TRAVANCORE RAYON LTD. versus UNION OF INDIA

Citation: [1970] 3 S.C.R. 40 · Decided: 28-10-1969 · Supreme Court of India · Bench: J.C. SHAH · Disposal: Appeal(s) allowed

Cited by 3 judgment(s) · cites 2 · see the full citation network in Lexace

Judgment (excerpt)

• 
TRAVANCORE RA YON LTD. 
v. 
UNION OF INDIA 
October 28, 1969 
{J. C. SHAH AND K. S. HEGDE, JJ.] 
Speaking Order-Central Excise and Salt Act, 1944, s. 36---Revisional 
jurisdiction of Central Government-Necessit,v of speaking order while 
rejecting application-Oral 'hearing-When advisable. 
The appellant company was assessed to excise duty on the consump-
tion of "nitro-cellulose lacquer" produced by it. 
The company denied 
that the chemical compound produced and utilised by 
it was "nitro-
cellulose lacquer" within the meaning of the Central Excise and Salt Act, 
1944. The Assistant Collector of Customs confirmed the assessment The 
Collector of Customs, in appeal, gave the company a personal hea·ting 
and rejected the company's claim by a detailed Order. 
Against this 
order the company invoked the revisional iurisdiction of the 
Central 
Government under s. 36 of the Act. The petition was entertained but no 
personal hearing was given to. the company. 
The Government rejected 
the petition by an order which read : 
· "The Government of India have carefully considered the 
points 
made by the applicant(s), but see no justification for interfering with 
the order in appeal. 
The revision application is accordingly rejected." 
The Company appealed to this Court. 
HELD : The case must be remanded to the Central Government to 
be disposed of according to law. 
(i) The Central Government is by s. 36 invested with the judicial 
power of the State. 
A party who approaches the Government in exercise 
of a statutory right for adjudication of a dispute is entitled I!>· know at 
least the official designation of the person who has considered the matter, 
\Vhat was considered by him, and the reasons for recording a decision 
against him. 
To enable the High Court or this Court to exercise its con-
stiutional po~·ers, not only the decision, but an adequate disclosure of 
materials justifying an inference that there has been a judicial considera-
tion of the dispute by an authority competent in that behalf in the light 
of the claim made by the aggrieved party, is necessary. The Court insists 
upon disclosure of 'reasons in support of the order on two grounds : one, 
that the party aggrieved in a proceeding before the High Court or this 
Court has the opportunity to demonstrate that the reasons which persuad-
ed the authority to reject his case were erroneous, the other, that the 
obligation to record reasons operates as a deterrent against possible arbi~ 
trary action by the executive authority 
invested with the judicial power. 
[43 E-H; 46 DJ 
Madhja Pradesh Industries Ltd. v. Union of India, [1966] 1 S.C.R. 
466 held overruled by Bhagat. Raja v. Union of India, 
[1967] 3 S.C.R. 
302. 
Stale of Madhya Pradesh & Anr. v. Seth Narsinghdas fankidas Mehta, 
C.A. No. 621 dated 29-4-69, State of Gujarat v. Patel Raghav Natha & 
A 
B 
c 
D 
E 
F 
G 
Ors. [1970] I S.C.R. 335 and Prag Das Umar Vaishva v. Union of India, 
H 
C.A. No. 723 of 1965 decided on 21-4-69 referred to. 
In this case the communication from the Central Government gave no 
k"easons in support of the order; it did not disclose the "points'' which 
\ '
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I 
•
' • 
A 
8 
TRAVANCORE RAYON I', UNION (Shah, J.) 
41 
\\ere considered, who considered the points, and the reasons for rejecting 
them [46 BJ 
(ii) Where complex and difficult questions requiring familiarity \Vi th 
teC'hnical problems, as in the present case, are raised, it would conduce 
to better administration and rndre satisfactory disposal of the grievances 
of the citizens if personal hearing is given, [43 B-D] 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2252 o.f 
1966. 
Appeal by special leave from the order No. 543 of 1966 dated 
July 16, 1966 of the Government of India, Ministry of Finance. 
New Delhi in Central Excise Revision Application. 
S. Mohan Kwnarafnangalam, Soli J. Sorabji, A. K. Varma, 
c 
Ravinder Narain, J. B. Dadachanji, and 0. C. Mathur, for the 
D 
appellant. 
V. A. Seyid Muhammad and S. P. Nayar, for the resp0ndents. 
B. R. Agarwala, for intervener No. 1. 
So/i J. Sorabji, Ravinder Narain and J. B. Dadachanji, for 
intervener No. 2. 
The Judgment of the Court was delivered by 
Shah, J. 
The appellant Company is engaged in the produc-
tion o.f cellulose film. The Central Excise Inspector reported that 
the appellant Company was producing in its factory nitro-cellulose 
lacquer [falling under tariff Item No. 22(iii)(i) No. 14(iii)(i) of 
E 
the First Schedule to the Central Ex

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