1. Heard learned advocates appearing for the parties.
2. As the entire matter is confined to challenge the order impugned on the ground of lack of opportunity of being heard to the petitioners and declaring them ineligible for exemption in electricity duty. The Court was requested to have the hearing of the matter finally and dispose of the same. Accordingly Rule. Ms. Asmita Patel learned AGP waives service of notice of Rule on behalf of respondent nos.1 and 2 and Shri Premal R.Joshi, learned advocate waives service of notice of Rule on behalf of respondent no.3. Rule is fixed forthwith, as it is stated hereinabove, the matter is in a very narrow compass.
3. The petitioners, by way of this petition under Article 226 of the Constitution of India have challenged the order dated 27.08.2010, passed by respondent no.1 rejecting the application made by the petitioners for obtaining certificate for claiming exemption from the payment of electricity duty, as provided under Section 3 of the Bombay Electricity Duty Act, 1958 (hereinafter referred to as 'the Electricity Duty Act', for the sake of brevity).
4. The facts in brief leading to filing this petition, as could be culled out from the memo of petition, deserve to be set out as under:
The petitioner-Company diversified into 100% cotton knitting yarn and knitting fabrics as a new product at Survey nos. 4470, 4472 to 4481 and 4485 at Village Wankaner. This was, claimed to be setting up a new industrial undertaking for seeking necessary exemption from the payment of electricity duties, as envisaged under Section 3 of the Electricity Duty Act. Accordingly an application being an application for seeking appropriate certificate was made on 09.01.2008 to the competent authority which is produced at Page No.41, Annexure-7 to the petition. The said application was time and again heard by an officer namely Shri D.R.Shah. That officer was thereafter replaced by another officer and in the year 2010, as contended by the petitioners in the memo of the petition, without affording any opportunity of being heard passed an order on 27.08.2010, declaring that the petitioner is not entitled to be classified as 'new industrial unit' and therefore, petitioner is not entitled to receive exemption benefits. This order is impugned in this petition and challenged by way of petition under Article 226 of the Constitution of India.
5. Shri A.S.Vakil, learned advocate appearing for the petitioners invited this Court's attention to averments made in Paragraph No.2.10, 2.11, 2.12 and 2.13 to establish that the application of the petitioners was heard by an officer namely Shri D.R.Shah and after his removal from the post another incumbent came who never afforded any opportunity of being heard to the petitioner-Company proceeded with the application and rejected the same ignoring the communications and material addressed by the petitioner-Company in support of their claim and which was also addressed to the new incumbent of the office namely Shri Bhasker Rao, who decided the matter without affording any opportunity of being heard to the petitioners.
6. Learned advocate for the petitioners, therefore, confined his submission qua patent irregularities in the process of decision making, as the said process was not found to be appropriate process and in order to justify his submission he relied upon the decision in case of M.D.gohil Vs. State of Gujarat reported in 1996(2) G.L.H. 213 as well as Apex Court decision in case of Gullapalli Nageswara Rao and Others Vs. A.P. State Road Transport Corporation and another, reported in AIR 1959 Supreme Court 308.
In both these judgments, if one looks at ratio it becomes clear that the officer or authority who is hearing the applicant has to decide the same. Change in the incumbent of the office would thus cast a duty upon the new incumbent of the office to afford an opportunity to the party concerned before proceeding with deciding the application.
7. In the instant case, as submitted by learned advocate for the petitioners, the hearing was completed by one Shri D.R.Shah who came to be replaced by Shri Bhasker Rao who never afforded any opportunity of hearing to the petitioners nor did he address himself to the contentions raised by the petitioners for claiming exemption from payment of electricity duty, as envisaged under Section 3 of the payment of Electricity Duty Act.
8. Learned advocate for the petitioners invited this Court's attention to the provision of Section 3 and the explanation thereunder and contended that the authority concerned was under obligation to record its clear finding qua the claim of exemption raised by the petitioners on account of its establishing altogether a new unit, which was eligible to be classified as new industrial undertaking. The cryptic order passed by the authority, impugned in this petition, is therefore otherwise also required to be quashed and set aside.
9. Learned AGP contended that the order impugned is assailable under the provision of appeal and the alternative remedy is not exhausted by the petitioners and therefore the petition is required to be dismissed in limine.
10. Learned AGP invited this Court's attention to the Government notification dated 11.08.1977 and relying thereupon submitted that the petitioners should have approached the State with appropriate appeal. If petitioners were aggrieved by the order impugned in this petition the Court may not take upon itself the task of examining the eligibility aspect in the writ petition under Article 226 of the Constitution of India.
11. Learned AGP further submitted that the provision of Section 3 of the Electricity Duty Act and explanation thereunder clearly provides for exemption qua the industries which are qualified to be fall thereunder. The present petitioner is an industry, which is existing, as could be seen from the averments made in the petition and therefore the order cannot be said to be in any manner illegal and/or improper, however, if the petitioners are aggrieved thereby they have to move the State by way of appeal.
