KISHORE KUMAR PRASAD, J.
(1) THESE two matters were heard together as they are inter linked. The first matter arises out of a reference made by a learned single Judge of this Court for determination of the following question by a division Bench:
"whether cess payable, under section 5a of the Textiles Committee Act, 1963, by a manufacturer of textiles who neither paid duty of excise under central Excise and Salt Act, 1944, nor submitted returns and paid cess under Textiles Committee Act, 1963, can be assessed by the Assessing Officer under this Act on the basis of figures obtained from source or sources other than the two alternative sources (i. e. , the Central Excise Department or the average of the cess levied during the previous two quarters) mentioned in rule 8 of the Textiles Committee (Cess) Rules, 1975. "
(2) BRIEFLY stated the facts giving rise to the filing of the writ application under Article 226 of the Constitution of India before the learned Single Judge are as follows: a notice dated 30th January, 2002 (Annexure-P2) was issued against the petitioner No. 1, viz. M/s. Biswanath Hosiery Mills Ltd. It was issued by the assessing Officer appointed by the Committee established under the provisions of the Textiles Committee Act, 1963 (hereinafter referred to as "the Act"), By it, the Assessing Officer afforded an opportunity of hearing to the petitioner No. 1, viz. M/s. Biswanath Hosiery Mills Ltd. , before assessment of cess payable by it in terms of section 5a of the Act. It was indicated that for the period from 1996-97 to 2000-01 the amount of payable cess would be around Rs. 14 lakh.
(3) AFTER hearing the petitioner No. 1, the Assessing Officer passed an order dated 5th March 2002 (Annexure-'p3'). By the said order, the petitioner No. 1 was directed to submit the returns and pay the cess. Such order was followed by five demand notices (Annexure-'p4'). All the notices were issued on 10th april, 2002. They were issued under the provisions of the Textiles Committee (Cess) Rules, 1975 (hereinafter referred to as "the rules").
(4) BEING aggrieved by the order dated 5th March, 2002 and the consequent demand notices, all dated April 10, 2002, the aforesaid writ application was filed by the petitioners on April 24, 2002 with the following prayers:
"a) A writ of and/or order and/or direction in the nature of mandamus, commanding the respondents, their agents, servant and/or representatives to withdraw, cancel and/or rescind the said purported notices being Annexure 'p2' and 'p4' directing the petitioners to submit return and pay cess according to purported assessment of cess made therein under Textiles Committee act, 1963 as amended by Textiles Committee (Amendment) Act, 1973 and the rules framed thereunder and/or purported proceeding relating thereto and to act in accordance0 with law; b) A writ of and/or order and/or direction in the nature of certiorari commanding the respondents, their servants, agents and/or representatives to transmit and certify the records relating to this case to this Hon'ble Court so that the same may be quashed and/or conscionable justice may be rendered; c) Declaration that Textiles Committee Cess is not leviable upon hosiery goods manufactured by the petitioners which are no exercisable goods; d) Rule NISI in terms of prayers (a) (b) and (c); e) Injunction restraining the respondents, their agents, servants and/or representatives from giving effect to and/or taking any steps pursuant to and/or in furtherance of the said purported notices being Annexures P-2 and P4 to this petition issued under the Textiles Committee Act, 1963 as amended by the Textiles Committee (Amendment) Act, 1973 and the rules framed thereunder directing the petitioners to submit their return and to pay cess under the said Act and/or to proceed with any proceeding including certificate proceeding, if any relating thereto against the petitioners till the disposal of this application; f) Ad interim orders in terms of prayer (e) above ; g) Costs of and incidental to this application be paid by the respondents; h) Such further order or orders be made and/or direction or directions be given as this Hon'ble Court may deem fit and proper. "
(5) THE learned Advocate appearing on behalf of the writ petitioner basically advanced three contentions before the learned Single Judge. First, cess is payable under the Act only by the manufacturer of the textiles who is liable to pay duty of excise under the Central Excise and Salt Act, 1944. Secondly, the petitioner No. 1 being a manufacturer of hosiery cannot be considered to be a manufacturer of textiles within the meaning of section 5a (3) of the Act, as the hosiery is exempted from duty under the Act of 1944. Thirdly, according to the petitioner, when Rule 8 specifies only two sources for obtaining the figures on the basis whereof the assessment could be made, the assessment made by the assessing Officer on the basis of information derived and figures so obtained from a source other than any of the two. sources mentioned in Rule 8, must be held to be bad in law being an act done de hors the provision of the relevant rule.
