<NAME>, J.

1. These are two appeals for which the appellant, Mrs., <NAME>, obtained special leave from His Majesty in Council against two decisions of <ORG> at Madras.

2. They arise in the following circumstances :There are in India two legislative Acts of the Governor-General of India in Council relating to printing, one being The Printing Presses and Newspapers Act No. XXV of 1S67. and the other being Act No. I of 1910 entitled " An Act to provide for the better control of the Press, " and shortly " The Indian Press Act, 1910. " Under the first Act, Section 4 , the person who keeps in his possession a printing press must make and subscribe a declaration before a Magistrate, stating that he has a press for printing, and where it is situated. And by Section 5 no printed periodical work containing public news, or comments on public news, shall be published without the printer and publisher making a declaration stating that he is the printer or publisher, the name of the periodical and the place where the printing or publishing is conducted.

3. Under the second Act, Section 3 , Sub- section 1 , the person making the declaration is required to deposit before a Magistrate in money, or in certain securities, a sum not being leas than Rs. 500, or more than Rs. 2,000, as the Magistrate may think fit to require.

4. But the Magistrate may, for special reasons which ho is to record, dispense with the deposit, and he has certain powers of canceling or varying any order made under this sub-section.

5. By Section 4 of the Act the local Government, when it appears to it that any printing press in respect of which any security has been deposited, is used for the purpose of printing any newspaper which contains words, signs or visible representations of a nature deemed to be objectionable under the detailed provisions of the section which will be hereinafter specifically set forth, may by notice in writing addressed to the keeper of the press, declare the security and all copies of the newspaper wherever found forfeited to His Majesty, and after the expiry of ten days from the date of the issue of the notice of forfeiture, the declaration required of every keeper of a press is to be deemed to be annulled,

6. By Section 17 :

Any person having an interest in any property in respect of which an order of forfeiture has been made under Section 4 " ...[or under certain other sections not material to the present Appeal] "may, within two months from the date of such order, apply to <ORG> to set aside such order on the ground that the newspaper...in respect of which the order was made did not contain any words, signs, or visible representations of the nature described in Section 4 , Sub- section 1 .

7. And by Section 18 :

Every such application shall be heard and determined by a Special Bench of <ORG> composed of throe Judges....

8. By Section 23 , anyone who keeps in his possession a press without making a deposit under Section 3 when required so to do, shall be liable to the same penalty as if he had failed to make the declaration required by the first Act.

9. On the 2nd December, 1914, the appellant being the owner and keeper of a printing press, and printer and publisher of a newspaper called at that time, and thereafter, "New India," made the declaration required of her under the Act of 1867, and the Magistrate before whom it was made using the power of dispensation given to him by Section 3 of the Act of 1910, thought fit to dispense with the deposit of the security which under the provisions of the same section she would otherwise have had to give. The document in which the dispensation was embodied is not contained in the record of these appeals, and their Lordships have not before them the reasons which the Magistrate recorded as the grounds for granting this dispensation.

10. On the 28th May, 1916, the appellant received a notice from the Magistrate dated the 22nd May, in which it was stated that he, under Sub-section 1 of Section 3, cancelled the order dispensing with the security and required her within fourteen days to deposit Rs. 2,000 as security.

11. In accordance with this order the appellant, under protest, as she says in one of her affidavits, deposited the security.

12. On the 28th August, 1916, she was served with an order dated the 25th August and made by the Governor in Council reciting that twenty passages published in the newspaper and identified in the order were of the nature described in Sub-section 1 of Section 4 of the Act of 1910, and declaring that the security which the appellant had deposited and all copies of " New India" wherever found were to be forfeited to the <ORG>.

13. The appellant thereupon purporting to avail herself of the provisions of Section 17 of the Act presented her petition to a Special Bench of <ORG> at Madras praying that both the order of the Magistrate requiring security and the order of the Governor in Council should be revised and set aside. It being, however, obvious that the procedure under Section 17 was not available for questioning any act of the Magistrate, the appellant the next day presented what is called a Criminal Revision Petition under Sections 106 and 107 of the Government of India Act (5 & 6 Geo. V. c. 61) and Section 435 of the Code of Criminal Procedure. This application, also described in the course of the proceedings as an application for a certiorari, was also heard by the Special Bench.

14. After argument, both applications were refused; all the Judges agreeing that they should be refused, but not being in agreement as to the grounds on which the revision petition failed, and not being wholly in agreement as to all the articles in the newspaper which might merit condemnation.

15. The petitioner thereupon applied to <ORG> for leave to appeal in both cases, and on this leave being refused by <ORG> applied to His Majesty in Council for special leave to appeal, and this leave having been given (as already stated) in respect of both orders, both matters are now before their Lordships.

16. It will be convenient to consider first the application to quash the order of the Magistrate. This question divides itself into two parts: was the procedure adopted a competent and suitable method of reviewing the order, and if it be open to review is it to be deemed an illegal and unwarranted order ?

17. It is convenient to consider first the nature of the order, or supposed order. The Statute contemplates that in ordinary cases security shall be deposited, and the only duty of the Magistrate is to fix the amount, having regard to the two limits, and to receive it.

18. Then follows the proviso :

Provided that the Magistrate may, if he thinks fit, for special reasons to be recorded by him, dispense with the deposit of any security or may from time to time cancel or vary any order under tins Sub-section.

