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Union Of India And Others v. Tata Engineering & Locomotive Co. Ltd.
Factual and Procedural Background
The Union of India filed an appeal to the Supreme Court challenging a Patna High Court judgment that had:
- Directed the Assistant Collector of Central Excise, Jamshedpur, to pass final orders on all price lists submitted by Tata Engineering and Locomotive Co. (TELCO) without delay.
- Held that the price at which TELCO sold vehicles at its Jamshedpur factory gate constituted the “normal price” for assessing excisable value.
- Limited the Assistant Collector to calling only documents it deemed relevant, expressly ruling that price lists from TELCO’s Regional Sales Offices (RSOs) were not relevant.
The Supreme Court granted leave to appeal, heard the matter, and issued the present order.
Legal Issues Presented
- Whether the High Court was correct in entertaining a writ petition that controlled the mode and manner of an ongoing excise assessment.
- Whether the Assistant Collector has the authority to examine Regional Sales Office price lists when determining the assessable value of excisable goods.
Arguments of the Parties
Appellant (Union of India)
- Contended that examination of RSO prices was necessary because two different prices were being charged at the factory gate.
- Argued that the Assistant Collector must retain full discretion to call for any documents he considers relevant for the assessment.
Respondent (TELCO)
- Asserted that most sales were to dealers, with only a small number directly to sub-dealers, and full particulars for those transactions had been provided.
- Claimed the issue of RSO price examination had not been raised before the High Court.
- Through counsel Mr. Sorabjee, complained that assessments were proceeding endlessly and without regard to an earlier Patna High Court judgment on the same issues.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The Supreme Court concluded that the High Court should not have intervened in the assessment process. Key points of the Court’s analysis include:
- The Assistant Collector is empowered to complete assessments according to his judgment and understanding of law and fact, including calling for and examining any documents he deems relevant.
- Courts should not dictate the specific mode or manner of an assessment; if the Assistant Collector believes enquiries into RSO prices are necessary, the judiciary cannot prevent such enquiries.
- The assessee has adequate statutory remedies—appeal and revision—if dissatisfied with the assessment outcome, including any alleged failure to follow previous High Court or Supreme Court judgments.
- Given these safeguards, the High Court’s writ jurisdiction was improperly invoked to control the ongoing assessment.
Holding and Implications
Holding: The Supreme Court allowed the appeal, set aside the Patna High Court’s judgment, and directed the Assistant Collector to complete the assessment as expeditiously as possible. No order as to costs.
Implications: The decision restores the Assistant Collector’s full discretion in conducting excise assessments and underscores that High Courts should not interfere with the assessment process where statutory remedies exist. No new legal precedent was established beyond reaffirming this principle.
Order
1. Leave granted.
2. Union of India has come up in appeal against the judgment and order of the Division Bench of the Patna High Court directing the Assistant Collector of Central Excise, Jamshedpur, to pass without delay appropriate final order on all the price lists already submitted by the Company. The Court also held that the price at which the Company sold the vehicles at the factory gate at Jamshedpur should be the normal price for the purpose of computation of the value of the excisable goods. The Court also held that the Assistant Collector of Central Excise could only call for relevant documents for the purpose of assessment of the value of the excisable goods. In the facts of this case, price lists of Regional Sales Offices of Tata Engineering and Locomotive Co. (TELCO) could not be said to be relevant for passing final orders on the price lists submitted by the Company.
3. The appellant has contended that it was necessary for the Excise Officer to examine the price at the Regional Sales Offices because two types of prices were being charged at the factory gate of the Company at Jamshedpur. It has been contended in reply that the bulk of the sales made by the Company was to the dealers; a small portion of sales was effected to sub-dealers directly for which full particulars were furnished. Moreover, this point was not raised before the High Court when the writ petition was heard.
4. In our view, this petition should not have been entertained by the High Court at all. The Assistant Collector is entitled to complete the assessment as he thinks fit in exercise of his judgment and according to his understanding of the law and facts. For this purpose, he can call for and examine whatever documents he considers relevant. If the Assistant Collector fails to follow any judgment of the High Court or this Court, the assessee had adequate statutory remedies by way of an appeal and revision against the assessment order. The Court should not try to control the mode and manner in which an assessment should be made. If the Assistant Collector is of the view that enquiries are necessary to be made as to the price at which trucks were sold at the Regional Sales Offices, the Court cannot stop him from making such enquiries.
5. Mr Sorabjee, appearing on behalf of the respondents, has complained that the assessments are going on endlessly and without due regard to an earlier judgment of the Patna High Court in respect of an earlier assessment year on the very same issues. Whether the controversy raised in this case is covered by an earlier judgment of the High Court is a matter to be decided by the Assistant Collector. He will have to decide all questions of fact and law. He has to make whatever enquiries he thinks necessary for determination of the value of excisable goods. The High Court in exercise of its jurisdiction cannot give guidance to the Assistant Collector about the manner and mode in which the assessment should be made.
6. We are of the view that the High Court was in error in entertaining this writ petition. Therefore, the appeal is allowed and the judgment of the High Court under appeal is set aside. There will be no order as to costs.
7. The Assistant Collector is directed to complete the assessment as expeditiously as possible.
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