(6) THE learned Single Judge overruled the first two contentions by giving specific reasons and while rejecting the third contention, His Lordship observed that there is a decision of another learned Single Judge on the aforesaid question taking a contrary view; accordingly, His Lordship referred the question on the aforesaid third submission before the Hon'ble Chief Justice for sending the same to a Division Bench.
(7) THE writ petitioner has also preferred a separate mandamus appeal against the finding of the learned Single Judge on the first two questions referred to above. The said mandamus appeal has also been assigned to this Bench for hearing along with the reference.
(8) WE, therefore, heard the mandamus appeal as well as the reference together.
(9) THE learned Counsel appearing for the petitioners contended that the learned Single Judge failed to appreciate that the cess in terms of section 5a of the Textiles Committee Act, 1963 is payable only by those manufacturers of hosiery items who are liable to pay duty of excise under the Central Excise and salt Act, 1944 and as such, the learned Single Judge erred in holding that the petitioner is liable to pay cess for manufacturing its hosiery products. The learned Lawyer further contended that the learned Judge also erred in holding that the manufacturer of textile/hosiery is liable to pay cess under section 5a of the Textiles Committee Act, 1963 independently and such liability has no manner of connection with the manufacturers liable to pay duty of excise under the Central Excise and Salt Act, 1944. According to the learned Lawyer, Form-A prescribed under Rule 4 of the Textiles Committee Rules, 1975 discloses the legislative intent that cess payable under the Act is not an independent liability; that reference of the Central Excise Department to Rule 8 of the Textiles committee Rules indicates that cess under the Act is payable only by those manufacturers of textile who pay duty of excise under the Central Excise and salt Act, 1944; that Central Excise Department has been named in Rule 8 only as a source wherefrom the Assessing Officer under the Act would be entitled to obtain the required figures for assessing cess payable by a manufacturer of textiles who does not submit return and pay the cess on his own; that cess is a part of a duty of excise under the Central Excise and Salt Act, 1944 as defined in Rule 2 (C) of the Textiles Committee (Cess) Rules, 1975 and is not an independent levy which has no manner of connection with the manufacturer's liability to pay the duty of excise under Central Excise and Salt Act; that the cess under the said Act is a part of a duty of excise under the Central Excise and Salt Act, 1944 and no cess can be levied and/or collected without levying the duty of excise under the Central Excise and Salt Act, 1944; that when Rule 8 of the Textiles Committee (Cess) Rules, 1975 specifically provided a manner in which cess has to be collected, the cess can only be collected in that manner and all other modes of collection of the cess in any event is impliedly barred and the authorities concerned are empowered to make assessment only by observing Textiles Committee Rules, 1975 and in no other manner. The learned lawyer contended further that the learned Judge erred in accepting the contention of the respondents that in absence of return submitted by a manufacturer and when such manufacturer is exempted from paying duty of excise under the Central Excise and Salt Act, 1944 because of an exemption notification, the Assessing Officer is entitled to assess cess by following any other means not provided for in the Act or in the rules.
(10) THE learned Counsel for the writ petitioner in this connection relies, upon the following decisions of the Supreme Court in support of his contentions:
a) Member Secretary, AP State Board Water Pollution vs. A. P. Rayons Ltd. , reported in AIR 1989 SC 611; b) J. K. Steel Ltd. vs. Union of India and Ors. , reported in AIR 1970 SC 1173; c) Union of India and Ors. vs. Deokinandan Agarwalla, reported in AIR 1992 sc 96; d) A. K. Roy and Ors. vs. State of Punjab, reported in AIR 1986 SC 2160; e) Calcutta Jute Manufacturing Ltd. and Ors. vs. Commercial Tax Officer and ors. , reported in AIR 1997 SC 2920.