19. It was contended before their Lordships that to read this proviso as enabling the Magistrate to cancel or vary an order of dispensation would be to make a proviso upon a proviso, and to collect a positive enactment out of that which was only a qualifying provision. But it is well settled that there is no magic in words of proviso, and that the plain meaning must be given to the words of the legislature, and those words enable the Magistrate to cancel or vary any order made under the sub-section, which should mean among other orders of dispensation.

20. If the Magistrate having fixed the minimum security may vary his order by imposing the maximum, there is no reason why he should not, as time goes on, think fit to require security when at first he thought fit to require none. Under the second sub-section a power of requiring a deposit, where none up to that moment had been required, is given in certain cases to the local Government, and it is natural to suppose that what the local Government may do in a proper case under Sub- Section 2 , may be done in a proper case by the Magistrate under Sub- section 1 . It is somewhat difficult to find any case, other than this one, to which the word cancel would be properly applicable. If the normal course is adopted, and a deposit is required, and if the Magistrate thereafter thinks it too much or too little, the appropriate word for the now order is that it is one varying the old. But if he were to cancel simpliciter liciter an order fixing the deposit at a particular sum, it is difficult to see what would happen. There must be a deposit unless there is a positive order of dispensation; the canceling of an order fixing the deposit at say Rs. 2,000, would leave the keeper of the printing press in the position of having to apply to the Magistrate to make some further order, either fixing a new sum or dispensing with any; and till such new order had been made and complied with, the Keeping of the printing press would apparently be an unlawful act, so that the cancellation of the order fixing the deposit at Rs. 2,000 would be injurious instead of beneficent to the keeper of the press. But if the Magistrate had originally thought fit to dispense with security and afterwards changed his mind, the right phrase to use would be that he had cancelled his order of dispensation.

21. Their Lordships are, therefore, of opinion that the Magistrate has power under the section to cancel an order of dispensation, the necessary consequence of which will be that security will have to be deposited according to the amount thereupon fixed by him within the limits prescribed, as would be done in normal course on the first making of a declaration.

22. Their Lordships are in agreement in this respect with the opinion of <NAME>, and in disagreement with the view of <NAME> The Officiating Chief Justice, <NAME> agreed in principle with <NAME> and so expressed himself in his judgment upon the other application.

23. It is next contended on behalf of the appellant that the act of the Magistrate in canceling the dispensation was a judicial order, and was bad, because she was given no opportunity of being heard before an adverse order was made against her.

24. To this argument several answers have been given ; that the order might be treated as an ex parte order which it would have been open to her to move to discharge instead of complying with it as she did under protest; that as a judicial order it was still one made by the Magistrate within the exercise of his jurisdiction, and that the omission to hear her was only an irregularity which could not be reviewed, or at any rate could not be reviewed by process of certiorari; and lastly, that the act was not a judicial act but one done in the exercise of administrative functions.

25. It was on this last ground that all three Judges in <ORG> decided the point against the appellant; and without pronouncing any opinion on the other grounds their Lordships agree that this one furnishes a sufficient answer.

26. The Magistrates to whom this power is entrusted by the Act are the District Magistrates and the Chief Presidency Magistrates. Those to whom power was entrusted by the Act of 1867 were "any person exercising the full powers of a Magistrate," and were to include "Magistrates of Police and Justices of the Peace." At that time there were no Chief Presidency Magistrates.

27. It was argued before their Lordships that the change in the second Act, that is in especial the substitution of the Chief Presidency Magistrate for territory within his jurisdiction, showed an intention on the part of the <ORG> to make the action of the Magistrate judicial and not administrative. But their* Lordships do not think that this change alters the nature or character of the action of the Magistrate. It is true that the duties of the Chief Presidency Magistrate are primarily judicial; but the Magistrates outside the Presidency town exercise both judicial and administrative functions, and the District Magistrate is principally an administrative officer. These two considerations appear to balance one another. The action of the Magistrate under Sub-section 1 of Section 3 is (like the action of the Magistrate under Sub-section 1 of Section 8) analogous to the action of the local Government under the second sub-section in the same clauses, and the action of the local Government is clearly administrative.

28. It being once established that the normal course is to have a deposit, the action of the Magistrate in increasing or diminishing, withdrawing or imposing, is a pure matter of administrative discretion. It is only in one case that he is to record his reasons and that is when there is a departure from the normal, and the object of recording them is, as the Officiating Chief Justice rightly said, for the information of his superiors in the <ORG>.

29. Further, in this connection the provisions of Section 22 , upon which comment will shortly be made, must not be left out of sight. If a declaration of forfeiture by the local Government can only be questioned in one respect and by one methodit is not unreasonable to suppose that the legislature did not intend to open <ORG> to enquiries as to the exercise of so comparatively unimportant an official act, discretionary and in some respect facultative as it is.

30. The act of the Magistrate is after all only the withdrawal of a privilege which need never have been granted. It is not like a condemnation in which case justice requires that the person to be condemned should first be heard. It would have been in their Lordships' opinion more discreet, and it would have removed an occasion for comment and complaint, if the Magistrate had given the appellant some opportunity for making her observations before the privilege was withdrawn ; it might have been a wiser discharge of his duty as an officer. But having said this, their Lordships are unable to go any further.

31. It results, therefore, that if the order of the Magistrate was open to examination, either upon process of certiorari or by a way of revision, the consequence of an examination would be to leave the order as it stands; and this consequence is not without its bearing upon the question, which is prior in order of reasoning, whether it was competent to the <ORG> to enter upon any such examination. The appellant based her demand partly upon the Code of Criminal Procedure and partly upon the supposed common law power to grant a writ of certiorari. She did not rely upon the power of revision given by the Code of Civil Procedure.

