JUDGMENT <NAME> J.

1. This appeal was dismissed by an order made by us which reads as under :

Having heard Mr. <NAME>, learned Counsel for the appellant and Mr. <NAME>, learned Counsel for the respondents, we dismiss C.A. No. J099/82 and vacate all interim orders made by this <ORG>.

We further direct that the appellant-Corporation shall release Rs. 10 lakhs in favour of the respondent within one month from today, the time of one month being fixed at the request of the appellant. The balance is required to be spread over a reasonable period so as not to inconvenience the parties. If any difficulty arises, liberty to move. Reasons will follow.

2. Here are the reasons.

3. How a public sector corporation set up to give impetus to industrial development of the country, a promise of planned economy aimed at job expansion to liquidate the curse of unemployment, and larger production helping price stabilisation acts in a manner contrary to its Raison d'etre and becomes counter-productive is aptly illustrated by the facts of this case.

4. <ORG> ('<ORG>' for short) is a corporation set up under Section 3 of the State Financial <ORG> Act, 1951. It was an instrumentality devised to provide medium and long term credit to industrial concerns inter alia Hotel Industry. Respondent M/s. <ORG> ('<ORG>' for short) is a private limited company incorporated on October 7, 1971 under the Companies Act , 1956. The object clause of the memorandum of association shows that <ORG> was incorporated mainly to carry on business of hotel, restaurent, cafe etc. The <ORG> proposed to set up <ORG> under the name and style of <ORG>. One Shri <NAME> is the promoter. After acquiring land, where the proposed <ORG> was to be set-up at Baroda, on December 7, 1977, the <ORG> approached the <ORG> for a loan of Rs. 30 lakhs and ommitting, for the time being, the correspondence exchanged between the parties, the <ORG> by its letter dated July 24, 1978 sanctioned a loan of Rs. 29.93 lakhs, on certain terms and conditions. On August 2, 1978, the respondent wrote a letter accepting the terms and conditions on which the <ORG> agreed to advance the loan. As a part of the deal, the <ORG> had to create an equitable mortgage in favour of the <ORG> for securing the loan. It is advantageous to refer at this stage, to the term bearing on the question of rate of interest that would be chargeable on the loan, as agreed to be advanced by the <ORG> to the <ORG>. It inter alia provided that the rate of interest will be 121/2% p.a. if re-finance is available from <ORG> (IDBI) at 9% p.a. otherwise it will be 13% p.a.

5. The trouble erupted when in October, 1978 two Pseudonymous letters purporting to have been written by <NAME> and <NAME> addressed to the Chief Minister, Gujarat State and Chairman <ORG>, Bombay, respectively were received making serious allegations against the promoter <NAME> about his character and creditworthiness and also pointing out that he was facing several prosecutions in various courts on account of his nefarious activities. Presumably, acting on this letter, the <ORG> who was approached for re-financing the loan addressed certain enquiries to the office of the <ORG> and then started an enquiry which led to the delay in processing the promised loan. Ultimately by its letter dated February 13, 1979 <ORG> informed the <ORG> that in view of the pending police enquiry against the Promoter <NAME>, the application for re-finance is treated as closed, leaving an option to the <ORG> to re-submit the application on receipt of satisfactory report from the concerned authorities in regard to the pending enquiry against the main promoter. By that time, the promised equitable mortgage by the <ORG> was created in favour of the <ORG>. All other documents, required to be executed by the <ORG> in favour of the <ORG> enabling it to receive the loan were also executed. However, the appellant did not disburse the loan in terms of the agreement entered into between the parties. Ultimately, after protracted correspondence, the Board of the <ORG> at its meeting held on April 20, 1979 resolved not to disburse the loan to the respondent company and the President conveyed the information of the decision to the <ORG>. There is some dispute between the parties about when the intimation about the resolution of the appellant was conveyed to the respondent but that is hardly relevant.

6. Ultimately, the respondent moved a petition under Article 226 of the Constitution in <ORG> at Ahmedabad. A learned Single Judge issued a mandamus directing the appellant to disburse the promised loan to the <ORG> forthwith in accordance with its letter of offer dated July 24. 1978 followed by the agreement dated February 1, 1979. The Corporation preferred <ORG> No. 78/81. <ORG> hearing the <ORG> agreed with the conclusion reached by the learned Single Judge and dismissed the appeal. Hence this appeal by special leave.

7. Mr. <NAME>, learned Counsel who appeared for the appellant urged that the sanctioning of the loan by the <ORG> in favour of the respondent was conditional upon the <ORG> undertaking to refinance the loan and as <ORG> declined to re-finance the loan, the <ORG> cannot be compelled by a mandamus to grant the loan. It was also incidentally urged that the dispute raised between the parties is in the realm of contract and at best the <ORG> can be charged with breach of contract for which the remedy is by way of damages or any other remedy available to the respondent for breach of contract; but, in any case, a writ of mandamus cannot be issued compelling the <ORG> to perform its part of the contract. There is no merit in either of the contentions.

8. The first contention of Mr. <NAME> appearing for the appellant is that the sanctioning of the loan by the <ORG> in favour of the respondent was conditional upon <ORG> agreeing to and undertaking to re-finance the loan and as <ORG> has declined, for the time being, to re-finance the loan, the <ORG> cannot be compelled to undertake the onerous liability of financing a huge loan to one undertaking and therefore the appellant was discharged from performing its part of the contract. Both the learned Single Judge and the Division Bench of <ORG> have concurrently held that the sanctioning of the loan by the <ORG> in favour of the respondent was not conditional upon <ORG> agreeing and undertaking to re-finance the loan. In this connection, a reference to Clauses 2 and 5 of the letter dated July 27, 1978 by the appellant to the respondent setting out the terms and conditions subject to which loan was sanctioned would be advantageous:

2. Rate of interest will be 121/2% p.a. if re-finance is available from <ORG> @ 9% p.a. otherwise it will be @ 13% p.a. Higher rate of interest at 6% over the normal rate of interest will be charged on the amount in default.

5. Commitment charge @ l%p.a, on the amount of loan not drawn out of the loan sanctioned shall be paid from the date as advised by <ORG>, if re-finance is sanctioned. In case, re-finance is not sanctioned by <ORG>, commitment charge @ 1% p.a. on the amount of loan Indrawn out of loan sanctioned shall be paid from the expiry of six months from the date of sanction.

A bare perusal of the clauses would show that the loan sanctioned by the appellant in favour of the respondent was not specifically subject to the condition upon the <ORG> agreeing and undertaking to re-finance the loan. In fact, re-financing of the loan by <ORG> had an impact on the rate of interest only. This clearly transpires from Clause 2 which provides that if re-finance is available from <ORG> at 9% p.a. the rate of interest payable by the respondent to the appellant will be 121/2% p.a. otherwise it will be 13% p.a. In Clause 5 it is stated that commitment charge at 1% p.a. on the grant of loan not drawn out of the sanctioned amount shall be paid from the date as advised by <ORG> if re-finance is sanctioned but in case re-finance is not sanctioned by <ORG> commitment charge at 1% p.a. on the amount of loan Indrawn out of the loan sanctioned shall be paid from the expiry of 6 months from the date of sanction. Thus re-financing of the loan by <ORG> was to have an impact on the rate of interest and the commitment charge and the sanctioning of the loan was not conditional upon re-finance from <ORG> available. In fact consequences of <ORG> not agreeing to re-finance loan are provided in the agreement. The Consequence was not that the appellant would be discharged from performing the agreement but it would only be entitled to higher rate of interest and liability to commitment charge from a certain date, but the agreement to advance loan would remain unaltered and binding. When these two clauses were pointed out to Mr. <NAME>, he could hardly pursue the point any more. The parties had envisaged a situation where the re-finance of the loan may not be available from <ORG>. The obligation undertaken by the appellant to sanction the loan was independent of a re-financing of loan available from <ORG>. In such situation, the first contention of Mr. <NAME> cannot be accepted.