12. At this stage learned AGP invited this Court's attention to the order made on Page No.72 produced by the petitioners dated 18.08.2008, which is said to be an order made by the then incumbent of the office rejecting the application and if the application was rejected by the then incumbent Shri D.R.Shah, then subsequent consideration and rejection would be of no avail to the petitioners. Thus, on this ground also petition is required to be dismissed.
13. Shri Premal R.Joshi, Learned advocate appearing for respondent no.3 contended that in fact the order produced at page 20 dated 27.08.2010, could not have been passed in view of the order dated 18.08.2008 which is produced at page 72, as there exists no power of review at all.
14. This Court has heard learned advocates appearing for the parties and perused the papers appended to the petition. The Court is of the considered view that the petition is required to be remanded back to the respondent no.1 for deciding the issue of petitioners' eligibility for obtaining certificate which will enable petitioners to claim exemption from payment of electricity duty for the following reasons namely;
(i) The petitioners' counsel is justified in placing reliance upon above mentioned two decisions, so far as the point of hearing is concerned. Admittedly, in this controversy it can well be said that the officer who passed an order on 27.08.2010 has not heard the petitioners at all, therefore, the officer who heard the petitioners and who passed the order which is produced at page 72 is only the officer who had afforded an opportunity of being heard.
(ii) The judgment and ratio thereunder would be applicable to the facts and circumstances of the present case also. Now, this brings the Court to consider the submission raised by Shri Joshi in respect of non availability of the power to review the order. The question arises as to whether the order dated 27.08.2010 could be classified to be an order of review. The answer would be emphatically 'No', as had it been a review, then the order itself would have been eloquently clear, which would reveal the mind of the authority that it was consciously deciding the matter while exercising the power of review which may not be readily available looking to the provision of the Act in question. The Court hasten to add here that the Court has not opined upon the power of review at all, so far as this controversy is concerned, as the Court is only to examine whether the authority while examining the claim of the petitioners for seeking certificate for claiming exemption from payment of electricity duty is justified in passing the order impugned.
(iii) The order at page-72, passed by the same officer i.e. Shri D.R.Shah, is also an order which does not disclose as to how and on what ground the application of the petitioners is rejected. That order, if assume to be the order holding the field today also and the subsequent order of 27.08.2010 is treated to be an order not tenable in the eye of law or not required to be passed, then also the order of 27.08.2010 is an order which also does not disclose anywhere as to how and on what ground the exemption application is rejected. In fact the provision of Section 3 read with Schedule and the provision of appeal provided thereunder against the order declaring exemption certificate itself would make it clear that the authority passing the order in the first instance is under obligation to disclose its mind by addressing itself to the issues raised in the exemption application. The Appellate Authority would be deprived of the reasoning for rejecting the application, therefore, the authority against whose appeal is provided, is under obligation to pass reasoned order addressing itself to the issues and grounds raised by the applicant for seeking exemption certificate.
(iv) The Court is of the considered view that looking to the provisions as aforesaid there cannot be any two opinion that the entire procedure of deciding the exemption application is a procedure which is required to be followed after following due procedure of law and also observing principle of natural justice. The principle of natural justice is required to be followed and when the authority is passing the order, the order should reflect the application of mind on the part of the authority and the authority is therefore under obligation to deal with the contentions and grounds raised by the applicant for seeking exemption.
(v) In view of the aforesaid test laid down, now if the Court examines the two orders namely the order dated 18.08.2008 as well as order dated 27.08.2010, both orders cannot pass the test of reasonability and hence in my view they are not capable of being sustained under this proceeding. The Court hasten to add here that the Court has not opined on merits of the matter nor has Court opined in respect of the submission with regard to the review or power of review but as the subsequent order also is silent qua the earlier order, the Court has examined both the orders from the test of reasonability and the Court is satisfied about the factum of patent lacking in the order and therefore the order deserve to be quashed and set aside. The matter is remanded back to respondent no.1 for deciding the application dated 09.01.2008 afresh in light of the submission that may be made by the petitioners. The petitioners are to be given opportunity of being heard and reasoned order is required to be passed.
15. With this observation, the application is partly allowed. Rule made absolute to the aforesaid extent.
16. At this stage, learned advocate for the petitioners requested that let there be a time frame given to the authority for deciding the application. The request is not objected, however, it was submitted by learned advocates for the respondents that sufficient time will be granted and the petitioners be called upon to cooperate in the hearing.
17. The entire procedure of deciding the application afresh be completed as early as possible, preferably within a period of 65 days from the date of receipt of this order. It goes without saying that the authority i.e. respondent no.1 is at absolute liberty to decide the matter without being influenced by this order in any manner but strictly in accordance with law and after giving full opportunity of hearing to the petitioners.
18. Direct service is permitted.
(S.R.BRAHMBHATT, J.)
Pankaj