32. It is not easy to gee how these proceedings could be deemed criminal proceedings within the Code of Criminal Procedure, They are not proceedings against the appellant as charged with an offence. They are at the utmost proceedings which rendered the appellant if she should thereafter commit a criminal or forbidden act, open to a particular form of procedure for a penalty.

33. In any view, as their Lordships have intimated their opinion that the Magistrate in withdrawing the order of dispensation was not acting judicially, it follows that this is not a case for revision under the Code of Criminal Procedure.

34. As to certiorari it was contended on behalf of the respondent in <ORG>, that there is no power in <ORG> to issue a writ of certiorari, or alternatively that the provisions of Section 22 forbid recourse to this writ in cases which come under the Press Act .

35. As to the first point it would seem that at any rate the there <ORG> of Calcutta, Madras and Bombay, possessed the power of issuing this writ: Section 71 re the Justices of the Supreme Court of Judicature at Bombay(1829) 1 Knapp. 1, 49, 51, 55; and <CITATION> for the Town of Calcutta (1885) I.L.R. 11 Cal 275 Whether any of the other Courts which are by definition <ORG> for purposes of this Act have the power to issue writs of certiorari is another question.

36. Supposing that this power once existed, has it been taken away by the two codes of procedure? No doubt these codes provide for most cases a much more convenient remedy. But their Lordships are not disposed to think that the provisions of Section 435 of the Criminal Procedure Code and Section 115 of the Civil Procedure Code of 1908 are exhaustive. Their Lordships can imagine cases, though rare ones, which may not fall under either of these sections. For such cases their Lordships do not think that the powers of the High Courts which have inherited the ordinary or extraordinary jurisdiction of <ORG>, to issue writs of certiorari can be said to have been taken away.

37. But assuming that the power to issue the writ remains, and that it might be exercised notwithstanding the existence of procedure by way of revision, Section 22 has still to be considered.

22. Every declaration of forfeiture purporting to be made under this Act. shall, as against all persons, be conclusive evidence that the forfeiture therein referred to has taken place, and no proceeding purporting to be taken order this Act shall be called in question by any Court, except <ORG> on such application as aforesaid, and no civil or criminal proceeding, except as provided by this Act, shall be instituted against any person for anything done or in good faith intended to be done under this Act.

38. As to this section it was contended on behalf of the appellant that as the writ of certiorari was not in terms said to be taken away the right to it remained, notwithstanding the very express but still general words of this section.

39. However that might be according to English Law where there is no such revision procedure as in India, their Lordships see no reason for narrowing the express words of the Indian Act . Certiorari according to the English rule is only to be granted where no other suitable remedy exists. If the order of the Magistrate were a judicial order, it would have been made in the exercise either of his civil or of his criminal jurisdiction, and procedure by way of revision would have been open.

40. Even were it to be said that the order was of that quasi-judicial kind to which certiorari has sometimes been applied in England or in India, the Press Act may quite reasonably have intended to take it away, and there is no reason why full effect should not be given to its language.

41. It was contended in <ORG> and before this Board that it was beyond the competency of <ORG> to enact Section 22 and possibly even to enact the Press Act . This argument which was mainly founded upon the language of <NAME> in the case of In the matter of <NAME>) 6 B.L.R. 392, 451 received some encouragement from the Officiating Chief Justice. But their Lordships find themselves unable to appreciate it.

42. The order of <ORG> dismissing this application was therefore right, and the appeal from it must be dismissed.

43. If their Lordships thought that the appellant had made any way, they would have had to consider whether she was not, according to the practice prevailing in cases of certiorari, too late in making her application. Indeed, what advantage the appellant would have gained if she had succeeded upon this application is not very apparent. The power of the local Government to make a forfeiture under Section 4 no doubt depends upon there being a deposit to forfeit. But at the time the order was made, 25th August, 1916, there had been in fact a deposit since 5th June; and the appellant had taken no steps to get herself relieved from the order made on the 22nd May directing the deposit, or to get it back.

44. Even were it contended that the deposit ought to be regarded as having been so unwarrantably exacted that it ought to count as non-existent, there was nothing to show that the local Government was or ought to have been aware of this. Further, Section 22 makes the declaration of the local Government conclusive as to there being a forfeiture.

45. Lastly, the appellant made no application by way of certiorari or otherwise to quash the declaration of forfeiture; and the only way in which it was attacked was by using the procedure under Section 17 , which as pointed out in <ORG> is available only for one purpose, that is of showing on the merits that the published articles were not deserving of forfeiture.

46. Their Lordships have now to deal with the other appeal. Section 4 , Sub- section 1 , of the Indian Press Act is in so far as it is material in the following terms:

(1) Whenever it appears to <ORG> that any printing-press in respect of which any security has been deposited as required by Section 3 is used for the purpose of printing or publishing any newspaper, book, or other document containing any words, signs, or visible representations which are likely or may have a tendency, directly or indirectly, whether by inference, suggestion, allusion, metaphor, implication or otherwise ....

to bring into hatred or contempt His Majesty or the Government established by law in British India or the administration of justice in British India or any Native Prince or Chief under the suzerainty of His Majesty, or any class or section of His Majesty's subjects in British India, or to excite disaffection towards His Majesty or the said Government or any such Prince or Chief; or....

(e) to encourage or incite any person to interfere with the administration of the law or with the maintenance of law and order....

<ORG> may, by notice in writing to the keeper of such printing-press, stating or describing the words, signs or visible representations which in its opinion are of the nature described above, declare the security deposited in respect of such press and all copies of such newspaper, book or other document wherever found to be forfeited to His Majesty.