9. It was next contended that the dispute between the parties is in the realm of contract and even if there was a concluded contract between the parties about grant and acceptance of loan, the failure of the <ORG> to carry out its part of the obligation may amount to breach of contract for which a remedy lies elsewhere but a writ of mandamus cannot be issued compelling the <ORG> to specifically perform the contract. It is too late in the day to contend that the instrumentality of the <ORG> which would be 'other authority' under Article 12 of the Constitution can commit breach of a solemn under-taking on which other side has acted and then contend that the party suffering by the breach of contract may sue for damages but cannot compel specific performance of the contract. It was not disputed and in fairness to Mr. <NAME>, it must be said that he did not dispute that the <ORG> which is set up under Section 3 of the <ORG> Financial <ORG> Act, 1955 is an instrumentality of the <ORG> and would be 'other authority' under Article 12 of the Constitution. By its letter of offer dated July 24, 1978 and the subsequent agreement dated Feb. 1, 1979 the appellant entered into a solemn agreement in performance of its statutory duty to advance the loan of Rs. 30 lakhs to the respondent. Acting on the solemn undertaking, the respondent proceeded to undertake and execute the project of setting up a 4-star Hotel at Baroda. The agreement to advance the loan was entered into in performance of the statutory duty cast on the <ORG> by the statute under which it was created and set up. On its solemn promise evidenced by the afore-mentioned two documents, the respondent incurred expences, suffered liabilities to set-up a hotel. Presumably, if the loan was not forthcoming, the respondent may not have undertaken such a huge project. Acting on the promise of the appellant evidenced by documents, the respondent proceeded to suffer further liabilities to implement and execute the project. In the back drop of this incontrovertible fact situation, the principle of promissory estoppel would come into play. <CITATION> . this Court observed as under:

The true principle of promissory estoppel, therefore seems to be that where one party has by his words of conduct made to the other a clear and unequivocal promise which is intended to create legal relations or affect a legal relationship to arise in the future, knowing or intending that it would be acted upon by the other party to whom the promise is made and it is in fact so acted upon by the other party, the promise would be binding on the party making it and he would not be entitled to go back upon it, if it would be inequitable to allow him to do so having regard to the dealings which have taken place between the parties, and this would be so irrespective whether there is any pre-existing relationship between the parties or not.

10. Thus the principle of promissory estoppel would certainly estop the <ORG> from backing out of its obligation arising from a solemn promise made by it to the respondent.

11. <NAME> & Ors. etc. v. State of Haryana & Ors. etc. . which slightly differs from the view taken by this Court in the aforementioned decision at any rate would not help the appellant because it only lays down that the principle of promissory estoppel cannot be invoked for preventing the <ORG> from discharging its functions under the law. Even then, it was held that when the officer authorised under a scheme enters into an agreement and makes a representation and a person acting on that representation puts himself in a disadvantageous position, the Court is entitled to regulate the officer to act according to the scheme and the agreement or the representation. The officer can not arbitrarily on his mere whim ignore his promise of some undefined and undisclosed grounds of necessity or changed the conditions to the prejudice of a person which had acted upon such representation and put himself in a disadvantageous position. On this point, both the decisions concur and the ratio would govern the decision in this appeal. The respondent acting upon the solemn promise made by the appellant incurred huge expenditure and if the appellant is not held to its promise, the respondent would be put in a very disadvantageous position and therefore also the principle of promissory estoppel can be invoked in this case.

12. Viewing the matter from a slightly different angle altogether it would appear that the appellant is acting in a very un-reasonable manner. It is not in dispute that the appellant is an instrumentality of the <ORG> and would be other authority' under Article 12 of the Constitution. If it be so, as held by this Court in <CITATION> . the rule inhibiting arbitrary action by the <ORG> would equally apply where such corporation dealing with the public whether by way of giving jobs or entering into contracts or otherwise and it cannot act arbitrarily and its action must be in conformity with some principle which meets the test of reason and relevance.

13. Now if appellant entered into a solemn contract in discharge and performance of its statutory duty and the respondent acted upon it, the statutory corporation can not be allowed to act arbitrarily so as to cause harm and injury, flowing from its un-reasonable conduct, to the respondent. In such a situation, the <ORG> is not powerless from holding the appellant to its promise and it can be enforced by a writ of mandamus directing it to perform its statutory duty. A petition under Article 226 of the Constitution would certainly lie to direct performance of statutory duty by 'other authority' as envisaged by Article 12.

14. <ORG> accordingly was fully justified in issuing a writ of mandamus to disburse the loan and therefore the appeal fails.


CASE NO.: Appeal (civil) 659 of 2003 PETITIONER: <NAME> RESPONDENT: Vs. <NAME> DATE OF JUDGMENT: 19/08/2003 BENCH: CJI, <NAME> & <NAME>. JUDGMENT:

JUDGMENT <NAME>, J.

The instant appeal arises out of a judgment and order passed by <ORG>, dismissing the Election Petition No.2 of 2000 preferred by the appellant, challenging the election of the respondent herein - <NAME>, the returned candidate to <ORG>.

The dispute relates to the election held in 204 Fatua Reserved Assembly Constituency (S.C.) in the State of Bihar, in the year 2000. The appellant, amongst others in the fray, was a candidate for the election as a nominee of <ORG> (U). He belongs to Scheduled Caste. The respondent, <NAME> was a nominee of <ORG> (R) claiming to be belonging to Pasi community which is one of the Scheduled Caste communities. It appears that some objections were raised regarding the nomination of the respondent <NAME> on the ground that he does not belong to Scheduled Caste community; rather he is Kurmi by caste which falls in the category of Other Backward Classes. The caste certificate furnished by the respondent before the Returning Officer was also under cloud, in respect whereof, the Returning Officer entertained grave suspicion as a result of which she lodged an FIR on the basis of which a Criminal Case has also been registered against the respondent. He was also arrested in connection with that case. However, the Returning Officer accepted the nomination paper of the respondent for contesting the aforesaid election. The election was held on 17.2.2000 and the result was ultimately declared on 26.2.2000 declaring respondent <NAME> as elected, having polled 46850 votes whereas the petitioner appellant had secured 39897 votes which was next to the highest polled in favour of the respondent.

As indicated above, the petitioner filed an election petition challenging the election of the respondent, amongst other, on the ground that he was not entitled to contest from a reserved constituency as a Scheduled Caste candidate since he is Kurmi by caste. In this light, the case of the petitioner was that the nomination paper of the respondent was wrongly accepted by the Returning Officer. More particularly, since the Returning Officer herself had initiated criminal proceedings by filing an FIR relating to the certificate furnished by the respondent, being a fabricated document. The definite case of the appellant is that the respondent is a resident of Surangpur of Jehanabad Assembly Constituency and he is the son of <NAME> who married to <NAME> and both are Kurmi by Caste. Evidence has been led to indicate that <NAME> and his brother are also married in Kurmi families. The voters list of Jehanabad Assembly Constituency was also summoned indicating the respondent as son of <NAME> and <NAME> is shown to be <NAME>'s wife. <NAME> and his brother have been shown to be two sons of <NAME>.

The case of the respondent as pleaded in the written statement is that his father <NAME>, a Kurmi by caste, had married one <NAME> at village Adai, who is Pasi by caste. The respondent and his brother are borne to the said Smt.<NAME>. The two brothers remained in village Adai with their mother at the house of their maternal uncle until they attained majority, whereafter they, along with their mother, shifted to Patna. <NAME> had been visiting their mother occasionally at village Adai. According to the respondent, in view of certain circulars issued by <ORG>, in case of an inter-caste marriage where the wife is a Scheduled Caste, the children borne out of the wedlock would be treated as Scheduled Caste. The voters list of village Adai also seems to have been filed indicating the respondent as son of <NAME> and <NAME>. So far the question of submission of caste certificate before the Returning Officer is concerned, the respondent's case is that the same was brought to him by someone who happened to be a man of the petitioner appellant. As such he has been implicated in the case of furnishing a false certificate. The original certificate issued by the Collector, <NAME> has not been challenged. Out of the four issues framed, the relevant issues with which we are concerned in the present appeal are, issues No.3 and 4 as quoted below :

"(iii) Whether the nomination paper of the sole Respondent has been improperly and illegally accepted as per the allegations made in the election petition?

