SIDHESHWAR SAHAKARI SAKHAR KARKHANA LTD. versus UNION OF INDIA AND ORS.

Citation: [2005] 2 S.C.R. 317 · Decided: 23-02-2005 · Supreme Court of India · Bench: RUMA PAL

Judgment (excerpt)

. 
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SIDHESHWAR SAHAKARI SAKHAR KARKHANA LTD. 
A 
v. 
UNION OF INDIA AND ORS. 
FEBRUARY 23, 2005 
[RUMA PAL, ARIJIT PASAYAT AND C.K. TH\K:(ER, JJ.] 
B 
Excise Laws : 
Sugar-Excess Production Scheme-Rebate under Notification No. 132/ 
82 and Clause 3 thereof-Average Production-Consideration of the period C 
of 'nil production' while determining the average production-Held: If there 
is no production of sugar in assessee 's factory in preceding years, assessee 
not entitled to benefit of Notification as the said period cannot be counted and 
has to be ignored-The object of Notification being to provide an incentive to 
manufacturer of sugar to induce them to produce sugar during lean period, D 
revenue authorities were right in ignoring the 'nil production' of two years 
and granting rebate on the basis of average production of the year of production 
only. 
Administrative Law : 
Policy decision-Interference by Court-Scope of-In policy matters, 
court must not interfere unless policy is shown to be contrary to law or 
otherwise arbitrary or unreasonable. 
E 
Constitution of India-Article 2261227-Writ Petition-Maintainability 
of-If Tribunal dismisses the reference application as not maintainable then F 
appellant can invoke the writ jurisdiction of the High Court under Article 2261 
227 of the Constitution. 
The questions arising for consideration in the present appeal are 
whether it was obligatory on the High Court to decide the Writ Petition 
on merits when reference application was dismissed as 'not maintainable' G 
by CEGAT and whether the action of revenue authorities in ignoring the 
'nil' production for two years in 1979-1980 and 1980-81 by the appellant-
society and granting rebate claim on the basis of average production of 
sugar for the year 1978-79 was legal a.nd in consonance with Clause 3 of 
317 
H 
318 
SUPREME COURT REPORTS 
[2005) 2 S.C.R. 
A the Notification No. 132/82. 
Dismissing the appeal, the Court 
HELD: 1. High Court was not justified in disposing of the Writ 
Petition on the ground that it was "not maintainable". When the appellant-
B society was aggrieved by the order passed by CEGAT, there must be a 
remedy available to it. Since Section 3SG of the Central Excise Act, 1944, 
as it then stood, did not apply, CEGAT was right in dismissing the 
application. Once the application was dismissed by CEGAT not on merit, 
but on the ground that it was not maintainable and rio reference could be 
C made to the 'High Court in the light of the provisions then in force, the 
appellant was 'justified iii invoking the writ jurisdiction of the High Court 
under Article 226/227 of the Constitution..[323-F-GI 
2.1. The action of revenue authorities in ignoring the 'nil' production 
for two years in 1979-1980 and 1980-81 by the appellant-society and 
D granting rebate claim on the basis ofaverage production of sugar for the 
year 1978-79 was legal and in consonance with Clause 3 of the Notification 
No. 132/82. The language used in Clause 3 of the Notification No. 132/82 
is clear, explicit and unambiguous. It states that the average production 
shall be the. corresponding periods among the preceding three years in 
which the factory had 'actually produced' and the period or periods in 
E which it did not produce during the said three years shall be ignored. The 
intention of the Government was ~o grant rebate to those sugar factories 
which had produced sugar in lean months of the previous year or years 
and not to grant such benefit to factory of factories which had not 
produced sugar at all during lean months of the previous year or years. 
F Admittedly, in 1979-80 and 1980-81 there was no production of sugar by 
the appellant and hence, as per the notification, the said period oftwo years 
had to be ignored. Production for the year 1978..:79 alone was, relevant 
and since the appellant had been granted rebate on that basis on additional 
production for the year 1981-82, the action cannot be held illegal. The 
language of notification is clear. It has only one interpretation and the 
G effect must be given to such language. [326-C, E-F; 327-G; 328-B-CJ 
Etikoppaka Co-operativeAgricultw:al Society Ltd. Represented by K.J.N. 
RaJu :and Ors. v. Union of India and Ors., (1979) 4 ELT J 533; Sakthi Sugar 
Ltd., Coimbatore v. Union of India ~nd Ors., (1983) 12 ELT-484 and Belapur 
Sugar & Allied Industries Ltd. v. Collector of Central Excise, Aurangabad, 
H [t 9991 4 sec t 03, referred to. 
SIDHESHWAR SAHAKARI S

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