Full Judgment
(b) That in the alternate a fresh direction be issued for securing the record of adjudication proceeding and appeal proceeding concerning to present case.
(c) That the records so procured/summoned be offered to the Applicant/Appellant for inspection.
(d) That any other relief self or direction which is think fit and proper by the Hon'ble Tribunal may also be given in favour of the Applicant/Appellant.
2. Shri R.K. Jain, the learned authorised representative has appeared on behalf of the Applicants. Shri Jain, the learned authorised representative, has pleaded that both the applications filed by the applicant are maintainable and the applicant possesses a statutory right of inspection, as their appeals are pending. Shri R.K. Jain has further pleaded that the issue involved in both the applications is similar, and as such he is arguing the matters simultaneously. Shri R.K. Jain has pleaded that in terms of the provisions of Rule 41 of the CEGAT (Procedure) Rules, 1982, the Tribunal can make such orders or give such directions as may be necessary or expedient to give effect or in relation to its orders or to prevent abuse of its process or to secure the ends of justice. Shri Jain has pleaded that this Bench should call for the records of the adjudicating authority and the Applicants should be permitted to inspect the records. Shri Jain has referred to the provisions of Section 35C of the Central Excises and Salt Act, 1944. He has turther pleaded that the correctness of thematter cannot be seen without going through the complete records, and he wants to challenge the correctness of the order. Shri Jain pleads that after the complete inspection of the records, he wants to move an application for the production of additional evidence under Rule 23 of the CEGAT (Procedure) Rules 1982. He also referred to Rule 16 of the CEGAT (Procedure) Rules, 1982 and has pleaded that in terms of Rule 16 the appellant is to attach the paper book along with the appeal or within one month of the filling of the appeal a book containing copies of documents, statements of witnesses and other papers on the file, all referred to in the orders of the departmental authorities which he proposed to rely upon at the time of hearing of the appeal, and the respondent gets a right in terms of provisions of Sub-rule (2) of Rule 16 to file a cross paper book within one month of service of the notice of the filing of the appeal on him or within two weeks of the service of the paper book whichever is later. He has pleaded that the present appeals before the Tribunal are transferred matters in terms of the provisions of Section 35P of the Central Excises and Salt Act, 1944, and as such the respondent has no right to file a paper book. The learned authorised representative has referred to a judgment of the Gujarat High Court in the case of Mahendra Mills Ltd. v. P.B. Desai, Appellate Assistant Commissioner reported in (1971) 79 ITR 52 at 58 wherein the Hon'ble High Court observed that "We find ourselves unable to agree with the contentions because the expression 'record of appeal1 is comprehensive enough to include within it the whole record of evidence on which the original assessment order was passed by the Assistant Commissioner." He has also referred to another judgment in the case of Mahendra Mills Ltd. v. P.B. Desai, Appellate Assistant Commissioner reported in (1975) 99 ITR 135 at 140 wherein the Hon'ble Supreme Court had held that the record does not mean only the record of assessment but it comprises all proceedings on which the assessment order is based. The learned authorised representative has again referred to another judgment in the case of Maharana Mills Pvt.
Ltd. v. Income Tax Officer, Porbandar 359. In the said case the Hon'ble Supreme Court had observed that the "records" contemplated by Section 35 does not mean only the order of assessment, but it comprises all proceedings on which the assessment order is based, and the Income Tax Officer is entitled for the purpose of exercising his jurisdiction under Section 35 to look into the whole evidence, and the law applicable to ascertain whether there was an error. He has also pleaded that the applicant possesses a right of appeal to Supreme Court, and has also referred to Supreme Court Rules 1966. Shri Jain has referred to Order XX(B) at pages 1058, 1059 by R.K.Jain. He has referred to Rule 4 of the Monopolies Act. He has stated that there is no indexing of the file and there are no papers as to the cross-examination of Inspector of Central Excise Shri B.D. Ranadeve conducted in May, 1977. There are also no bills, delivery challans and show cause notices in the file, and the copies of the statement of the partners. He has referred to Pages 24 and 25 of the paper book filed by the respondent which contains details of transactions. He has referred to the letter of the Central Board of Excise and Customs dated 2.8.1979. He has pleaded that the original records were with the Board, arid the same should have also been transferred to the Tribunal, as the appeal has been transferred to the Tribunal in terms of Section 35P of Central Excises and Salt Act 1944, and he wants to examine the whole record. He has objected to the filing of paper book dated 29.10.1985 by the department, and has pleaded that in terms of Rule 17 of the C.E.G.A.T. (Procedure) Rules 1982, a copy of memorandum of appeal and paper book shall be served on the other party, as soon as it is filed.
He has pleaded that the fresh paper book can only be filed with the permission of the Court. He has pleaded that the prayers made in the application should be accepted by the Tribunal, and necessary order to this effect may be passed.