(11) THE learned Counsel for the respondents on the other hand vehemently opposed the aforesaid contention advanced by the learned Counsel of the petitioners and supported the reasons assigned by the learned Single Judge. The learned Counsel laboriously contended before us that on a reading of the provision of the Act and the rules framed thereunder, the learned Single Judge rightly came to the conclusion that the Assessing Officer is free to obtain the necessary figures and information from any and every valid source for assessing liability of a manufacturer, in a case, where the manufacturer does not submit the returns and pay the cess payable under the Act on his own and such an interpretation, if given to the provisions contained in Rule 8, does not cause any prejudice or injury to the assessee but rather advances the purposes and objects of section 5a of the Act.
(12) IT was also submitted that cess payable under the Act is an independent liability of a manufacturer of textiles and such liability has no connection whatsoever with the liability of such manufacturer to pay duty of excise under the Central Excises and Salt Act, 1944 and reference to the returns submitted by a manufacturer to the Central Excise Department has been made in the rules and particularly in Rule 8 of the Rules and in Form-'a' prescribed under rule 4, only for the purpose of facilitating collection of the required information by the Assessing Officer for determining the manufacturer's liability in a case where the manufacturer fails to submit the returns and pay the cess, and such reference to the Central Excise Department, cannot be interpreted so as to defeat the purpose of the charging section of the Act (i. e. , section 5a), which casts an unqualified statutory obligation on a manufacturer of textiles to pay the cess, i. e. , a duty of excise.
(13) THE learned Counsel for the respondents further argued that decision rendered earlier by another the learned Single Judge which has been dissented to by the learned Trial Judge by was given without considering the purpose and object of the Act, and particularly that of section 5a (which is the charging section) and the provisions contained in the Rule 11 of the rules and while the charging section created a liability, the rules and particularly provisions of rule 8, must be interpreted so as to advance the purpose and object of the charging section and not to frustrate and defeat the same.
(14) THE learned Counsel relied on the judgment of the Madras High Court in the case of Tamil Nadu Handloom Weavers Co-operative Society vs. Assistant collector of Central Excise, Erode, reported in 1978 ELT (J 57) where Madras high Court held that once the goods are exempted from excise duty they do not cease to be excisable goods. The character of the excisable goods does not depend on the actual levy of duty but depends on the description as excisable goods in the First Schedule to the Act.
(15) THE learned Counsel also relied on the judgment of the Supreme Court in the case of Assistant Collector of Central Excise, Calcutta vs. National Tobacco co. Ltd. , reported in AIR 1972 SC 2563. The learned Counsel for the respondents led stress on the observation made in paragraphs 25 to 31 which are quoted herein below:
"25. We think that Rule 10 should be confined to cases where the demand is being made for a short levy caused wholly by one of the reasons given in that rule so that an assessment has to be reopened. The findings given by the calcutta High Court do not show that, in the case before us, there was either a short levy or that one of the grounds for a short levy given in Rule 10 really and definitely existed. No doubt, the Division Bench gave a reason for the way in which the claims became time barred, in the following words : 'it is quite possible, that the excise authorities, in an attempt to help the appellants by facilitating the movements of goods, inadvertently allowed the claims to be barred by limitation. That, however, is not a matter which can affect the question of limitation. The bar of limitation has been imposed by statute. The morality of the case or the conduct of the parties is therefore irrelevant unless the law provides that the Court on that ground can afford relief. "
26. This finding was presumably given to show that the impugned notice fell within the purview of Rule 10 because the demand was due to a short levy caused by 'inadvertence' of the officer concerned. It will be noticed that the Division Bench did not go beyond finding a 'possibility' of such inadvertence. This is not a finding that it was definitely due to it. No finding which could clearly relate the case to any cause for short levy found in Rule 10 was given. Moreover, we find that there was no case taken up by the company in its petition before the High Court that any short levy resulted for an inadvertence of the officer concerned in the process of assessment. The case set up was that of a levy after a completed assessment in accordance with law, which could not, according to the company, be reopened. If, therefore, as we find from the conclusions recorded by the High Court itself, what took place was not an 'assessment' at all in the eye of law, which could not be reopened outside the provisions of Rule 10, we think that the case will fall beyond Rule 10 as it stood at the relevant time.