(iv) What relief, if any, the petitioner is entitled to?" The main controversy under issue no.3 is undoubtedly on the question as to whether the respondent <NAME> is Kurmi by caste or is a Pasi having allegedly borne of <NAME> belonging to S.C. community. Both parties understood the issue no.3 in the same manner and have led oral and documentary evidence on the point. The oral evidence led on behalf of the petitioner is to the effect that <NAME>, the father of <NAME> is Kurmi by caste and his wife <NAME> is also a Kurmi. Some residents of village Adai have also been examined by the petitioner to state that there was no person by the name of <NAME> in that village and they denied the fact that the respondent was borne of <NAME> in village Adai. The respondent also examined several witnesses to support his case. One <NAME> has been examined as DW1, aged about 70 years, belonging to village Adai, saying that <NAME> of village Bhavanichak had some sort of affinity with <NAME> and about 50 years ago they married, out of their marriage <NAME> and <NAME> were borne, and after the birth of the second son <NAME> had severed all relationship with <NAME> and thereafter never visited the village Adai. Amongst other witnesses, some relations of <NAME> have been examined including her brother who supported the case of the respondent.

<ORG>, while dealing with the evidence, observes that the evidence which has been led by the petitioner is more of a circumstantial nature. For example, the fact that undisputedly father of <NAME> is Kurmi by caste married to <NAME> who is also Kurmi. <NAME> and his brother are also married in Kurmi families. It is also noted in the judgment that the whole story of marriage of <NAME> with <NAME>, a Pasi lady, had not been disclosed at the time of the scrutiny of the nomination paper to explain as to on what basis <NAME> claimed to be a Pasi. The caste certificate was issued even though his father is a Kurmi married to a Kurmi lady namely, <NAME>. At this stage it would be appropriate to quote some of the findings recorded by <ORG>. After observing that the petitioner appellant could not produce any direct evidence about the caste of the respondent <NAME>, it is found:

"As the election petitioner is not from the family of the respondent or his relation, so it cannot be possible to have any special knowledge regarding the caste, but he could not produce any person from the family of <NAME> or <NAME> himself who can prove that <NAME>, the Respodnent, is a Kurmi by caste through a Kurmi mother i.e. <NAME>".

(emphasis supplied) To us the above observations seems to be unsustainable. There would obviously be no occasion for the election petitioner to examine <NAME> in support of his case while challenging the election of none else but the son of <NAME> himself. A person borne in a Kurmi family, which details have been provided, would normally be taken to be Kurmi by caste. But it is only in special circumstances, as may have been provided under a circular of <ORG>, that the caste of the mother would be taken as the caste of the children, if she happens to be a Scheduled Caste, married to a non- Scheduled Caste. There is no denial of the fact that <NAME> is a Kurmi as well as <NAME>, wife of <NAME>. The story as put forward by the respondent about his caste is something which would be in the special knowledge of the respondent and <NAME> and <NAME>. There was no occasion for the appellant to examine <NAME> or any member of his family once it was given out by the appellant that <NAME> and his wife <NAME> both are Kurmi by caste. The facts of which special knowledge is with the respondent, he alone had to prove those facts by adducing the best evidence on the point of his being a Pasi by caste. It may, however, be pertinent again to quote one of the observations of <ORG>, which is as follows :

"The position of burden of proof as would be on principle of law that any fact which has been asserted by a person should be proved by him and if the same has been proved prima facie then only the burden is shifted to the adverse party to rebut the same. But such sort of shifting of burden and placing of variations remain only an academic one when both parties adduce evidence in support of their contention on the vexed issue." In the light of the above observations it is only to be decided on the basis of the evidence adduced by both the parties as to who has been able to prove one's case. It is true that the respondent has examined some witnesses belonging to village Adai including his maternal uncle to support his case but neither <NAME> nor <NAME>, both of whom are alive have been examined to prove the fact, in respect of which they alone would be the best witnesses to depose. In this connection, <ORG> has also observed thus : "Very peculiarly both the mother and father of <NAME> are alive but none of them have been cited as witness by either of the parties. In the list of witnesses <NAME> and <NAME> were cited as witnesses for the Respondent but for the reasons best known to them they have not been produced as witnesses".

It is clear that the respondent well understood the relevance and weight of the evidence of <NAME> and <NAME> who were cited as witnesses in list of his witnesses but they have obviously been withheld and not produced before the <ORG>. Respondent has not indicated any reason for their non-production. At the same time the court is led by the case of the respondent as asserted in the written statement that his father did not care of his sons after their birth and had left them. The court observes that this may be a cogent reason for not adducing the evidence of <NAME> from the side of respondent. Surprisingly, the court looses sight of the fact that despite such an averment made in the written statement <NAME> has been cited as witness of the respondent. Further so far mother is concerned, she is with the respondent and there is no reason of any kind of bad relations between the respondent and his mother <NAME>, to not to produce her. The reason imagined by the <ORG> for non-production of <NAME> will not apply to <NAME>. It is observed by the High <ORG> itself as follows: "But no explanation has been given from the side of the Respondent as to why their mother <NAME> could not be examined in the case as it has been vehemently argued from the side of the election petitioner that withholding <NAME> from being a witness brings an adverse inference against the Respondent as contemplated under Section 114 of the Evidence Act."

It may further be worthwhile to refer to some of the other observations made by <ORG>, e.g. that <NAME> and his wife <NAME> both are Kurmis but it would not mean that respondent was borne of <NAME>, which fact it is observed, is not anywhere mentioned specifically in the election petition. It is a queer observation and the approach adopted by <ORG>. There was no occasion to state further in the election petition that the respondent was borne of <NAME> out of her wedlock with <NAME> who are husband and wife and Kurmis by caste unless it is proved by the other side by any evidence that the petitioner had knowledge of the alleged marriage of <NAME> with a Pasi lady namely, <NAME> in another village namely, Adai, where <NAME> never resided nor <NAME> was ever brought to reside with <NAME> in his village. However, on the basis of untenable observation, as indicated above, <ORG> found : "So the prima facie fact regarding the case of the respondent could not be proved from the side of the election petitioner. But definitely a doubt could be created regarding the caste of the respondent as already stated above."

Strangely enough we again find yet another fragile and strange observation as follows :

"The election petitioner himself in his evidence had not denied categorically that the respondent had not been born to the womb of <NAME>. Only vague statement has been made that both father and mother of <NAME> were Kurmi by the caste."

The conclusion drawn by <ORG> that respondent was a competent person to contest from reserved constituency is accompanied with the following observation :

"Definitely, if a person is born of a Kurmi father or in a Kurmi family then the presumption goes that the child is Kurmi by caste. But here the respondent could make out a special case that, although, he has been born of a Kurmi father but mother being a Pasi, he is a Scheduled Caste and as such, a competent person to contest from the Reserved Constituency."

It is again in that context observed :

"It is true that the controversy can be well thrashed out if <NAME> and <NAME> have been examined by either of the parties."

We have already observed that there was no occasion for the petitioner appellant to examine either of them. But there is no such cogent reason for the respondent not to examine them. It is again observed :

"Then question comes of <NAME>. She had not been produced by the respondent and she is in custody of the respondent himself as per his statement during the course of evidence. No reasons have been stated as to why she has not been produced. This may cast some adverse inference against the respondent. But such adverse inference alone is not sufficient enough to hold that the respondent is not a Pasi by caste."

It is then observed that the petitioner is not proved his case to the hilt though a suspicion or doubt has been cast.

