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Smart Summary

Factual and Procedural Background

The case involves two writ petitions (No. 1134 of 2009 on the original side and No. 9492 of 2009 on the appellate side) concerning common factual and legal issues. The petitioner, Mundra Salt & Chemical Industries, challenged an order dated 4 June 2009 passed by the Collector, Mumbai Suburban District, directing payment of non-agricultural assessment charges following the cancellation of the petitioner’s salt manufacturing licence by the Salt Department of the Government of India. Additionally, the petitioner challenged recovery notices dated 20 January 2007, 29 June 2009, and 28 October 2009 issued by the revenue department of the Thane Collectorate demanding payment of non-agricultural assessment charges on land used for salt manufacturing from the date of licence cancellation.

Previously, in Writ Petition No. 1658 of 2008, this Court had directed that the petitioner be heard regarding liability to pay land revenue, and the Collector subsequently passed the impugned order dated 4 June 2009. The Court admitted the writ petition on 22 September 2009, passing an interim order including payment of a substantial sum and furnishing a bank guarantee, with a stay on action based on the 4 June 2009 order pending final disposal.

After adjournment for further instructions, the Collector expressed intent to withdraw the impugned order and issue a fresh show cause notice to the petitioner, allowing a fresh adjudication process involving the petitioner and the Salt Department of the Government of India.

Legal Issues Presented

  1. Whether the petitioner is liable to pay non-agricultural assessment charges from the date of cancellation of the salt manufacturing licence.
  2. Whether the impugned order dated 4 June 2009 directing payment of such charges is sustainable.
  3. The procedural propriety of issuing recovery notices demanding payment of non-agricultural assessment charges for the land used for salt manufacturing.
  4. The validity and effect of interim relief granted pending final adjudication of the petitioner’s liability.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Court recognized that the issues involved complex factual and legal questions regarding the petitioner’s liability for non-agricultural assessment charges following the cancellation of its salt manufacturing licence. The Court noted that the Collector’s impugned order of 4 June 2009 was susceptible to reconsideration. The Collector’s proposal to withdraw the order and issue a fresh show cause notice, allowing the petitioner and the Salt Department of the Government of India to be heard, was accepted as a fair and appropriate course of action. The Court directed adherence to a clear procedural timeline for issuance of the show cause notice, submission of replies, and passing of a fresh reasoned order. The interim order previously granted was to remain in effect until the fresh adjudication was completed and for a short period thereafter. The Court also indicated that similar procedural steps should be followed in respect of the recovery notices issued by the Thane Collectorate, allowing for common adjudication by a single authority.

Holding and Implications

The petitions are disposed of on the terms that the impugned order dated 4 June 2009 be withdrawn and a fresh show cause notice be issued and adjudicated in accordance with law.

The interim order dated 22 September 2009 remains in operation until the fresh show cause notice is decided and for fifteen days thereafter. The recovery notices issued by the Thane Collectorate also stand set aside subject to fresh proceedings. No costs were awarded. The Court expressly kept all contentions on the merits open, indicating that no final determination on the substantive issues was made at this stage. This decision affects the procedure to be followed by the Collector and the petitioner’s immediate obligations but does not establish new legal precedent.

    Mundra Salt & Chemical Industries v. Collector

    G.S. Kulkarni, J.:— Writ petition no. 1134 of 2009 filed on the original side and Writ Petition no. 9492 of 2009 filed on the appellate side involve common issues of facts and law.

    2. Challenge in the writ petition no. 1134 of 2009 as filed on the original side is to the order dated 4 June 2009 passed by the Collector, Mumbai Suburban District whereby the petitioner-Mundra Salt & Chemical Industries has been directed, to pay the non agricultural assessment charges, with effect from the date the Salt Department of the Government Government of India canceling the licence of the petitioner, to manufacture salt on the land in question.

    3. Challenge in the petition as filed on the appellate side is to the recovery notices which are dated 20 January 2007, 29 June 2009 and 28 October 2009 issued by the concerned revenue department, Thane Collectorate, demanding payment of non-agricultural assessment charges in respect of land which was also used by the petitioner for manufacturing of salt, being levied from the date the petitioner's licence to manufacture salt was cancelled by the Salt Department of the Government of India.

