BANWARI LAL JHUNJHUNWALA Vs. UNION OF INDIA

JUDGEMENT

(1.) One of the contentions raised in this petition under Article 226 of the Constitution is that the show cause notice dated September 30, 1986 and the addendam thereto dated March 17, 1987 both issued by respondent No. 4 for the alleged contravention of the Act and the Rules is bad, as ex-facie, there is no jurisdiction to issue the said show cause notice and the addendam thereto to the petitioners who was in no way connected with Duncan Agro Companies Ltd. during the relevant period and thus there was no liability whatsoever under the Act or the Rules as alleged in the said show cause notice.

(2.) The allegations made in the show cause notice are that it appears from the facts and circumstances of the case as stated in the statement of facts enclosed that the said manufacturers, Directors and Senior Executives of the companies listed thereafter in the show cause notice, have been evading large amounts of excise duty leviable on cigarettes and thereby contravened the provisions of Rules 9(1), 52, 52A, 53 and 225 of the Central Excise Rules, 1944 inasmuch as :

(3.) Further allegations are made that the said manufacturers, inter alia, Shri B.L. Jhunjhunwala had suppressed the facts relating to the assessable values with intent to evade duty and, therefore, it appears that the extended period of five years can be invoked in this case for demanding duty. The show cause notice is issued as to why penalty should not be imposed on them under the provisions of Rules 9(2), 52(A) (5), 210 and 226 of the Central Excise Rules, 1944 . In the counter-affidavit, it is admitted that the petitioner Shri B.L. Jhunjhunwala joined the service of M/s. Duncan Agro Industries Ltd. on April 1, 1984 as Senior Manager (Finance). The show cause notice has been issued for the period September, 1981 to February, 1983. It is further stated in the counter-affidavit that the petitioner was a Senior Executive prior to April 1, 1984 in a front company of M/s. Duncan Agro Industries Ltd. with Tabac Traders Pvt. Ltd. The stand taken in the counter-affidavit is that the petitioner is liable as alleged in the show cause notice because he was involved in the violation of the provisions of the Act and the Rules by the Company even prior to that date as he was a Senior Executive of front company wholly owned by M/s. Duncan Agro Industries Ltd. and, therefore, he was directly connected.