We may consider a few cases on the point of drawing adverse inference in the event of withholding of a witness. In AIR 1968 SC 1413 at 1416, <NAME> Vs. <NAME> and <ORG>., it has been held that a party who is in possession of best evidence which would throw light on the issue in controversy withholds such evidence an adverse inference under Section 114(g) of the Evidence Act ought to be drawn against such a party notwithstanding that the onus of proof may not lie on him. It is observed that a party cannot rely on abstract doctrine of onus of proof or on the fact that he was not called upon to produce such evidence. In the instant case however, the onus of proof that the respondent was Pasi by Caste due to alleged marriage of <NAME> with <NAME> in some other place was wholly within the special knowledge of the respondent.

In AIR 1974 SC 1957, <NAME> Vs. <NAME> and <NAME>., the allegation of threatening voters with divine displeasure in speech delivered in some meetings was not accepted and an adverse inference was drawn due to non-production of material witness and the notes made by him at the meeting. In yet another case in reported AIR 1964 SC 40, <NAME> Vs. <NAME>, a matrimonial dispute in which the question as to whether or not the wife had left the husband's place with the consent of husband's parents , non-production of parents of the husband led to adverse inference drawn against the husband.

In the case in hand the respondent was supposed to prove the facts within his special knowledge by adducing best evidence namely, <NAME> and <NAME>, which he failed to do. In these circumstances, <ORG> erred in observing that the appellant should have examined <NAME>.

The case of the parties is clear from their pleadings and the evidence adduced by them as indicated above. The petitioner challenged the status of respondent <NAME> as a Scheduled Caste person belonging to the S.C. community. Precisely what was indicated in support of that case is that father of <NAME> and <NAME> is <NAME> who is Kurmi by caste married to <NAME>, also a Kurmi lady. <ORG> has also observed that a person borne in a Kurmi family normally would be presumed that he is Kurmi by caste. In this background the initial burden of the petitioner would stand discharged and it would shift upon the respondent to prove his case which, in normal course of things, would be and is within his special knowledge. A case which has been set up by the respondent through his witnesses as well that his father had taken a fancy for <NAME>, a resident of village Adai, who is Pasi by caste and married her who gave birth to two children including the respondent, would normally be not in the knowledge of people in general particularly when according to the case of the respondent himself <NAME> lived in another village and she was never brought from there by <NAME>. More so, when <NAME>, a Kurmi by caste, is living with his wife <NAME>, also a Kurmi, in their village Jahanabad. The best evidence, as also according to <ORG> to prove the case of the respondent was, to produce <NAME> and <NAME> but they have been withheld after being cited as witnesses for the respondent. These facts clearly make out a case for drawing an adverse inference that in case they had been produced they would not have supported the case of the respondent. AIR 1961 SC 1316 <NAME> Vs. Custodian, Evacuee Property, Bombay, AIR 1917 PC 6 <NAME> Vs. M.D. <NAME> and Ors. and 1977 (3) SCC page 540 <NAME> Anr. Vs. The Returning Officer and Ors. may also be referred on the point.

On behalf of the respondent, the citation of certain decisions has also been furnished but those decisions would be of no help to the respondent. Reliance has been placed upon 1999 (9) SCC page 386 <NAME> Vs. <NAME>, where it has been held that a party upon whom the burden lies to prove a fact, but fails to discharge his onus, it is not open for him to bank upon the plea of non-examination of witness by the other party. The appellant, it was held, cannot be permitted to derive strength from the weakness of the case of the other party. We feel that this case would not be applicable in the facts and circumstances of the case in hand. On the other hand, the onus to prove facts within the special knowledge of respondent no. 1, would lie upon him alone to prove those facts. We have already held that best evidence of the respondent's case that his mother was a Pasi has been withheld. In this connection, we may peruse Section 106 of the Evidence Act also which reads as under:- "when any fact is especially within the knowledge of any person, the burden of proving to that effect is upon him.". Apart from the above, the appellant had also discharged his burden by proving the fact that the father of respondent No. 1 is <NAME>, a <NAME> by caste married to <NAME> also a <NAME> by caste. The natural inference in such circumstances would be that the respondent would, in normal course of events, be a <NAME> by caste. If there is anything contrary to the normal course of events, as pleaded in this case of another marriage of <NAME> in some other village namely Adai with <NAME> who never came to live with <NAME> in his village nor <NAME> ever lived there. Such facts in the special knowledge of the respondent have to be proved by him alone. The respondent was under duty to prove his case both ways namely, in view of the special knowledge of facts pleaded and again in view of the fact that the appellant had discharged his initial burden of showing that the respondent was <NAME> by caste being son of <NAME>, <NAME> married to <NAME> also <NAME> The other decision which has been referred to on behalf of the respondent is reported in AIR 1959 SC 914 Dolgobinda Paricha Vs. Nimai Charan Misra and <NAME>. It is in connection with the fact that the evidence of the brother of <NAME> that <NAME> had married her, was relevant for the purposes of relationship of one person to another since brother of <NAME>, is a person who is a member of the family or otherwise has special means of knowledge of the particular relationship. The decision is in reference to Section 50 of the Evidence Act. It may be observed that the evidence of persons who belong to village Adai including the brother of <NAME> have been examined by the respondent to establish the allegation of marriage between <NAME> and <NAME>. Undoubtedly, the evidence of brother of <NAME> would be relevant for the relationship between <NAME> and <NAME> but his evidence would not be of any help, in view of the adverse inference drawn under Section 114 (g) of the Evidence Act due to withholding of the best evidence available on the point. When the persons concerned are not coming forward to the court to depose about the alleged relationship and an adverse inference has been drawn that if they had come to the Court to depose, their evidence would have gone against the respondent, in such circumstances, there is no occasion to act upon the statement of DW (5), the brother of <NAME> or other witnesses. Reliance has also been placed on two decisions reported in AIR 1969 SC 1201 Samant N. Balakrishna etc. Vs. <NAME> and <NAME>. and 2002 (1) SCC page 160 Santosh Yadav Vs. <NAME> on the proposition that full particulars and all the material facts must be pleaded in the Election Petition. It is not understandable as to how these cases would help the respondent. The petitioner has pleaded that respondent is son of <NAME> who is <NAME> by caste and wife of <NAME> is <NAME> also a lady <NAME> by caste. It is also stated that the respondent and his brother are married with <NAME> ladies. These are the material facts relating to the plea raised by the appellant that the respondent is not a Scheduled Caste. We don't think if the respondent means to say that the petitioner should have stated in the petition that the respondent is not born of <NAME> said to be married to <NAME> in Village Adai. If at all these facts would be in the special knowledge of respondent, <NAME> and <NAME> hence not required to be pleaded in the Election Petition. It is not possible as well. In this connection, a reference may be made to a decision of this Court reported in AIR 1960 SC 770 <NAME> Vs. <NAME> and <NAME>. This case also relates to Election matter and it was held that facts which are in the special knowledge of the other party could not be pleaded by the Election Petitioner. It was found that particulars of the arrangement of hiring or procuring a vehicle would never be in the knowledge of the petitioner, such facts need not and cannot be pleaded in the petition.