27. The notice set out above does not purport to be issued under any particular rule probably because the Collector, in the circumstances of the case, was not certain about the rule under which the notice could fall. But, as was pointed out by this Court in Sanjana's case (supra), the failure to specify the provision under which a notice is sent would not invalidate it if the power to issue such a notice was there.
28. The notice alleged that it is a case of 'incomplete assessment'. The allegations contained in it have been characterized by the learned Counsel for the company as a change of front intended to cover up the neglect of the collector in failing to comply with the correct procedure of making either an assessment before delivery contemplated by Rule 52 or a provisional assessment under Rule 10b. We are unable to hold, either upon the findings given by the High Court or upon facts transpiring from the affidavits filed by the parties that the notice was a mere cloak for some omission or error or inadvertence of the Collector in making a levy or an assessment.
29. We may point out that Rule 10 itself has been amended and made more reasonable in 1969 so as to require a quasi-judicial procedure by serving a show-cause notice 'within 3 months from the date on which the duty or charge was paid or adjusted in the owner's account current, if any'. This amendment made on 11. 10. 1969, indicates that the quasi-judicial procedure, for a finding on an alleged inadvertence, error, collusion, or mis-construction by an officer, or mis-statement by the assessee, as the cause of an alleged short levy resulting from an assessment can now be embarked upon and not necessarily completed within the prescribed period. We are, however, concerned with the procedure before this amendment took place. At that time, it was certainly not clear whether a case would fall under Rule 10 even before the short levy or its cause was established. Furthermore, in the present case, the reason for an alleged short-levy could be a change of basis of proposed assessment under instructions from higher authorities mentioned above. Even that change of basis was held by the High Court to be erroneous. Until the High Court indicated the correct basis there was an uncertainty about it. Such a ground for an alleged short-levy would be analogous to the reason for the introduction of Rule 10a itself which, a pointed out in N. R. Sanjana's case, AIR 1971 SC 2039 (supra), was a change in the law. One could go back still further and come to the conclusion that the real reason for the alleged short-levy was a failure of the company to supply the fuller information it used to supply previously and not just a mis-statement. If the case does not clearly come within the classes specified in Rule 10, this rule should not be invoked because, as was rightly contended for the appellant, a too wide construction put on Rule 10 would make Rule 10a useless. The two rules have to read together.
30. It is true that Rule 10a seems to deal only with collection and not with the ascertainment of any deficiency in duty or its cause by a quasi-judicial procedure. If, however it is read in conjunction with section 4 of the Act, we think that a quasi-judicial proceeding, in the circumstances of such a case, could take place under an implied power. It is well-established rule of construction that a power to do something essential for the proper and effectual performance of the work which the statute has in contemplation may be implied. See Craies on Statute Law (Fifth Edition) p. 105.
"31. The question whether there was or was not an implied power to hold an enquiry in the circumstances of the case before us, in view of the provisions of section 4 of the Act read with Rule 10a of the Central Excise Rules, was not examined by the Calcutta High Court because it erroneously shut out consideration of the meaning and applicability of Rule 10a. The High Court's view was based on an application of the rule of construction that where a mode of performing a duty is laid down by law it must be performed in that mode or not at all. This rule flows from the maxim: 'expressio unius est exclusio alterius. ' But, as was pointed out by Wills, J. , in Colquhoun vs. Brooks, 1888 (21) QBD 52 at p. 62, this maxim 'is often a valuable servant, but a dangerous master. . . ' The rule is subservient to the basic principle that courts must endeavour to ascertain the legislative intent and purpose, and then adopt a rule of construction which effectuates rather than one that may defeat these. Moreover, the rule of prohibition by necessary implication could be applied only where a specified procedure is laid down for the performance of a duty. Although Rule 52 makes an assessment obligatory before goods are removed by a manufacturer, yet, neither that rule nor any other rule, as already indicated above, as specified the detailed procedure for an assessment. There is no express prohibition anywhere against an assessment at any other time in the circumstances of a case like the one before us where no 'assessment', as it is understood in law, took place at all. On the other hand, Rule 10a indicates that there are residuary powers of making a demand in special circumstances not foreseen by the framers of the Act or the rules. If the assessee disputes the correctness of the demand an assessment becomes necessary to protect the interests of the assessee. A case like the one before us falls more properly within the residuary class of unforeseen cases. We think that, from the provisions of section 4 of the Act read with Rule 10a, an implied power to carry out or complete an assessment, not specifically provided for by the rules, can be inferred. No writs of prohibition or mandamus were, therefore, called for in the circumstances of the case".
