JAGSON AIRLINES LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) This order will govern the disposal of CWP Nos. 2665/96 & 1087/96.

(2.) Jagson Airlines Ltd., a Public Limited Company carrying business as scheduled private airlines in India, filed CW No. 2665/96, inter alia, alleging that on 19th October, 1994, Assistant Commissioner of Customs, respondent No. 3 issued notice stating that as per the IATT return, the petitioner had collected a sum of Rs. l,72,166.00 as Inland air travel tax during the month of November, 1993 but had made only part payment leaving a balance of Rs. 90,000.00 . Petitioner was called upon to show cause why the said outstanding amount together with Inland air travel tax collected during the period December, 1993 to July, 1994 computed on the basis of highest paid sector operated by the petitioner be not recovered and interest charged and penalty imposed. Respondent No. 3 further issued corrigendum to the said notice calling upon the petitioner to show cause why interest amounting to Rs. 3,40,236.00 be not demanded under Section 43A(1) and penalty imposed under Section 46(3) of the Finance Act, 1989 as amended by Section 98 of the Finance Act, 1994. The impugned demand of interest and proposed imposition of penalty was contested by filing objections on a number of grounds by the petitioner before respondent No. 3. However, respondent No. 3 arbitrarily dismissed the objections by the order dated 22nd/23rd August, 1995 confirming the demand of Rs. 3,40,236.00 towards interest and imposed penalty amounting to Rs. 8,00,000.00 upon the petitioner. Feeling aggrieved, the petitioner filed an appeal before the Commissioner of Customs (Appeals), New Delhi, respondent No. 2. By the order dated 31stJanuary,1996 respondent No. 2 declined to interfere in the order dated 22nd/23rd August, 1995. Petitioner thereafter filed a revision petition before the Joint Secretary, Government of India, Ministry of Finance, Department of Revenue, New Delhi on 21st March, 1996 which too was dismissed by the order dated 31st May, 1996. Petitioner-Company seeks to challenge the aforesaid three, orders by filing the present petition on the grounds set out in para No. 13 of the petition.

(3.) In CW No. 1087/96 Skyline NEPC Limited (petitioner No. 1) is also a Public Limited Company carrying business as scheduled private airlines within India. It is, inter alia, alleged in the petition that pursuant to the notice dated 2nd February, 1996issued by the Assistant Commissioner of Customs, respondent No-3, petitioner No. I handed over cheque No. 420530 dated 10th February, 1996 for Rs. 1,96,89,951 .00 drawn on Canara Bank, Saidapet, Madras in favour of respondent No. 2 with the request to respondents 2 & 3 to present the same in the last week of February, 1996 for encashment to which they agreed. However, contrary to the agreement respondents 2 & 3 presented the said cheque on 10th February, 1996 for the reasons best known to them and the cheque was returned dishonoured. On receiving information about the dishonour of the cheque the petitioners contacted the said respondents and requested for extention of time till 29th February, 1996 to deposit the amount due under the cheque which was allowed. Suddenly on 22nd February, 1996 petitioner No. 1 received a legal notice dated 15th February, 1996 from Mr. Madan Lokur, Advocate on behalf of respondent No. 2 wherein it was stated that if the amount of Rs. 1,91,89,991 .00 was not received by respondent No. 2 within a period of 15 days from the date of the receipt of the notice, respondent No. 2 shall be constrained to take suitable action against the petitioners. After receiving the said notice petitioner No. 1 made arrangements to pay the amount due on or before 29th February, 1996. However, on 23rd February, 1996 at 11.00 p.m. when the aircraft of petitioner No. 1 viz. Boeing 200-VI-PDB with SI. No. 22416 landed at Delhi Airport, respondents 2 & 3 detained the same without giving any prior intimation to petitioner No. 1 by issuing an order dated 23rd February, 1996 bearing Ref. C. No. VIII (PLM) IATT/DAM/39/96 enclosing Herewith detention memo dated 23rd February, 1996. Said order revealed that the non-payment of the amount due towards Inland air travel tax was basis for detaining the aircraft. Petitioner No. 1 on 24th February, 1996 deposited a sum of Rs. 1,90,89,991.00 by a Bank draft in the account of respondent No. 3 whereupon the aircraft was released by respondent No. 3 on 24th February, 1996 itself. It is further alleged that on 27th February, 1996 petitioner No. 1 received notice dated 23rd February, 1996 calling upon it to show cause why interest @ 20% per annum and penalty be not imposed on it. The total amount of interest sought to be levied on petitioner No. 1 as shown in the notice was Rs. 48,90,000.00 for the period January, 1995 to November, 1995. Petitioners have impugned the said notice by filing this petition on the grounds noted in para No. 26 of the petition.