The learned counsel for the respondent then submits that in fact the issue framed by <ORG> was not to the effect as to whether the respondent is a Kurmi or Pasi by caste. Rather it is to the effect whether the nomination paper of <NAME> had been improperly and illegally accepted as per allegations made in the election petition or not. In this connection it may be observed, in the background of the allegations made in the election petition, the core issue was as to whether <NAME> belongs to a Scheduled Caste community or not. Both parties led evidence on the question. Hence both sides understood the case in the same way and no party was misled due to framing of the issue no.3 as it has been framed. We may, however, consider the argument of the learned counsel for the respondent from the angle as sought to be canvassed as well, namely, the nomination paper of respondent was improperly and illegally accepted by the Returning Officer or not on the basis of the evidence on the record. In that connection we may refer to the statement of PW 3 Smt. <NAME>, Returning Officer, who was posted as Sub-Divisional Magistrate, Patna city. She has stated that as Returning Officer she had scrutinized the nomination paper of the respondent filed for Fatua Assembly Constituency. She had received some complaints about his nomination paper. She has stated that prima facie on looking into the case a doubt was created in her mind regarding its veracity. She had received such information beforehand through the District Magistrate. She had also got the matter inquired through the District Welfare Officer, <NAME>. The District Magistrate had also considered the report of the District Welfare Officer to be correct. In the above circumstances she had lodged a Report against the respondent <NAME> with the police. She had however, postponed the matter of scrutiny of nomination paper from 1.2.2000 to 2.2.2000. The next day she accepted the nomination paper of the respondent <NAME>. She has admitted that before she had lodged the FIR she was in receipt of the report of the District Welfare Officer, <NAME>. She also states that lodging of the FIR definitely goes against the candidature of <NAME>. In cross-examination she states that, according to the relevant provisions, she did not find it necessary that a caste certificate must be filed along with the nomination paper. She also states that on the date of scrutiny objectors could not produce any document or proof to the effect that <NAME> did not belong to Scheduled Caste. Amongst several objections filed against the nomination of <NAME> it is given out there that <NAME> belongs to Kurmi community and his father and mother both are Kurmis. The fact which is quite clear is that the Returning Officer had grave doubt about the veracity of the caste certificate to the extent that she lodged an FIR against the candidate namely <NAME>. In support of the suspicion entertained about the caste certificate being fabricated, she had a report from the District Welfare Officer, <NAME>. A criminal case was registered and the respondent was also arrested. It is only surprising that despite such a grave suspicion and initiation of criminal proceedings against the candidate the Returning Officer still accepted his nomination paper. She has stated that on 1.2.2000 after she had lodged the report there was lot of opposition in respect of the nomination paper of the respondent. She has admitted that the respondent was a nominee of the ruling party in the State. She postponed the matter for the next day when she accepted the nomination paper of the respondent. Going by normal conduct no prudent person would accept such a nomination paper in respect of which there is an information that caste certificate entitling to be a candidate from a reserved constituency, is suspected to be forged and fabricated supported by a report subsequently by none else but a responsible officer, namely, the District Welfare Officer, <NAME>. After taking a decision to criminally prosecute a person on the charge of filing fabricated caste certificate it goes against the normal human conduct of a prudent person who still accept such a nomination paper. The nomination if rejected, the respondent could further agitate the matter by filing an election petition. This question would not depend upon the fact as to ultimately case of which of the party would be found to be correct or false. The question is after having entertaining such a grave doubt so as to decide to criminally prosecute a person still to accept the nomination paper runs contrary to normal conduct of a prudent and responsible officer. On the above basis it can well be said without any hesitation that nomination paper of return candidate (Respondent) was improperly accepted by the Returning Officer. It ought to have been rejected by the returning officer in the background of the above facts and circumstances. Thus, examining the matter from any angle, we do not find the judgment of <ORG> sustainable.

In the result, the appeal is allowed with costs and the judgment and order passed by <ORG> is set aside, as well as the election of the Respondent to 204 Fatua Assembly Constituency of State of Bihar. <ORG> is called upon to hold election for filling up the vacancy caused by the setting aside of the election of the Respondent.

As per requirement of Section 103 of the Representation of People Act, the substance of the decision shall be intimated to <ORG> and the Speaker of <ORG> of the State of Bihar. An authenticated copy shall also be sent to <ORG> at the earliest.


ORDER

1. 1. Heard the learned counsel for the parties.

2. The appellant shall pay Rs. 10,000 as costs because of the delay of 247 days in filing these special leave petitions.

3. Delay condoned.

4. Leave granted.

5. This appeal is filed against the judgment and order dated September 20, 1999, passed by <ORG> holding that for the assessment year 1993-94 waiver of interest chargeable under Section 234B of the Income-tax Act, 1961, is restricted to 50 per cent. It is the contention of learned counsel for the appellant-Revenue that the said order is illegal and erroneous, in view of the judgment rendered by this court in <CITATION> and also the decision rendered by this court in C. A. Nos. 7966-7967 of 1996 entitled <CITATION> on December 17, 2002,  259 ITR 449.

6. As against this, learned senior counsel appearing on behalf of the respondents submitted that in the judgments rendered by this court in <NAME>'s case [2001] 252 ITR 1 as well as in <ORG> case [2003] 259 ITR 449, the court has not considered Explanation 1 under Section 234B of the Income-tax Act and, therefore, the said issue requires reconsideration.

7. In our view, after the pronouncement of the judgment in <NAME>'s case , it is not open to us to reconsider the same as it has been specifically held that <ORG> has no power to waive mandatory interest as contemplated under Sections 234A , 234B and 234C of the Income-tax Act.

8. In this view of the matter, these appeals are allowed and the impugned order passed by <ORG> is set aside. It would be open to the <ORG> to recover interest as provided under the Act. There shall be no order as to costs.


JUDGMENT <NAME>, J.

1. <ORG>, the third respondent in O.P.(M.V) No. 774/1981 before <ORG>, Ernakulam is the appellant.

2. On a perusal of the memorandum of appeal it is clear that the grounds urged there in are grounds which can be availed of only by the insured.

3. The counsel for the claimant therefore argued that the appeal was not maintainable. Dilating on this argument the counsel submitted that <ORG> was not entitled to take any defence which is not specified in Sub-section 2 of Section 96 of the Motor Vehicles Act 1939, for short, The Act . Before we consider this case of the claimant we shall briefly state the arguments advanced by the counsel for the appellant. The counsel submits that the appeal may be treated as one filed on behalf of the insured and that is possible in view of Section 110C (2 A) of Chapter VIII of the The Act. Had that not been the position there was no need for the <ORG> to allow the appellant to cross-examine the witnesses with permission, the counsel submits. He has a further case that in any event, in view of clause (2) of the conditions incorporated in the policy, the appellant has every right to take up the defence, the insured ordinarily can take in a case like this.

4. We shall now consider the argument based on Section 110C (2A) Section 110C (2A) reads:

Where in the course of any inquiry, <ORG> is satisfied that:

(i) There is collusion between the person making the claim and the person against whom the claim is made, or

(ii) The person against whom the claim is made has filed to contest the claim, it may, for reasons to be recorded by it in writing, direct that the insurer who may be liable in respect of such claim, shall be impleaded as a party to the proceeding and the insurer so impleaded shall thereupon have the right to contest the claim on all or any of the grounds that are available to the person against whom the claim has been made.

This section provides that where in the course of any enquiry <ORG> is either satisfied that there was collusion between the claimant and the person against whom the claim was made of the person aganist whom the claim was made had failed to contest the claim; then the <ORG>, for reasons to be recorded in writing, can direct that the insurer who will be liable in respect of the claim shall be impleaded as a party to the proceeding and the insurer so impleaded has the right to contest the claim on all or any of the grounds that are available to the insured.

5. This Sub-section would suggest that an order under this section enabling an insurer to contest the claim on all or any of the grounds that are available to the insured can be passed by the <ORG> only as a seqpel to the order directing impleadment of the insurer, he would pass on his being satisfied that either there is collusion between the claimant and the insured or the insured has failed to contest the claim, the counsel representing the contesting respondents submit. We are not impressed by this argument. This Sub-section in our view was introduced to safeguard the interests of the insurer which is going by Section 96(2) is not entitled to take any defence which is not specified therein. Apart from Section 96(2) an insurer had no right to get itself impleaded as a party to the action by the claimant against the insured causing the injury. This right is a statutory right. While conferring this right, Sub-section 2 of Section 96 has imposed certain restrictions in regard to the defences, the insurer can take. The insurer is not entitled to take any defence which is not specified in that Sub-section In short the only method of avoiding the liability provided for under Sub- Section 2 is setting up the defences enumerated therein. ( <CITATION> . . The restriction thus imposed on the defences made it impossible for the insurer to contest the claim not properly contested by the insured. The intention of the legislature thus is clear that the Sub-Section is meant to safe-guard the interest of the insurer. The objective of the Sub-Section could be achieved only if the insurer is allowed to contest the claim on all or any of the grounds available to the insured. However, a literal adherence to the words used in the section namely that "an insurer who may be liable in respect of such claim, shall be impleaded as a party to the proceeding and the insurer so impleaded shall thereupon have the right to contest'' would result in the insurer who had already been impleaded under Section 96(2) not getting a chance to contest the claim on all or any of the grounds available to the insured even if it is established that the insured is hand and glove with the claimant and as such not contesting the claim. A grammatical or literal interpretation of these words, in our view, would lead too manifest absurdity. In such circumstances, a construction not quite strictly grammatical or literal can be adopted. (See craies on Statute law, 17th Edn. Page 87-88). We therefore are of the view that the insurer who is already a party to the claim petition having been impleaded under Section 96(2) can also avail of this defence. Such an insurer accordingly can move the <ORG> under this Sub-section and obtain the requisite permission to contest the claim on all or any of the grounds the insured would take. If the insurer makes an application in this regard, the <ORG> shall consider the same on merits after notice to the claimant and insured and pass appropriate orders in writing enabling the insurer to contest the claim on the grounds available to the insured. In the present case there is nothing on record to show that the insurer-appellant has obtained such permission from the <ORG> and if that be so the insurer-appellant is not entitled to contest the claim on the grounds that are available only to the insured. The above argument of the learned Counsel therefore is rejected.

