LexSUPERINTENDENT (TECH. I) CENTRAL EXCISE I.D.D. JABALPUR AND ORS. versus PRATAP RAI
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.. \. ''J .. • ., • ""' • - • ' _._> - 729 SUPERINTENDENT (TECH. I) CENTRAL EXCISE I.D.D. JABALPUR AND ORS. v. PRATAP RAI April 26, 1978 [S. MURTAZA FAZAL ALI, JASWANT SINGH AND R. S. PATHAK, JJ.j Natural Justice, Principles of-When an order is struck down by the appel- late authority being in violation of the principles of natural justice, there is no final decision and fresh proceedings can be taken-Interpretation of the Appel- late Collector's orders-Words and Phrases-Meaning of "without pre;udice" Customs Act, Section 122 and 128. A B Twenty-three watches on which no custom duty was paid were seized frotn C the respondent by the Customs Authorities apd in the adjudication proceedings under section 122 of the Customs Act, the Assistant Collector of Customs ordered that the watches which were seized be confiscated and imposed a , penalty of Rs. 250/- on the respondent under Section 112 of the Act. In appeal, the Appellate Collector by his order dated 22-2-1972 vacated "without prejudice" the order of the Assistant Collector .mainly on the ground that the Assistant Collector had not complied with the rules of natural justice. The department interpreted the order as an implied order of remand and issued a fresh notice to the respondent on 27-7-1972 and started fresh adjudication pro- I) ceedings. Thereafter, the respondent filed in the High .court of Madhya Pradesh, a writ petition which was allowed. The notice and the fresh adju- dication proceedings were quashed. Allowing the appeal by special leave, the Court HELD : 1. Where an order passed in appeal vacates the order of the first tribunal on purely technical grounds and expre~ly states that it' was being passed without prejudice which means an order not on the merits of the case, such an order does not debar fresh adjudicatory proceedings which may be justified under the law. It is necessary for the court interpreting an order of this kind to give full and complete effect to the exact words used by the authorities and not to draw a sweeping conclusion merely from the fact that no explicit direction has been made by the appellate authority. '[735 C-D] 2. (a) Whenever an order is struck do'Wll as invalid being in violation of the principles of nafural justice there is no final decision of the cause and fresh proceedings are left open. All that is done is that the order assailed by virtue of its inherent defect is vacated but the proceedings are not terminated . [732 CJ E F --- (b) In tl1e instant ·case :- A perusal of the order of the Appellate Authority clearly sho\vs two im- portant facts: (1) that the Appellant Collector has not set aside or vacated the 01,"der of the Assistant Collector on merits but bas vacated it only on a technical infirn1ity, namely, the violation of the rules of natural justice and that is why the Appeliate Collector has advisedly used the words "without prejudice" in his order, (2) that the Assistant Collector in his order dated 30th June. 1969 had directed confiscation of the watches and imposed a penalty of Rs. 250/- and if the Appellate Collector intended to set aside this order com- pletely and irrevocably then he should have passed a consequential order for refund of the amount of the penalty and release of the property confiscated. The fact that no such order was passed by the Appellate Collector clearly shows that he never intended to bar fresh adjudicatory proceedings provided they were conducted according to the principles of naturnl justice. [731 A, 732 A-Cl (ii) The Appellate Collector found that the order of the Assistant Collec- tor suffr.rrd frnn1 a serious procedural infirmity, viz., that it was passed without 12-315SCI/78 G H B D E 'F 730 SUPREME COURT REPORTS [1978] 3 S.C.R. giving the respondent a proper opportunity of being heard, and therefore, it cannot be said that fresh proceedings by complying with the rules of natural justice could not be started against the respondent. The Appellate Collector has clearly used the words "without prejudice" which also indicate that the order of the Collector was not final and irrevocable. [732 G-H, 733 AJ Mis Thimn1asamudram Tobacco Co. v. Assistant Collector of Central •' Excise, Ne/lore Dt. Ne/lore, A.I.R. 1961 A.P. 324 approved. 3. (a) The implication of the term "without llrejudice" means (1) that the cause or the matter has not been ·decided on merits, (2) that fresh proceedin
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