EXPLANATION IIn Clause (c) the expression 'disaffection' includes disloyalty and all feeling's of enmity.

EXPLANATION II.Comments expressing disapproval of the measures of the <ORG> or of any such Native Prince or Chief as aforesaid with a view to obtain their alteration by lawful means, or of the administrative or other action of the <ORG> or of any such Native Prince or Chief or of the administration of justice in British India without exciting or attempting to excite hatred, contempt or disaffection do not come within the scope of Clause (c).

47. The notice of forfeiture issued on the 25th August, 1916, stated that in the opinion of the Governor in Council twenty passages published in the appellant's newspaper on various dates from the 7th June to the 17th August were of the nature described in Section 4 , Sub- section 1 and declared the security deposited by the appellant to be forfeited. The articles in question were numbered consecutively from 1 to 14, seven articles being numbered 4 and marked with consecutive letters of the alphabet. Thereupon the appellant availed herself of the remedy given to her by Sections 13 and 18 and applied to a Special Bench of <ORG> to set aside the order on the ground that the newspaper did not contain " any words, signs or visible representations" of the nature described in Section 4 , Sub- Section 1 ,

48. This application as already stated was heard by the same Judges as those who sat upon the application for a certiorari. In the unanimous opinion of the Bench, the articles numbered 2, 11 and 13 were within the terms of Section 4 , Sub- section 1 , Clause (c). <NAME> thought that article 11 was also obnoxious to Clause (e). The majority of the Bench, that is to say, the Officiating Chief Justice and <NAME> articles 1, 6, 10 and 12 obnoxious to Clause (c). <NAME> article 7 obnoxious to Clause (e), and articles 9 and 14 obnoxious to Clause (c). <NAME> thought article 8 obnoxious to Clause (c). In accordance with these conclusions the <ORG> dismissed the application made by the appellant.

49. The balancing of important political considerations which is effected by adding explanation No. 2 to the enacting words which are found in the earlier part of the section has its analogy in Sections 124A and 153A of the Indian Penal Code. The language is not precisely the same, but there is the same delicate balancing of two important public considerations, the undesirability of anything tending to excite sedition or to excite strife between classes and the undesirability of preventing any bona fide argument for reform.

50. It is perhaps not easy to see how explanation 2 with its qualifications, adds to, or detracts from the direct language of Clause (c). A similar observation might be made upon Section 124A of the Penal Gode. The utmost that can be said is that the addition of the explanation with its apparent repetition of the positive enactment in the guise of a qualification of the explanation shows an almost meticulous care by the <ORG> to balance the two considerations, prominence being given to the first consideration in the first part of the section, and to the second in the explanation.

51. In applying these balancing principles it is inevitable that different minds may come to different results, one mind attaching more weight to the consideration of freedom of argument, and the other to the preservation of law and order or of harmony.

52. The Section 124A of the Indian Penal Code has been the subject of careful consideration in the cases of the Queen-Empress v. <NAME> (1897) I.L.R. 22 Bom. 112, 528 (in which case this <ORG> refused leave to appeal. See <NAME> v. Quecn-Em-press (1897) L.R. 25 I.A. 1; the Queen-Empress v. <NAME> (1897) I.L.R. 22 Bom. 152 and the <CITATION> (1897) I.L.R. 20 All. 55, F.B. and though as already stated the language of this section is not precisely the same as the language in the Press Act these judgments are of considerable assistance towards the construction of Section 4 .

53. In substance the question under Clause (c) of Section 4 , Sub- section 1 , comes to this; are the passages such as in fact to excite, or do they disclose an attempt ( which implies intention ) to excite hatred, contempt or disaffection towards the <ORG> or of any class or section of His Majesty's subjects in India; and in judging the question of intent the publisher must be deemed to intend that which is the natural result of the words used having regard, among other things, to the character and description of that part of the public who are to be expected to read the articles.

54. As regards the question of hatred or contempt of a class of section, it was argued that the object of the article was to attack the system, not a class or section. It may be assumed, for the purposes of this case, that there may be reference to a class or section of His Majesty's subjects so couched as to show that the attack is merely upon a school of opinion, and that unless the language is such as to excite hatred or contempt of persons, it may escape condemnation. But assuming this, the appellant remains face to face with the difficulty that there is language used in certain of the articles which may legitimately be construed as tending by inference or suggestion to excite hatred or contempt in such a fashion that it may become personal.

55. It may well be that the primary object was a legitimate attack upon a system, but unless care is taken it becomes difficult to make a fierce attack upon a system without conveying some imputation upon the class which the system makes or which carries the system into practice. And it must be remembered that those words in Clause (c) which refer to the hatred or contempt of a class or section are not limited by explanation 2, and that there has been in this respect some departure from the policy of the Penal Code , which superadded a qualifying explanation which has not found place in the Press Act .

56. As to Clause (c) the majority of the Judges in <ORG> were brought to the conclusion that the attacks on Anglo-India or Anglo-Indians or the bureaucracy as the case may be, were calculated, whatever might have been the primary object of the writer, to bring into hatred or contempt persons forming a class or section of His Majesty's subjects, namely, English Civil Servants in India, in some cases Englishmen in India generally.

57. All the Judges thought that several passages were calculated to bring the Government into hatred and contempt, and this after giving due weight to explanation 2. There were also as already stated findings by <NAME> and <NAME> bringing some of the articles under Clause (e), a clause which it should be noted is not qualified by any explanation.