(16) HAVING heard the learned Counsel appearing for the parties and on a reading of the various provisions of Central Excise and Salt Act, 1944 and the rules including the provisions of the Textiles Committee Act, 1963 and the textiles Committee (Cess) Rules, 1975, elaborately reproduced by the learned trial Judge in his judgment, we have come to the conclusion that the view taken by His Lordship is correct. Placing reliance on the decision of Madras high Court reported in 1978 ELT (J 57) and the decision of Supreme Court reported in AIR 1972 SC 2563 to the facts of this case and the various provisions of the Act and rules, we find no reason to differ with the finding of the learned single Judge, viz. Jayanta Kumar Biswas, J. We endorse our view in this regard in full.
(17) WE are to add that the words "as being subject to a duty of excise" in the definition of the terms "excisable goods" in section 2 (d) of the Central Excise act are only descriptive of the goods specified in the First Schedule, and have no reference to the factum of their liability to duty. In fact, it is seen that some of the rate of duty as 'nil'. It could not be contended that these goods are not 'excisable goods'. In this connection, we may also refer to section 3, which is the charging section, which provides for the levy and collection of excise duty on all excisable goods produced or manufactured in India at the rate set forth schedule, thereby showing that excisable goods in the definition in the section refer only to the description of the goods in column (2) of the First Schedule, and not to the rate of duty in column (3) of the Schedule. The exemption granted by the notification of the Central Government made on 28. 2. 1986 only exempts hosiery items from the levy of excisable duty and it does not change the nature and character of the goods as excisable goods within the meaning of the Act. The notification proceeds on the assumption that the hosiery is excisable goods. If the hosiery is not excisable goods, then there was no need or occasion for exempting the same from the levy of excise duty. We are unable to agree with the learned Counsel for the petitioner that once the hosiery is exempted from excise duty, it ceases to be excisable goods.
(18) APART from the aforesaid consideration, by and under Textiles Committee (Amendment) Act, a cess is to be levied and collected for the purpose of the Act as a duty of excise on all textiles and textile machinery manufacturing in India on ad valorem basis at the rate notified in the Official Gazette and the cess levied under the provisions of Textiles Committee Act is an independent cess having complete code and contains all the provisions relating to levy, collection, exemption and application of cess. Under Rule 4 of the Textiles Committee rules manufacturer like the petitioner No. 1 is under a duty and obligation to furnish the return in Form A (Textiles) or in Form B (Machinery), as applicable for assessment of cess. Similarly under Rule 12 of the Central Excise Rules (corresponds to old Rule every assessee is under a duty to submit to the superintendent of Central Excise a monthly return in the form specified by notification by the Board, of production and removal of goods and other relevant particulars, within ten days after the close of the month to which the return relates.
(19) PROVIDED that where an assessee is availing of the exemption under a notification based on the value of clearance in a financial year, he shall file quarterly return in the form specified by notification by the Board, of production and removal of goods and other relevant particulars, within twenty days after the close of quarter to which the return relates.
(20) THE legislative intendment underlying Textiles Committee (Amendment)Act and rules read with the preamble, aims and objects of the Act is clearly discernible. A conjoint reading of Act, Rules, Preamble, aims and objects of the act leaves no matter of doubt that the legislature intended to levy the cess under the Act in addition to excise-duty, if any payable under the Central Excise and Salt Act, 1944 and for the adjudication thereof.
(21) WE now proceed to deal with the decisions cited by Mr. Gupta, the learned senior Counsel appearing on behalf of the writ petitioner.