6. We nonetheless are constrained to consider yet another argument of the learned Counsel namely, that in any event the appellant is entitled to contest the claim raising the grounds the insured alone can raise, in view of clause (2) of the conditions incorporated in the policy. Clause (2) of the conditions incorporated in the policy. Clause (2) reads:

No admission offer promise payment or indemnify shall be made or given by or on behalf of the insured without the written consent of the company which shall be entitled if it so desires to take over and conduct in the name of the <ORG> the defence or settlement of any claim or to prosecute in the name of the <ORG> for its own benefit any claim for indemnity or damages or otherwise and shall have full discretion in the conduct of any proceedings or in the settlement of any claim and the insured shall give all such information and assistance as the company may require.

Construing an identical clause, <ORG> of this Court in <ORG> v. <NAME> (1987) (2) (KLT 817) no doubt, has observed that the said clause enables <ORG> to contest the claim on all or any of the grounds, the insured alone could raise, notwithstanding the restrictions imposed by Sub-section 2 of Section 96. This observation of <ORG> is based on a decision of <ORG> in <ORG> v. <NAME> 1974 ACJ 234. <ORG> while holding has made reference to the decision of <ORG> in <CITATION> . . On going through the following observation of this Court we arc of the view that the above observation is obiter.

There is some force in this argument of the learned Counsel for <ORG>. However, we do not go into the question wince we fell that the decision reported in <CITATION> may not be applicable to the case in hand.(emphasis supplied). In our view the decision of <ORG> does not lend support to the view taken by <ORG> which provides the basis for the above observation of <ORG>. A reference in this connection to the following observations of <ORG> in <ORG> case is profitable;

There is another ground on which the learned Solicitor General supported the contention that all defences are open to an insurer excepting those taken away by Sub-section (3). He said that before the Act came into force, an injured person had no right of recourse to the insurer and that it was Section 96(1) that made the judgment obtained by he injured person against the assured binding on the insurer and gave him a right against the insurer. He then said that being so, it is only fair that a person sought to be made bound by a judgment should be entitled to resist his liability under it by all defences which he can in law advance against the passing of it. Again, we find the contention wholly unacceptable. The statute has no doubt created a liability in the insurer to the injured person but the statute has also expressly confined the right to avoid that liability to certain grounds specified in it. It is not for us to add to those grounds and therefore to the statute for reasons of hardship....

<ORG> thereafter stated as follows:

We are furthermore not convinced that the statute causes any hardship. First, the insurer has the right, provided he has reserved it by the policy, to defend the action in the name of the assured and if he does so, all defences open to the assured can then be urged by him and there is no other defence that he Claims to be entitled to urge. He can thus avoid all hardships if any, by providing for a right to defend the action in the name of the assured and this he has full liberty to do.

<ORG> made the above observation (underlined portion of the excerpt) at a time when Section 110-C (2A) was not there. Whatever that be the positive declaration of <ORG> namely the Statute has no doubt created a liability in the insurer to the injured person but the statute has also expressly confined the right to avoid that liability to certain grounds specified in it. It is not for us to add to those grounds and therefore to the statute for reasons of hardship "disentitles the appellant to rely on clause (2) of the Insurance Policy and contend for the position that the said clause reserves its right to contest the claim on all or any of the grounds that are available to the injured. Sub-Section 2 A of Section 110-C as construed by us, entitles the insurer to contest the claim on all or any of the grounds available to the insured provided the <ORG> grants the requisite permission in terms of the said Sub-section to the insurer to take up the said defence. There is another aspect that should be borne in mind while considering this question and it is this:- The policy issued by the insurer is a policy of insurance in respect of Third party risk, arising out of use of motor vehicles, such as complies with the requirements of Chapter VIII of The Act and included unless the context requires otherwise, a cover note. The policy therefore should be one that complies with the requirements of Chapter VIII of the Act. That means any clause or condition in the policy can have force only subject to the provisions contained in Chapter VIII of the Act. Clause 2 of the policy extracted above therefore should be read and understood in the light of Sub-Section 2A of Section 110-C. This clause, to the extent to which it runs count per to the above Sub-section is liable to be ignored. It therefore follows that an insurer with the permission of the <ORG> alone can contest the claim on all or any of the grounds, the injured can raise against the claim.

In the light of what is stated above we are of the view that the appeal is not maintainable. The appeal fails. Accordingly the same is dismissed. No costs.


<NAME>, J.

1. This order shall govern the disposal of M.P. No. 1297 of 89 (<ORG> and <NAME>) and M.P. No. 682 of 1991 ( <CITATION> and 3 Ors.).

2. M.P. No. 1297 of 1989 has been filed by the petitioners against the respondents under Articles 226 and 227 of the Constitution of India seeking the relief of quashing the show cause notice Annexure-P19 being without jurisdiction and barred by limitation hence being illegal and biased. During the pendency of this petition the petitioners in M.P. No. 682 of 1991 started the manufacture of the same product which was the subject matter of the earlier petition. They, therefore, submitted a classification list for suitable classification of the Ayurvedic product 'SWAD' for treating it as an Ayurvedic preparation, whereupon the respondent No. 4, Superintendent, <ORG>, issued a show cause notice dated 8-1-1991 to the petitioner Company that why the product SWAD be not classified as confectionery instead of Ayurvedic medicine. Thereafter a corrigendum was also issued by the Superintendent, <ORG>. Then the Assistant Collector, <ORG>, Indore issued a notice of show cause to the petitioner Company as to why the product be not classified as a confectionery. The petitioner Company requested the Authorities to extend the time for submission of reply in view of the pendency of a similar petition on similar grounds before this Court. But the Assistant Collector refused to stay the proceedings. Hence a writ petition was filed by the petitioner seeking the issuance of a writ restraining the Assistant Collector, <ORG> and the Superintendent, <ORG>, Indore from taking any further action on the show cause notices Annexures P-6, P-7 and P-8 being illegal and without jurisdiction.