58. Upon careful perusal of the several judgments their Lordships find that weight has been properly given to the several portions of the section. They do not find that the section has been misconstrued. There remains only the question of application in detail of the principles of the Law to the language of the various articles.

59. When their Lordships have progressed so far, the question becomes one which partakes so much of the nature of a question of fact, that it would be difficult for their Lordships, even if they were inclined to construe the natural tendency of the words differently, to interfere with the conclusions arrived at by the <ORG> in India. For <ORG> when it sits to advise His Majesty in the exercise of his prerogative in criminal cases, does so under constitutional limitations which, as has often been explained, and notably in the case of <NAME> v. <NAME>), (and in <NAME>'s case already quoted) preclude it from exercising the full functions of a <ORG> of Criminal Appeal.

60. It should be added that for the purpose of considering, not the intention to excite, but the fact whether the articles are such as to excite, the Judges in India with a far closer knowledge of the character of the people likely to read the articles, have better means of judging than their Lordships in England.

61. Here the matter might rest. But in the particular circumstances of this case, and after the elaborate argument at the <ORG>, their Lordships think it well to go further, and to say that if they considered it proper to look into the matter in detail, they would hold that the articles which were the subject of unanimous condemnation, and at least some of those which came under the censure of Judges in <ORG>, were obnoxious to the provisions of Clause (c), and possibly in some cases to those of Clause (e), and that the <ORG> was right in supporting the declaration of forfeiture. Their Lordships will therefore humbly recommend His Majesty that both these appeals should be dismissed with costs.


PETITIONER: <ORG> Vs. RESPONDENT: COLLECTOR OF CENTRAL EXCISE, BELGAUM DATE OF JUDGMENT17/02/1987 BENCH: MISRA RANGNATH BENCH: MISRA RANGNATH PATHAK, R.S. (CJ) CITATION: 1987 AIR 1161 1987 SCR (2) 309 1987 SCC (2) 93 JT 1987 (1) 469 1987 SCALE (1)361 CITATOR INFO : R 1988 SC1236 (5) ACT: Central Excises and Salt Act , 1944 section 11A and Explanation thereto, scope of--Limitation of six months' period--No order of the court staying the service of notice--Whether a show cause notice issued beyond the limi- tation, period specified under section 11A is valid. HEADNOTE: A show cause notice dated 29.1.1976 issued by the re- spondent to the appellant calling upon him to explain as to why excise duty treating his product as "fabric" and not as "yarn" may not be levied, was challenged in <ORG> in Writ Petition No. 2632/ 1976. Pending final disposal of the writ petition, an interim order staying the collection of excise duty as a "fabric" for the period 1.4.1975 to 18.8.75 alone was passed with a specific direc- tion that the appellant should continue to pay excise duty as "yarn". Finally the writ petition was dismissed on 16.2.1981. On 20th May, 1982, another notice No. 913 to show cause was issued to the appellant simultaneously seeking to raise a demand for the period from 20.6.1976 to 28.2.1981 apart from for the period between 1.4.1975 to 18.8.1975 challenged in the earlier writ petition. <ORG> having rejected the plea of bar of limitation under section 11A of the Central Excises and Salt Act , 1944 raised in the writ petition challenging the said second show cause notice and demand, the appellant has come in appeal by way of special leave. Allowing the appeal, the Court, HELD: 1.1 Section 3 of the Act which contains the charg- ing provision clearly shows that levy and collection are two distinct and separate steps. [312H] 1.2 The provision of section 11A(1) and (2) of the Central Excises and Salt Act , 1944 make it clear that the statutory scheme is that in the situations covered by the sub-section(1), a notice of show cause has to be issued and sub-section(2) requires that the cause shown by way of representation has to be considered by the prescribed au- thority and then 310 only the amount has to be determined. The scheme is in consonance with the rules of natural justice. An opportunity to be heard is intended to be afforded to the person who is likely to be prejudiced when the order is made, before making the order thereof. Notice is thus a condition prece- dent to a demand under sub-section(2). In the instant case, compliance with this statutory requirement has not been made, and, therefore, the demand is In contravention of the statutory provision. [313E-G] 2. Explanation to section 11A of the Central Excises and Salt Act , 1944, which incorporates a well known principle of law, in clear terms refers to 'stay of service of notice'. The <ORG> order did not at all refer to service of notice. The <ORG> having directed stay of collection of duty as 'fabric' has not issued any interim direction in the matter of issue of notice of levy of the duty. Therefore, the benefit of Explanation to section 11A of the Act is not available to the Respondent. [313C- <CITATION> .,  SCR 1287; and <NAME> As- sistant Collector of <ORG>. v. <ORG>,  3 SCR 506, 514 referred to. JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 161 Of 1986.

From the Judgment and Order dated 17.9.85 of <ORG>, New Delhi in Appeal No. ED(SB) (T) 463/84-D.

<NAME>, <NAME>, <NAME>, <NAME> and <NAME> for the Appellant.

<NAME>, Additional Solicitor General, Mrs. <NAME> and Ms. <NAME> for the Respondent. The Judgment of the Court was delivered by <NAME>, J. The fate of this appeal under sec- tion 35(L) of the Central Excises and Salt Act , 1944, de- pends upon the meaning and scope of the Explanation appear- ing in section 11A of the Act.

<ORG> by its order dated 4.6.1976 in Writ Petition No. 2632 of 1976 gave the following direc- tion:

"Pending disposal of the aforesaid writ Peti- tion, it is ordered by this Court that collec- tion of excise duty as a fabric be and the same is hereby stayed. It is further ordered that the petitioner shall however continue to pay exercise duty as yarn and shall further maintain an account in square metres for future clearance."

