LexM/S. DHANPAT OIL & GENERAL MILLS versus UNION OF INDIA & ORS.
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4 A M/S. DHANPAT OIL & GENERAL MILLS v. UNION OF INDIA & ORS. JULY 8, 1985 B (R.S. PATHAK AND E.S. VENKATARAMIAH, JJ.] Produce Cess Act, 1966, Sections 2(a),7,8,9(2),10 and 15(2), scope of - Whether proceedings under the Act can be taken without appointing a "Collector" and an "Appellate Authority" by resort to the provisions of section 15 (2) of the Act - Monthly filing of obligatory returns under section 8, whether can be c discontinued on the plea of non~appointment of a "Collector"- Liability to the payment of cess for the products manufacured and a liability to prosecution for not filing returns and paying the cess during the period when the Collector and Appellate Authority had not been appointed. D E F G H The Produce Cess Act, 1966 is a dual enactment. It pro- vides for the levy and collection, as a cess, of customs duty on produce specified in the first schedule to the Act and exported beyond the limits of India; and (ii) of excise duty of the pro- duce specified in the second schedule. Section 8 of the Act requires the occupier of a mill to furnish to the "Collector" every month a return stating the total amount of produce, speci- . fied in the Second Schedule consumed or brought under processing or extracted in the mill during the preceding month. The return has to be furnished before the seventh day of each month together with such other information as may be prescribed, and every such return is to be made in such form and to be verified in such manner as may be prescribed. There must be a "Collector" within the meaning of the Act, that is as defined in section 2(a) of the Act to whom such monthly returns are to be furnished. On non- compliance with the provisions of section 8, the "Collector" so appointed by the Central Govermnent under the Act, is empowered under sub-section 2 of section 9 to proceed at once and make an assessment in the manner prescribed by the Produce Cess Rules 1969. Such a "Collector" was appointed under the Act on July 13, 1970. The Appellate Authority, entitled to hear app~ls from the orders of the collector was appointed on August 21, 1972. The appellant carries. on the business of oil extraction from ground- nut, cotton-seeds, sarson and other oil seeds and also deals in vegetable and other essential oils. On September 29, 1972 the Superintendent, Central Excise, issued a notice requiring t.he ·- DllANPAT OIL & GEN. MILLS v. UNION 5 appellant to produce certain docwnents and to appear before the authority for the purpose of an enquiry pertaining to the cess leviable under the Act, The appellant did not comply with the notice. On December 22, 1972, the Superintendent, Central Excise, issued a further notice r~quiring the appelllant to show cause against the imposition of a penalty for its failure to file a return and deposit the cess. The appellant questioned the _, jurisdiction of the authority to levy cess.A further notice dated September 3, 1973 was issued by the Assistant Collector, Central Excise requiring the appellant to appear before him in connection with the aforesaid proceedings. The appellant, admittedly, did not deposit any cess nor file any return, contending that there was no jurisdiction in the authorities to levy and recover the cess on the products manufactured and dealt in by it. The appellant theo filed a writ petition in the High Court of Punjab & Haryans raising various points, including the question whether , sub- section (2) of section 3 and section 4 of the Act and rule 6 of the Cesa Rules were ultra vires and whether the notices issued by the authorities were"Vaiid on the ground that no machinery bad been provided for the levy of the cess during the relevant period and prayed for relief .against the proceedings. The Writ Petition was dismissed and hence the appeal by special leave. Dismissing the appeal, the Court, lll!LD: 1.1. The entire machinery under the Produce Cesa Act., ,. · 1966 through which the occupier of a mill must discharge his statutory obligations remains non-existent unless a "Collector" within the meaning of the definition in section 2(8) is appointed. So long as there is no Collector there is no obligation on the occupier of a mill to furnish monthly returns and there is no existing statutory authority for taking proceedings for the assessment and collection of the cess. Clearly there can be no Collector for the purpose of the Act unless he is an off
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