3. As the main petition which was pending before this Court is M.P. No. 1287 of 1989, the facts leading to this petition may be briefly stated. The petitioner <ORG> manufactures an Ayurvedic product at their factory at Niran-janpur. As a part of their preparation they manufacture a product called SWAD tablets. According to the petitioners the SWAD tablet is used as therapeutic prophylactic purposes and is an Ayurvedic product and as such the product falls under Chapter 30 of pharmaceutical products, Heading 30.03, sub-heading 3003.30. SWAD tablets are medicaments as defined in note 2(i) to Chapter 30. These tablets have been prepared in accordance with the ingredients mentioned in the authoritative text book of Ayurved called Bhavprakash. There are two commentaries on this book by well-known Ayurvedic experts, which have also been stated in the petition. The petitioner Company after taking the ingredients from the book, evolved its own formula and got it patented in the name of SWAD tablets from the Drug Controller of M.P. under the Drugs and Cosmetics Act . The formula of the tablet was filed before <ORG> Bhopal on 6-6-1986 and it was approved on 18-7-1986. The approval letter is Ex. P-2. A classification list was filed by the petitioner firm before the Superintendent, <ORG> on 25-8-1986 (Annexure-P3). On demand by the Authorities the necessary papers of purchase etc. were submitted by the petitioners, vide Annexure-P4. The licence issued by the Controller, <ORG> was also submitted on 26-9-1986 by Annexure-P5. Thereafter the Assistant Collector, <ORG> provisionally approved the classification list on 15-10-1986 under Rule 9B of the <ORG> Rules, 1944. Thereafter enquiries were made by respondents Nos. 3 and 4 under Rule 173B of the <ORG> Rules regarding the final approval of the classification list, wherein the formula of the tablet was also sought. The petitioner firm sent all the necessary details, vide Annexure P-8. As such, after making due enquiry the classification was approved by the letter dated 9-1-1988, vide Annexure P-9.

4. However, the enquiries continued and a query about the glucose sugar was made by Annexure P-10 which was replied by Annexure P-11. Again, vide Annexure P-12 the quantity of sugar was asked to which letter Annexure P-13 was sent by the petitioners. Thereafter the production of sugar syrup and its value was asked for by letter Annexure P-14. The petitioner filed reply to the said letter, vide Annexure P-15. Thereafter the Inspector of <ORG>, Range 5, took the sugar syrup and the SWAD tablet for test on 26-12-1988 and 6-2-1989, respectively vide Annexures P-16 and P-17. Other documents were also sought by the Inspector, whereupon all the necessary documents sought were supplied. As such, all through there has been no mis-statement or suppression of any material facts in relation to the process and manufacture of SWAD by the petitioner.

5. The Collector, <ORG>, respondent No. 2, issued a show cause notice under Section 11A of the <ORG> Act to the petitioner firm to show cause why the SWAD tablet be not classified under sub-heading 1704.90 relating to sugar confectionery instead of sub-heading 3003.30 relating to pharmaceutical products and why an amount of over one crore be not recovered under Rule 9(2) of the <ORG> Rules, 1944 read with Section 11A of the <ORG>s and Salt Act , 1944 and why penalty under Rules 9(2), 52A(5) and 173B(2) of <ORG> Rules be not imposed for contravention of the said Rules. The notice is Annexure P-19, which is challenged in this petition on various grounds.

6. Firstly it has been contended by the petitioners that the classification list was finally approved on 9-1-1988 after due enquiry under sub-rule (2) of Rule 173-B. The Assistant Collector acts as a quasi judicial authority. The power to modify classification list is provided in sub-rule (5) of Rule 173B. As such without modification of the classification list show cause notice for recovery under Sections 11A and 173B of the Central Excise Act and Rules, is illegal.

7. Secondly it has been stated that the classification list once approved finally cannot be received because the approval of the classification is a quasi judicial function and there is no power of review under the Act. Thirdly it has been stated that Section 11A applies to recovery of duty not paid/not levied or short paid/short levied and not to change a classification list. The- classification list can be changed only under sub-rule (5) of Rule 173B after affording an opportunity of hearing to the other party. It is only after the change of the classification list that a notice for recovery can be made.

8. Fourthly it has been contended that the duty can be recovered only prospectively after the order modifying classification list and not retrospectively.

9. On merits it has been submitted that the product is an Ayurvedic preparation and the greater proportion of glucose is no ground to hold that it is a confectionery. It has also been stated that in many medical syrups, which are known and treated as medicines, the glucose base is over 90 per cent and still they are treated as medicines. The license was obtained by the petitioners from the Drug Controller, M.P. and the license has been issued after ascertaining that the product is an Ayurvedic product. It has also been stated that as the Assistant Collector approved the classification list, the review can be made only by him and not the Collector. It has also been stated that the show cause notice is barred by limitation as Annexure P-l to Annexure P-18 clearly show that there was full disclosure of all the facts by the petitioners. It has also been submitted that the Collector has already made up his mind in respect of changing the classification of the product and, therefore, the notice, is biased.

10. The petition was resisted on the ground that the petitioners have used liquid glucose in the manufacture of their product SWAD from the very beginning but there is no mention of this in the ingredients either in their said drug licence or on the wrapper of the product. The second ground is that the weight of the tablet has been declared as 250 milligrams containing total 104 mg of Kala Namak, Sendha Namak, Nimbu Ka Sar, Kali Mirch, lira, Ajwain, Sounth, Pipla Mul and Lendi Pipal, whereas in fact each tablet of SWAD weighs 3350 mg containing the same quantity i.e. 104 mg of the said 9 Ayurvedic ingredients. The Book mentioned in the Drug licence has not been followed. As such by mis-statement and suppression of fact the petitioners have managed to classify their product SWAD as an Ayurvedic Patent or Proprietary Medicine 'with intent to evade Central Excise duty, but in fact it is not an Ayurvedic product for the following reason:

(i) Liquid glucose is an Allopathic ingredient and it has not been mentioned as ingredient in any Ayurvedic, Sidha or Unani Tibb system of medicine specified in the first Schedule of the Drugs and Cosmetics Act , 1940.

(ii) The weight of each tablet is 3.35 grams instead of 250 mgs., whereas the total weight of the Ayurvedic ingredients is only 104 mg. Thus, the overall percentage of the ingredients has come down from 42 per cent to only 33 per cent, and the percentage of sugar is 97 per cent instead of 58 per cent. As such by inclusion of such higher percentage of sugar the product has lost the characteristics of Ayurvedic medicine. As such the preparation is against the very book of Ayurvedic system which was followed by the notices. As such it has got no therapeutic or prophylactic uses. Further more no specific doses have also been mentioned.

As such the plea of the respondents is that the product SWAD has not been recognised as Ayurvedic medicine in a standard Ayurvedic work and has not been so proved by clinical trials and also has not been recognised so by the <ORG> like Director General of Health Services. It has also been stated that <ORG> (<ORG>) in an identical case against <ORG>, has held the product as a confectionery. The Deputy Chief Chemist of <ORG> has also, after visiting the factory of the petitioner and examining the goods and the process of manufacture, opined that the SWAD is a sugar confectionery. In any case the classification has to be resolved by the quasi judicial authorities themselves and, therefore, a writ under Article 226 of the Constitution does not lie. As the classification has been obtained by the petitioner by mis-statement and suppressing the material facts and the petitioner has also changed the proportion of the ingredients, therefore, the notice under Section 11A and Rule 173B is a valid notice. In any case this is not the stage wherein the <ORG> should adjudicate on the validity of the notice because the petitioner has a chance to show cause before the <ORG>.

11. M.P. No. 682 of 1991 has also been opposed on the aforesaid grounds and it has been stated by the respondents in that petition that they have filed detailed replies in M.P. No. 1297 of 1989 and those facts may be treated as reply in this petition also along with the annexures.

12. Before considering the respective contentions of the parties it is also necessary to briefly state the various rejoinders and the documents filed in M.P. No. 1297 of 1989. In the rejoinder of the petitioner dated 25-10-1989 it is stated that on the basis of the circular of Collector, Ex. P-20, it is manifest that the respondent No. 3 is biased against the petitioner. Ex. P-20 shows that the respondent No. 3 has already made up his mind before hearing the petitioner. Therefore, the objection of the respondents about the tenability of the petition cannot be looked into for this reason also. In reply to the rejoinder the respondents submitted that the show cause notice is legal because the Collector is the proper officer to modify the classification list and it could be so modified in view of the fresh facts being brought on record. Although the modification in classification has to be prospective, the differential duty for past period arising out of the wrong classification can be demanded under Section 11A .

