to file a revision petition with the Central Government. Both the petitioners then approached the Central Government in revision. On 22nd September, 1988 the Additional Sec- retary to the Government of India in exercise of his revisional powers allowed the revision filed by M /s Dabur and declared the orders of the District Excise Officer and the Excise Commissioner as null and void having been passed in viol.ition of the principles of natural justice. The revision filed by M /s Sharda was not entertained by the Central ~- <;overnment. on the ground that a right of appeal was vested in Mfs St.arda, which was not availed of. The High Court dismissed Mfs Sharda'& petition challenging the order of the Central Government ._ declining to entertain its review. Against the order of the High Court • M /s Sharda have filed the special leave petition in this Court. On the basis of the revision order, the petitioners called upon the ' ).._, District Excise Officer to refund the amount of Rs.46.67 lakhs reco- vered from it by way of cash payment and encashment of bank guarantee. The State Excise authorities however failed to grant the refund, and instead issued a fresh show-cause notice to the petitioners jointly on 2nd November, 1988. In December 1988, Mfs Dabur moved the High Court under Arti- cle 226 of the Constituti<>n for quashing and setting aside the show- ----
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