The said Writ Petition was ultimately dismissed by <ORG> on 16.2. 1981. The operative part of the <ORG>'s final order ran thus:

"For the reasons aforesaid, we make the fol- lowing order:-

(i) Rule discharged;

(ii) We decline to interfere at this stage leaving open to the petitioner to urge all the contentions in reply to the show cause notices."

On 20th May, 1982, a notice to show cause was issued to the appellant by the Assistant Collector, being Notice No. 913, and with this the Collector sought to raise a demand for the period from 20th June, 1976 to 28th February, 1981 apart from for the period between 1.4. 1975 to 18.8.1975 in respect of which an earlier show cause notice dated 29.1. 1976 had already been issued.

It is not disputed by the <ORG> that the appropriate period of limitation to apply to the facts of the case is six months as provided in section 11A of the Act and that the Notice issued on 20th of May, 1982 was beyond that period. Reliance was placed on the Explanation for obtaining extension of that period. The Explanation reads thus:

"Where the service of the notice is stayed by an order of a <ORG>, the period of such stay shall be excluded in computing the aforesaid period of six months or five years, as the case may be."

The provision in the Explanation incorporates a well-known principle of law. Section 15 of the Limitation Act of 1908 (also of Section 15 of the Limitation Act of 1963) incorpo- rates the same principle. This <ORG> in <CITATION> ,  SCR 1287 dealt with the effect of an order of injuc- tion in the matter of computation of limitation. At page 1302 of the Reports, <NAME>, J. as he then was, spoke for the <ORG> thus.

"It is plain that, for excluding the time under this section, it must be shown that the institution of the suit in question had been stayed by an injunction or order; in other words, the section requires an order or an injunction which stays the institution of the suit. And so in cases falling under Section 15 , the party instituting the suit would by such institution be in contempt of court. But in our opinion, there would be no justifi- cation for extending the application of s. 15 on the ground that the institution of the subsequent suit would be inconsistent with the spirit or substance of the order passed in the previous litigation ........ "

In the instant case, the order of stay passed by <ORG> had only stayed the collection of the excise duty, which is a stage following levy under the scheme of the Act. Obviously there was no interim direction of <ORG> in the matter of issue of notice for the purpose of levy of duty. The relevant portion of Section 11A provid- ed.

"(1) When any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, a Central Excise Officer may, within six months from the relevant date, serve notice on the person chargeable with the duty which has not been levied or paid or which has been short-levied or short-paid or to whom the refund has erro- neously been made, requiring him to show cause why he should not pay the amount specified in the notice:

(2) The Assistant Collector of Central Excise shall, after considering the representation, if any, made by the person on whom notice is served under sub-section (1), determine the amount of duty of.excise due from such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amount so determined. ' ' Reference to Section 3 of the Act which contains the charg- ing provision clearly shows that levy and collection are two distinct and separate steps. This Court in <CITATION> .,  3 SCR 506, at page 514 stat- ed:

" .... The charging provision section 3(i) specifically says "there shall be levied and collected in such a manner as may be pre- scribed the duty of excise ..... "It is to be noted that sub-section (i) uses both the expressions "levied and collected" and that clearly shows that the expression "levy" has not been used in the Act or the Rules as meaning actual collection."

<ORG> having directed stay of collection had, therefore, not given any interim direction in the matter of issue of notice or levy of the duty. The Explanation in clear terms refers to stay of service of notice. The order of <ORG> did not at all refer to service of notice. Therefore, there is force in the submission of the appellant that the benefit of the Explanation is not available in the facts of the case.

No notice seems to have been issued in this case in regard to the period in question. Instead thereof an out- right demand had been served. The provisions of Section 11A (1) and (2) make it clear that the statutory scheme is that in the situations covered by the sub-section (1), a notice of show cause has to be issued and sub-section (2) requires that the cause shown by way of representation has to be considered by the prescribed authority and then only the mount has to be determined. The scheme is in consonance with the rules of natural justice. An opportunity to be heard is intended to be afforded to the person who is likely to be prejudiced when the order is made, before making the order thereof. Notice is thus a condition precedent to demand under sub-section (2). In the instant case, compliance with this statutory requirement has not been made, and, there- fore, the demand is in contravention of the statutory provi- sion. Certain other authorities have been cited at the hearing by counsel for both sides. Reference to them, we consider, is not necessary.

The appeal has to be allowed and the demand raised for the period 19.8.1975 to 23.2.1981 has to be set aside. There shall be no order for costs. The tax paid, if any, shall be refunded to the appellant.

S.R. Appeal al- lowed.