    4. The petitioner had earlier approached this court in Writ Petition no. 1658 of 2008 (Original side) when this Court by an order dated 24 September 2008 directed that the petitioners be given hearing. This Court had passed the following order:—

    “The learned A.G.P. states that the respondents will given hearing to the petitioner as regard their liability to pay land revenue. The Authority will also hear the Commissioner. The respondents shall proceed with the notice only if they pass an order to the effect that prima facie they have authority to issue notice and the petitioners are liable therefor. In this view of the matter nothing survives in the petition. Hearing shall take place at the office of Collector, Mumbai on 13.10.2008.”

    5. Accordingly the Collector, Mumbai Suburban District has passed the impugned order dated 4 June 2009 as assailed in the original side-writ petition, filed by the petitioner-Mundra Salt and Chemicals Industries.

    6. This Court heard the Writ Petition (O.S.) for admission on 22 September 2009 and while admitting the petition following interim order was passed:—

    “1. Rule. Respondents waive service.

    2. By agreement of the parties pending the hearing and final disposal of the writ petition, parties have agreed to the following interim order:

    i) The petitioners shall pay an amount of Rs. 1,28,85,000/- (Rupees one crore twenty eight lacs, eighty five thousand) to the respondent no. 2 on or before 3 November, 2009. The Respondent no. 2 shall bring back the amount so deposited by the petitioner on such terms and conditions as ordered by this Court.

    ii) The petitioners shall also furnish a bank guarantee of a Nationalised Bank to the satisfaction of the Prothonotary and Senior Master, High Court, Bombay to the tune of Rs. 1,24,57,603/- (Rupees One crore twenty four lacs fifty seven thousand six hundred and three) on or before 3 November, 2009 initially for a period of two years and thereafter renewed from time to time until further orders passed by this Court.

    iii) In view of the petitioners agreeing to what is stated in clauses (i) and (ii) above the respondents shall not take any action on the order dated 4 June, 2009 passed by respondent no. 1.

    iv) This order will in no way preclude the respondents from initiating appropriate proceedings against the buyers of a part of the petitioners property under an agreement dated 6 November, 2007.

    6 In view of the fact that the pleadings in the writ petition are complete, the hearing of the writ petition is peremptorily fixed on 4 December, 2009.”

    7. Thereafter, the petition was taken up for final hearing prior to the winter vacation 2018 when the hearing of these petitions was adjourned as the learned AGP's appearing in these petitions fairly submitted that they would seek instructions considering the broader canvass of the issues falling for consideration of this Court in these petitions.

    8. Today Mr. Mattos, learned AGP on the instructions would submit that the respondent no. 1 - Collector intends to withdraw the impugned order dated 4 June 2009 with liberty to issue a fresh show cause notice to the petitioner and decide the said show cause notice after hearing the petitioner and the Salt Department of the Government of India, and pass a fresh order in accordance with law.

    9. This suggestion of the Collector, Mumbai Suburban District is a fair course of action. Accordingly, the Collector, Mumbai Suburban District is permitted to withdraw the impugned order dated 4 June 2009 with liberty to issue a fresh show cause notice, which be issued within a period of four weeks from today. The petitioner shall file its reply to the show cause notice within a period of four weeks from receipt of show cause notice. The Salt Department of the Government of India may also place on record its submissions, if it so desires. The Collector shall grant an opportunity of personal hearing to the petitioner as also hear the representatives of the Salt Department, Government of India and pass a fresh reasoned order in accordance with law, within a period of five months from today. Ordered accordingly.

    10. Mr. Mattos at this stage submits that till the above exercise of issuance of fresh show cause notice and its adjudication is undertaken, the interim order dated 22 September 2009 as passed by this Court be permitted to remain in operation. It would be in the interest of justice that the ad-interim order as passed in this petition shall remain in operation till the fresh show cause notice to be issued is decided and for a period of fifteen days from the date of communication of the order as would be passed on the show cause notice by the Collector.

    11. In regard to the petition as filed on the Appellate side, the Collector, Thane, may also issue a similar show cause notice and the adjudication of the said show cause notice also can be undertake by a common authority/Collector by adhering to the same procedure as directed. The notices as impugned in this petition, therefore, also do not survive.

    12. The petitions are accordingly disposed of in the above terms. No costs.

    13. All contentions of the parties on merits of the disputes are expressly kept open.

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    Mundra Salt & Chemical Industries v. Collector
    (Feb 8, 2019)