(22) IN the case of Members-Secretary, Andhra Pradesh State Board Water pollution vs. A. P. Rayons Ltd. , reported in AIR 1989 SC 611, the Supreme court held that the statute must be strictly construed in order to find out whether a liability is fastened on a particular industry and the subject is not to be taxed without clear words for that purpose and that every statute enacted by the Parliament must be read according to its natural construction of words. We do not for a moment dispute the aforesaid well-settled proposition of law and propose to apply the principle to the facts of the present case. As pointed out earlier, the charging section of the statute in question, unhasitantly manifests its intention that the cess payable under the Act is independent of the provisions contained in the Act of 1944 and simply because by subsequent notification, the hosiery items have been exempted from the tax under the 1944 Act for the time being, for that reason the writ petitioner cannot evade its liability under the Act.
(23) IN the case of J. K. Steel Ltd. vs. Union of India and Ors. , reported in AIR 1970 SC 1173, the Supreme Court held that in interpreting a fiscal statute the court cannot proceed to make good deficiencies if there may be any; the Court must interpret the statute as it stands and in case of doubt in a manner favourable to the tax payer. In the case before us, there is no trace of doubt that the cess payable under the Act is an independent liability and has no connection with the liability under the Act of 1944. We therefore find that the said decision does not help the writ petitioner in any way.
(24) THE learned Counsel next relied on the two judgments of the Supreme court, one in the case of Union of India and Ors. vs. Deokinandan Agarwalla, reported in AIR 1992 SC 96 and the other in the case of A. K. Roy and Ors. vs. State of Punjab and Ors. , reported in AIR 1986 SC 2160, where the Supreme court held that the Court cannot rewrite, recast or reframe the legislation for the very good reason that it has no power to legislate and the Court cannot add words to a statute or read words into it which are not there and where a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all and other modes of performance are necessarily forbidden. In the case before us, for the purpose of fastening the liability of payment of cess under the A
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ct, we are not required to add any word to the statute and the charging section itself is sufficient to indicate the clear dictate of the legislature. Therefore, those decisions do not support the writ petitioner in any way. (25) THE learned Counsel lastly relied on the decision of the Supreme Court in the case of Calcutta Jute Manufacturing Company Ltd. and Ors. vs. Commercial tax Officer and Ors. , reported in AIR 1997 SC 2920, where the Supreme Court held that the return referred to in section 10 of Bengal Finance (Sales Tax) Act, must be the full accurate return and a truncated return cannot be regarded as furnishing return. We are yet to appreciate how the said decision can be of any help to the writ petitioner. Under the provision of the statute in question, it is the duty of the writ petitioner to disclose its liability for the purpose of assessing the cess depending upon the amount manufactured by it. If the writ petitioner decides not to disclose the true picture, the respondent is free to come to it own conclusion as regards the liability of the writ petitioner on the basis of other available materials of course after giving an opportunity to the manufacturer to dispute the veracity of the materials sought to be relied upon by the respondent. We, therefore, do not find any assistance from those decisions in support of the contention of Mr. Gupta. (26) IN view of the above discussion, our answer to the question posed in the reference is as under: the answer to question has to be in affirmative. Cess payable under section 5a of the Textiles Committee Act, 1963, by a manufacturer of textiles who neither paid duty of excise under the Central Excise and Salt Act, 1944, nor submitted returns and cess under the Textiles Committee Act, can be assessed by the assessing Officer under this Act on the basis of figures obtained from source or sources other than the two alternative sources (that is the Central Excise department or the average of the cess levied during the previous two quarters)mentioned in Rule 8 of the Textiles Committee (Cess) Rules, 1975 after giving opportunity to the assessee to dispute the correctness of those figures. (27) WHILE answering the reference, we have also expressed our view that the first two questions raised before the learned Single Judge, namely, whether cess is payable under the Act only by a manufacturer of textile who is liable to pay duty of excise under the Central Excise and Salt Act, 1944 and whether the manufacturer of the hosiery goods are exempted from the payment of cess under the Act should be answered against the writ petitioner. (28) WE, therefore, even do not find any merit in the appeal preferred by the writ petitioner against the two other findings recorded by the learned Trial judge. The appeal is also therefore disposed of by dismissing the same after affirming the finding of the learned Trial Judge on those two issues. (29) IN the facts and circumstances, there will be, however, no order as to costs. Appeal dismissed.