PETITIONER: <NAME> Vs. RESPONDENT: THE STATE OF MADHYA PRADESH AND OTHE DATE OF JUDGMENT: 16/03/1954 BENCH: <NAME>, MEHAR CHAND (CJ) BENCH: <NAME>, MEHAR CHAND (CJ) MUKHERJEA, B.K. DAS, SUDHI RANJAN BOSE, VIVIAN HASAN, GHULAM CITATION: 1954 AIR 403 1954 SCR 1122 CITATOR INFO : F 1955 SC 661 (5,8,60,123,145) R 1955 SC 765 (5) R 1957 SC 397 (14) R 1957 SC 790 (10) RF 1958 SC 578 (228) RF 1959 SC 725 (10) D 1960 SC 424 (14) RF 1961 SC 65 (5) R 1961 SC1615 (11) R 1962 SC 123 (12) RF 1962 SC1006 (77) R 1962 SC1621 (10,12,39,44,45,46,110) R 1967 SC1401 (8) D 1971 SC2280 (11) F 1975 SC1443 (6) ACT: Constitution of India, arts, 19(1)(g), 226, 286(1)(a)- Central Provinces and Berar Sales Tax Act (Act XXI of 1947), as amended by, Act XVI of 1949-Explanation II to section 2(g)-Whether ultra vires the Constitution-Threat to use coercive machinery of Act for realising tax-whether infringement of fundamental rights under art. 19(1)(g) of the Constitution. HEADNOTE: Held, (i) that explanation II to s. 2(g) of the Central Provinces and Berar Sales Tax Act (Act XXI of 1947) as amended by Central Provinces and Berar Act (Act XVI of 1949) is ultra vires <ORG>. (ii) A threat by the <ORG> to realize tax from the assesses without the authority of law by using the coercive machinery of the impugned Act is a sufficient infringement of his fundamental right under art. 19(1)(g) and gives him a right to seek relief under art. 226 of the Constitution. The impugned Act, requiring the assesses to-deposit the whole of the tax before he can get the relief provided by it, cannot be said to provide an adequate alternative remedy. <CITATION> . ( s C.R. 1069); <CITATION> in council (L.R. 74 I.A. 50); <CITATION> ( S.C.R. 572) referred to. JUDGMENT:

CIVIL APPELLATE JURISDICTION : Civil Appeal No, 20 of 1952. Appeal under article 132(1) of the Constitution of India from the Judgment and Order dated the 25th April, 1952, of <ORG> at Nagp ur in Miscellaneous Petition No. 1623 of 1951.

<NAME> Engineer (<NAME> and <NAME> off, with him) for the appellant.

<NAME>, Advocate-General of Madhya Pradesh, <NAME>, with him) for respondent No. 1.

<NAME>, Advocate-General of Madras (<NAME>, with him) for the intervener.

1954. MArch 16. The Judgment of, the Court was delivered by <NAME> is an appeal by leave from a judgment of <ORG> at Nagpur dated the 25th of April, 1952, dismissing a petition under article 226 of the Constitution of India filed by the appellant questioning the vires of certain provisions of the Central Provinces and Berar Sales Tax Act 1947.

The appellant represents a concern <ORG>, a company registered under' the Indian Companies Act , 1913, having its head office at Bombay, and several branches in . the State of Madhya Pradesh. The main business of the appellant company is that of cotton. The head-office of the appellant at Bombay sells cotton bales to several mills and individuals under the control and the system regulated by the Textile Commissioner at Bombay, and upon a contract of sale being completed the goods after being ginned and pressed are sent from Khamgaon and other places in the State of Madhya Pradesh and are actually delivered in Bombay and such other places outside the State of Madhya Pradesh as directed by the head office. The cotton bales are sent by rail under an insurance in favour of the appellant, and are delivered to the buyer by tender of railway receipt against the payment of price in Bombay. Under the Central Provinces and Berar Sales Tax Act, 1947 (Act I XXI of 1947), cotton was declared liable to sales tax on the 11th of April, 1949, and since that date the appellant commenced paying the tax in respect of the purchases made by it, and continued to pay it till the 31st of December, 1950. For the quarter ending on the 31stof March, 1951, the appellant declined to pay the tax in respect of the purchases made during that quarter, realizing that it could not be made legally liable for the payment of this tax in the State of Madhya, Pradesh, the transactions done or effected in Madhya Pradesh not being " sales" within that State. Apprehending that the company may be subjected to the payment of the tax without authority of law, an application was preferred in <ORG> at Nagpur praying for an appropriate writ or writs which may secure to the company protection from the impugned Act and its enforcement by the State. It was alleged that Explanation II to section 2(g) of the Central Provinces and Berar Sales Tax Act, 1947, as further amended by Act XVI of 1949 was ultra vires and illegal. This petition, along with a refer eence in another case (Miscellaneous Civil Case No. 258 of 1951: A.I.R. 1952 Nag.

378), was heard by a Division Bench of <ORG> and it was held that Explanation II to section 2(g) of the Act was not enforceable because under the Constitution sales tax could only be collected, in the State where the goods were delivered for consumption. It was further held that Explanation 11 as amended by the C.P. & Berar Act XVI of 1949 was not validly enacted because it made drastic changes in the rules of the Sale of Goods Act . Without obtaining the assent of the Governor-General as required by section 107 of the Government of India Act, 1935. 'It was observed that the mere p reduction of the goods in a State is not enough to make the tax payable unless the goods are appropriated to a particular contract, and that to impose the tax at that stage would be tantamount to charging an excise duty and not a tax on the sale of goods. In spite of these findings <ORG> declined to issue a writ and dismissed. the petition made to it under article 226 of the Constitution on the ground that a mandamus issues only to compel an authority to do or abstain from doing some act, that it is seldom anticipatory and certainly never issues where the action of the authority is dependant on some action of the petitioner and that in the present case the petitioner had not even made his return and no demand for the tax could be made from him.

In this appeal it was argued, by <NAME>, learned counsel for the appellant, that an illegal and unjust imposition operates as an illegal restraint on trade and violates fundamental rights, that <ORG> having held that the Constitution by article 286 thereof made delivery of the goods for consumption the decisive factor for determining which State should have the right of taxing such sales, and having thus found the provision of the Explanation to the definition of "sale" unconstitutional, should have issued a writ of mandamus restraining the respondent State from enforcing that part of the Act.

