PHOENIX MILLS LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioners are a public limited company carrying on business of manufacture and sale of cotton fabrics, man-made fabrics and yarn in Bombay. The petitioners were served with three show cause notices by the Superintendent of Central Excise, Bombay on November 25, 1975, May 25, 1977 and October 27, 1977 to show cause why certain amounts should not be recovered from the petitioners, being the amounts short-levied on the clearance of the goods during the period prior to the service of show cause notice. The Government of Maharashtra by notification dated January 4, 1979 declared the petitioner-company as relief undertaking within the meaning of the Bombay Relief Undertakings (Special Provisions) Act, 1958. By the said notification, the company was given protection for the period of one year from January 4, 1979 in respect of any remedy for enforcement of right, privilege, obligation or liability in favour of any creditor except liability to the workmen, to the Government of Maharashtra and to the nationalised banks.

(2.) The three demand notices issued by the Excise Officer were heard and confirmed on August 8, 1984 and September 24, 1984 respectively. The petitioners preferred appeals against the impugned orders and they and pending before the Collector of Central Excise. The petitioners preferred applications before the Collector for the stay of enforcement of the order of the Superintendent of Central Excise, but these applications were turned down and that has given rise to the filing of the present petition on March 13, 1985.

(3.) On the date of filing of the petition, the notification issued by the Government of Maharashtra renewed for period up to May 3, 1985, was in force but subsequent to that date, a fresh notification has been issued giving protection to the company up to May 3, 1986. Shri Suvarna, learned counsel appearing on behalf of the petitioners, submitted that in view of the notification issued by the Government of Maharashtra, it is necessary to direct the excise authorities not to enforce the demand till the notification is in operation. The submission of the learned counsel is correct and deserves acceptance. The remedy of enforcement of any right against the company has been suspended till May 3, 1986 and consequently the recovery of excise dues cannot be enforced. The protection is given in respect of liabilities accruing before January 4, 1979 and it is not in disput that all the three show cause notices were in respect of the period earlier than that day. In my judgment, the petitioners, therefore, are entitled to the reliefs sought.