UNION OF INDIA AND ANR. versus M/S. G.T.C. INDUSTRIES LTD., BOMBAY

Citation: [2003] 3 S.C.R. 48 · Decided: 27-03-2003 · Supreme Court of India · Bench: S.S.M. QUADRI · Disposal: Disposed off

Judgment (excerpt)

A 
B 
UNION OF INDIA AND ANR. 
v. 
MIS. G.T.C. INDUSTRIES LTD., BOMBAY 
MARCH 27, 2003 
(SYED SHAH MOHAMMED QUADRI AND ASHOK BHAN, JJ.) 
Central Excise Act, 1944-So?Ction 14-Evasion of excise duty-Notice-
Oral submission by co-noticee before authority-Opportunity to rebut the 
C same not given to noticee-company-Adverse order against the noticee-
Company re(ving on the oral submission of co-noticee-Order of the authority 
quashed by High Court holding the reliance on the submission as wrong-On 
appeal plea that reliance on submission was not placed by authority and even 
if placed same may be ignored as other material sufficient to come to the 
conclusion-Held, reliance on the submission factually proved-Order of 
D authority cannot be sustained ignoring the submission-Adverse finding could 
not have been recorded against noticee-Company relying on the oral submission 
without any supporting material and without opportunity to the Company to 
meet the same. 
E 
Practice and Procedure: 
Quasi Judicial Order-· Review of-Held, has to be judged on the basis 
of judgment contained therein and not on the basis of pleas in the counter 
affidavit or oral arguments. 
Show cause notices were issued to the respondent-company, its front 
F company and its partners among others for having evaded payment of 
excise duty. One of the partners appeared before the Collector of Central 
Excise in absence of the representatives of the respondent-company and 
made oral submissions. Respondent-company requested to issue summons 
under Section 14 of Central Exdse Act, 1944 to partners in order to cross 
G examine them. The Collector refused to issue summons. The ruling of the 
Collector declining to issue summons was challenged by a writ petition 
on the ground of violation of principles of Natural Justice. High Court 
initially stayed all the proceedings in pursuance to the show cause notice 
by its interim order, but later vacated the same. Hence the matter was 
taken to this Court by way of Special Leave Petition wherein the Court 
H 
48 
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U.0.1. v. G.T.C. INDUSTRIES LTD., 
49 
had directed the Collector to pass the final order and place the same before A 
High Court. The Collector as per the direction of this Court passed the 
final order relying on the statement of the partner and forwarded the order 
to the High Court. High Court quashed the order of the Collector on the 
grounds that denial of opportunity to cross examine the partners amounted 
to breach of principles of Natural Justice; and that Collector had erred B 
in placing reliance on the submissions of the partners. The matter was 
remanded to the Collector with a direction to summon the partners. 
In appeal to this Court appellant-State contended that the Collector 
in coming to the finding did not rely on the statement of the partner; and 
that order of the Coll~ctor should be ~ustained by ignoring the statement C 
of the partner as there was other sufficient material on record to sustain 
and justify the said order. 
Respondent-company contended that the order of the Collector was 
based on the statement ·made by the partner before the authorities; and 
that the partner could not be relied on for recording an adverse order D 
against the respondent-company. 
Disposing of the appeals, the Court 
HELD: 1. Collector passed his order in original quoting extensively 
from the statement made before him by the partner makes it clear that 
the Collector had placed strong reliance on his statement. It is specifically E 
recorded in the order that the departmental representatives who appeared 
before the Collector had also plactd strong reliance on his statement. The 
Collector's order is based largely and substantially if not entirely on his 
statement. High Court in its judgment has also recorded a finding that 
the Collector in its order had substantially relied upon his statement. 
p 
(54-G, H; 55-A] 
2. It cannot be said that the order of the Collector should be sustained 
by ignoring the statement of the partner as there was other sufficient 
material on record to sustain and justify the said order. It may not be 
possible to separate or disentangle his statement from other material G 
evidence on record. A quasi-judicial order has to be judged on the basis 
of reasoning contained therein and not on the basis of pleas put forward 
by the person seeking to sustain the order in its counter affidavit or oral 
arguments before the court. [55-D, E] 
3. No statement was made by t

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