To appreciate the contentions of the learned counsel it is necessary to set out the relevant provisions of the Act which, <ORG> has declared ultra vires <ORG>. Act XXI of 1947 defines the expression "sale" in section 2(g) of the Act in these terms:- " 'Sale' with all its grammatical variations and cognate expressions means any transfer of property in goods for cash or deferred payments or other valuable consideration including transfer of property in goods made in the course of the execution of a contract, but does not include a mortgage, hypothecation, charge or pledge ". " Explanation.(I)-" A transfer of goods on hirepurchase or other instalment system of payment shall, notwithstanding that the seller retains a title to any goods as security for payment of the price, be deemed to be a sale. "

Explanation (II)-" Notwithstanding anything to the contrary in the Indian Sale of Goods Act , 1930, the sale of any goods which are actually in the Central Provinces and Berar at the time when the contract of sale as defined in that Act in respect thereof is made, shall, wherever the said contract of sale is made, be deemed for the purpose of this Act to have taken place in the Central Provinces and Berar. "

This provision was amended by the Central Provinces and Berar Act XVI of 1949 which came into force on the 11th of ApriL 1949, by which Explanation II of section 2(g) was amended as follows:-

Explanation (II)-,' Notwithstanding anything to the contrary in the Indian Sale of Goods Act , 1930, the sale or purchase of any goods shall be deemed for the purposes of this Act, to have taken place in this Province-wherever the contract of sale or purchase might have been made

(a) If the goods were actually in this Province at the time when the contract of sale or purchase in respect thereof was made, or

(b) In case, the contract was for the sale or purchase of future goods by description, then, if the goods are actually produced or found in this Province at any time after the contract of sale or purchase in respect 'thereof was made. "

Certain amendments were made in the Act, by Act IV of 1951 which came into force on the 1st of April. 1951, but these are not relevant to the present' inquiry. As pointed out above, <ORG> held that the new Explanation II was ultra vires <ORG> and that the mere production of goods was not enough to make the tax payable unless the goods were appropriated to a particular contract. The correctness of this view can no longer be questioned by reason of the majority decision of this court in <CITATION> .(1), wherein it was held that article 286(1) (a) of the Constitution read with the Explanation thereto and construed in the light of article 301 and article 304 prohibits the taxation of sales or purchases involving inter-State elements, by all States except the State in which the goods are delivered for the purpose of consumption therein and that the view that the Explanation does not deprive the State, in which the property in the goods passed, of its taxing power and that consequently both the State in which the property in the goods passes and the State i n which the goods are delivered for consumption have the power to tax, is not correct.

The learned Advocate-General of the <ORG> did not in this situation, and very properly, challenge the correctness of the decision of <ORG> on this point, and conceded that the Explanation was clearly ultra vires the <ORG> Legislature. He however contended that on the principle enunciated by the Privy (1) [1953] S.C.R. 1069.

<ORG> in <CITATION> in <ORG>(1), jurisdiction to question assessment otherwise than by use of the machinery expressly provided by the Act, was inconsistent with the statutory obligation to pay, arising by virtue of the assessment and that the liability to pay the sales tax under the Act is a special liability created by the Act itself which at the same time gives a special and particular remedy which ought to be resorted to, and therefore the remedy by a writ ought not to be allowed to be used for evading the provisions of the Act, especially a fiscal Act. It was also said that the con- ditions requisite for the issue of a writ of mandamus were not present in the case and that it was not within the scope and purpose of article 226 of the Constitution to decide an academic question.

In our opinion, the contentions raised by the learned Advocate-General are not well founded. It is plain that the State evinced an intention that it could certainly proceed to apply the penal provisions of the Act against the appellant if it failed to make the return or to meet the demand and in order to escape from such serious consequences threatened without authority of law, and infringing fundamental rights, relief by way of a writ of mandamus was clearly the appropriate relief. <CITATION> (2), it was held by this court that a licence fee on a business not only takes away the property of the licensee but also operates as a, restriction on his fundamental right to carry on his business and therefore if the imposition of a licence fee is without authority of law it can be challenged by way of an application under article 32 , a fortiori also, under article 226. These observations have apposite application to the circumstances of the present case. Explanation II to section 2(g) of the Act having been declared ultra vires, any imposition of sales tax on the appellant in Madhya Pradesh is without the authority of law,, and that being so a threat by the State by using the coercive machinery of the impugned Act to (1) 74 I.A. 5o.

(2) [1952] S.C.R. 572, I46 realize it from the appellant is a sufficient infringement of his fundamental right under article 19(1) (g) and it was clearly entitled to relief under article 226 of the Constitution. The contention that because a remedy under the impugned Act was available to the appellant it was disentitled to relief under article 226 stands negatived by the decision of this court in <CITATION> .(1), above referred to. There it was held that the principle that a court will not issue a prerogative writ when an adequate alternative remedy was available could not apply where a party came to the court with an allegation that his fundamental right had been infringed and sought relief under article 226. Moreover, the remedy provided by the Act is of an onerous and burdensome character. Before the appellant can avail of it he has to deposit the whole amount of the tax. Such a provision can hardly be described as an adequate alternative remedy.

For the reasons given above, we are of the opinion that <ORG>, having held that the Explanation II to section 2(g) of the Act was ultra vires, was in error in dismissing the application on the ground that it was not entitled to relief under the provisions of article 226 of the Constitution. In the result therefore we &How this appeal with costs and direct an appropriate writ to issue restraining the first respondent from imposing or authorising imposition of a tax on the appellant in exercise of its authority under Explanation 11 held void.

Appeal allowed.

(I) [1953] S.C.R. 1069.