3. In reply, Shri Tripathi has submitted that there is no need for inspection of records at this stage by the applicants. A Show-cause Notice was duly issued to them and the cause of action was fully made known to them. Cross-examination of witnesses was also allowed. He submitted that at the most the records which were before the Board might be called for but not the records before the Collector, since inspection of these had already been allowed. However, Shri Tripathi clarified that he had no objection to call for any records or documents from the Collector and to allow inspection of whatever documents the Tribunal directed to be shown to them. Shri Tripathi, however, submitted that the applicants should make a specific request as to the documents which they wanted to inspect, and should also satisfy the Tribunal that inspection of those documents was material to the presentation of their case.
4. As regards the paper book filed on behalf of the respondents, Shri Tripathi submitted that it had been filed in order to assist the Bench.
A Court has inherent power to take on record any papers. He would leave it to the Tribunal whether or not these papers should be taken on record.
5. In reply, Shri R.K. Jain, the learned Authorised Representative, has pleaded that the inherent powers can only be exercised in those matters where there is nothing in the statute. He has pleaded that there is merger of the order of the lower authorities in the order passed by the Higher Authority and the complete record forms part of the file. Shri Jain has also pleaded that on inspection he found that certain records were missing in the present matter. In the present matter a question of imposition of penalty is involved. All the facts relating to the case would be relevant and therefore the whole original record should be summoned.
6. After hearing both the sides and going through the facts and circumstances of the case, we would like to observe that at no stage the applicant had expressed any grievance that he had approached the lower authorities, but he was refused inspection. We have taken due note of the judgments cited by the learned authorised representative Shri R.K. Jain, as to "Record of Appeal". All the judgments cited by the learned authorised representative pertain to rectification of a mistake apparent from record. The Hon'ble Supreme Court in the case of Suraj Mal Mohata v. Visvanatha Sastry reported in 26 ITR 1, 13 had held that the assessment has to be made on all relevant materials and the evidence, and the assessee ordinarily has the fullest right to inspect the records and all documents and material that are to be used against him.
7. The applicant is certainly entitled to inspect the relevant records.
However, the Tribunal should exercise its powers in this regard only when the lower authorities, in whose custody the records are, refuse inspection to the applicants. If necessary, the Tribunal has power to issue directions to the lower authorities, as to the inspection of records in accordance with law.
8. Accordingly, we direct the lower authorities to afford inspection of records relating to this matter to the Applicants in accordance with law, subject to the respondents 'right to the exercise of privilege to refuse inspection of confidential documents'. The applicants should first invoke his right of inspection before the lower authorities. In case the lower authorities refuse to grant inspection to the applicants, they can always approach the Tribunal for necessary orders.
9. During the course of the arguments the learned authorised representative had referred to the possibility of his filing additional evidence. It is open to the Applicant to proceed in accordance with Rule 23 of the C.E.G.A.T. (Procedure) Rules 1982, if he so desires.
10. The learned Authorised Representative has opposed the filing of the paper book by the respondent. After going through the records, we would like to observe that both the matters before us are transferred matters. The appellants had filed Revision Applications under erstwhile Section 36 of the Central Excises and Salt Act. 1944. After the formation of the Tribunal the same were transferred u/s 35-P of the Central Excises and Salt Act. 1944. At the time of filing of Revision application there was no provision for the filing of a paper book. The requirement of filing of a paper book and cross paper book was laid down after the amendment of the Act. The C.E.G.A.T. (Procedure) Rules 1982 came into force with effect from 25.10.1982 vide Notification No.l/CEGAT/82, and the paper books are to be filed in terms of Rule 16 of these Rules. It is a settled law that a procedural amendment will have a retrospective effect. This was laid by the Privy Council in the case of Delhi Cloth & General Mills Co. Ltd. v. Commissioner of Income Tax reported in AIR 1927 P.C. 242 in these words, which have by classic : "While provisions of a statute dealing merely with matters of procedure may properly, unless that construction be textually inadmissible, have retrospective effect attributed to them, provisions which touch a right in existence at the passing of the statute are not to be applied retrospectively in the absence of express enactment or necessary intendment. Their Lordships can have no doubt that provisions which, if applied retrospectively, would deprive of their existing finality orders which, when the statute came into force, were final, are provisions which touch existing rights". (Extract taken from Kanga & Palkivala's The Law and Practice of Income Tax - 7th Edition - Vol. I page 7).
The Hon'ble Supreme Court in Bagchi & Co, v. C.I.T. reported in (19.51) 20 I.T.R. 33 and Kudilal Seksaria v. C.I.T. reported in (1964) 54 I.T.R. 653 had held that an amendment would be given retrospective effect and would apply to the assessment, if the amendment is purely procedural and effects the machinery for collecting the tax rather than the tax itself. (Extract taken from Kanga & Palkivala's The Law and Practice of Income Tax - 7th Edition - Vol. I page 84).
11. By filing a paper book and cross paper book both the parties would assist the court in coming to a correct conclusion. In the matters before us both the parties have filed paper books after the transfer of the proceedings to the Tribunal. In this situation it is not open to the appellants to contend that they are. entitled to file a paper book but the respondents are not entitled to do so. However, this does not mean that either party is entitled to bring on to the record inadmissible material merely by including it in his paper book. We are inclined to agree that internal correspondence between the Government of India or the Board and the lower authorities should not be brought on to the record of the present proceedings. This aspect could be gone into in detail at a later stage, if it becoms necessary.