13. Thereafter the petitioners, vide rejoinder dated 13-3-1990, submitted that on complaint of Collector <ORG> and <ORG>, the Drug Controller had issued a show cause to the petitioner firm under Section 18(a)(1) of the Drugs and Cosmetics Act , 1940 (hereinafter called the Cosmetics Act ) read with the Rules framed thereunder asking the petitioner as to why permission to manufacture the drug be not withdrawn and why all the manufacturing licenses be not suspended or cancelled. The copy of these notices are Annexure P-20A and Annexure P-21.

14. The petitioner No. 1 obtained the report of two Experts appointed by <ORG> under Rule 154(2) of the Cosmetics Rules, who were appointed by gazette notification dated 12-7-1985. The Experts have opined that the quantity of base material sugar and the preservative and binding agent liquid glucose does not affect the therapeutic value of the tablet SWAD. The Drug Controller and <ORG>, after enquiry passed an order discharging the show cause notice and held that the Drug is an Ayurvedic drug and the quantity of the sugar as against the quantity of the active ingredients does not change the nature of the Ayurvedic medicine. Annexures P-25 and P-26 are also filed which are the supplementary show cause notices dated 1-11-1989 and 31-1-1990.

15. A reply to the rejoinder was filed by the respondents wherein the order of the Drug Controller dated 19-3-1990 was challenged by <ORG> being faulty, erroneous, biased and void abinitio. It is also contended that because SWAD tablet is manufactured under the licence issued by the Drug Controller, does not prove that it deserves to be classified under Clause 30 of CET. Actually for the classification, Excise Tariff has to be considered and not the Cosmetics Act . In common parlance also the product is not known to have a curative power. The earlier averments were also reiterated along with a submission that since liquid glucose is an ingredient even if it is said to be preservative, SWAD cannot be treated as Ayurvedic medicine as defined in Section 3(h)(1) of the Cosmetics Act.

16. The petitioner gave further clarification on 9-4-1990, wherein it has been stated that Dr. <NAME> is an Expert under the Rules framed under the Cosmetics Act and the respondents have no jurisdiction to criticise the order of the Drug Controller. The place of the sale of the medicine has also been clarified whereupon the respondent again stated that the Experts appointed under Rule 154(2) of the Rules framed under the Cosmetics Act and are only for the purposes of giving consultation before grant of licence and not thereafter. The opinion is in general terms and the liquid glucose is one of the ingredients. The petitioner again reiterated their earlier stand and said that an expert can give an opinion either before issue of licence or thereafter. The opinion has been given after the test analysis report has been received. According to expert opinion liquid glucose is not an active ingredient and therefore need not be mentioned in the label. Even in respect of Allopathic drugs under Rule 96 only the contents of active ingredients are to be mentioned on the label. The Director of Allopathic Services, under the Act or the Rules can not be held to be an Expert of Ayurvedic medicines. The provisions of the various authorities stated by the petitioners and the respondents were also stated in the reply.

17. During the course of the arguments both the learned counsel for the parties have argued in accordance with their pleadings as above, because the pleadings in view of the rejoinders and replies to the rejoinders actually had become argumentative. Therefore, nothing specific was added during the oral arguments, except the synopsis filed before us. In view of the aforesaid contention of both the parties the first and crucial point which arises for determination is whether the tablet SWAD can be classified as an Ayurvedic medicine or a confectionery. For answering this question various other aspects and the provisions of the Act and the authorities cited by the parties have to be taken into consideration. However, before considering the respective arguments of the parties on this crucial issue, on merits, let us first examine whether the petitioner could approach this Court on the show cause notice itself.

18. According to the learned counsel for <ORG> this petition is not tenable because an alternative efficacious remedy by way of appeal is available to the present petitioners after decision on the show cause notice. In support of his argument the petitioners have cited the judgment of <CITATION> - AIR 1983 SC 603, wherein <ORG> has held that when an efficacious alternative remedy is available the writ petition does not lie. Same is the view taken in the case of <CITATION> . -AIR 1985 SC 330.

19. On the other hand the learned counsel for the petitioners <NAME> has placed reliance on number of authorities, including the judgment of <CITATION> - AIR 1987 SC 2186.

20. We may refer to the latest <ORG> authority wherein it has been held that although an alternative remedy may be available for challenging the impugned order by referring the question under the statutory provision to the appropriate authority, but it is well established that an alternative remedy is not an absolute bar to the maintainability of a writ petition. When an authority has acted wholly without jurisdiction <ORG> should not refuse to exercise its jurisdiction under Article 226 of the Constitution on the ground of existence of an alternative remedy. According to the petitioners the authorities cited by the <ORG> <ORG>'s case (supra) and <ORG> case (supra) do not oust the jurisdiction of <ORG> in case of availability of an alternative remedy. The first case was the case of <CITATION> - AIR 1958 SC, 86, wherein it has been held that it is a well established principle that if there are existence of requisite grounds certiorari will lie although a right of appeal has been conferred by the Statute. This rule requiring the exhaustion of statutory remedies before the writ will be granted is a rule of policy, convenience and discretion rather than a rule of law. In the same case it is also held that if an inferior <ORG> or <ORG> of first instance acts wholly without jurisdiction or patently in excess of jurisdiction or manifestly conducts proceedings before it in a manner contrary to rules of natural justice and accepted rules of procedure and which offends superior <ORG>'s sense of fair play, the Superior <ORG> may exercise its powers to issue prerogative writ of certiorari to correct the error of the <ORG> or <ORG> of first instance, even if an appeal to another inferior <ORG> or <ORG> was available. This authority was referred to in <ORG> case (supra) and <ORG> case has been followed In <ORG>'s case (supra) and the same principle has been reiterated in Dr. <NAME>'s case (supra). Now, according to the petitioners <ORG> have issued the notices challenged in the two petitions without any jurisdiction and without any basis, therefore, they can approach this <ORG> directly.

21. Another point pertaining to the limitation has also been raised and the jurisdiction of the Collector, Central Excise, under Section 11A of the Central Excise Act has been challenged on the ground that it was not a case of suppression, mis-statement of facts, fraud, collusion or contravention of the provisions of the Excise Act . As such the extended period of five years is inapplicable. For deciding both the aforesaid points pertaining to the jurisdiction of the show cause notice and availability of the limitation granted under Section 11A of the Central Excise Act, the fact of the case have to be examined and it has to be ascertained whether the petitioners by suppression of fact obtained the classification of their product and whether the product has been rightly classified by the authorities. The crucial point which falls for consideration is whether the product SWAD is an Ayurvedic preparation or a confectionery in view of the facts and circumstances of the case.

22. The basis of the challenge of the classification by <ORG> is that the product is not in accordance with the standard Ayurvedic work nor is supported by any clinical trials. The liquid glucose, which is added in the tablet is nowhere provided as an ingredient in the preparation of the Ayurvedic medicines. By adding the liquid glucose the product falls out of the ambit of the definition of Ayurvedic medicine stipulated in Section 3(h)(i) of the Cosmetics Act, 1940. Thirdly it has been stated that it does not prescribe the specific doses. The proportion of the Ayurvedic ingredients in the medicine is only 3 per cent, wheres the contents of sugar are 97 per cent. As such the curative effect, if any, of the medicine is lost and actually branding it as an Ayurvedic medicine is for the sole purpose of evading excise duty. Strong reliance has been placed on the judgment of the Full Bench of <ORG> in the case of <CITATION> (42) E.L.T. 33, wherein in the similar facts the Bench of <ORG> has held that the Halls Icemint tablets are confectionery and not an Ayurvedic Medicine. It has also been argued that the fact that the petitioner has obtained a license to manufacture the Ayurvedic medicine and the approval of the formula by the Drug Controller is of no avail. The classification has to be done according to the Central Excise Tariff and not on the basis of the license issued by the Drug Controller.

23. On the other hand it has been argued by the petitioner that the product SWAD was considered an Ayurvedic medicine on the basis of the Drug License No. 25D/24/83. The formula was approved by the Drug Controller on 18-7-1986. The classification list was thereafter filed by the petitioner on 25-8-1986. It was provisionally approved on 15-10-1985 and final approval was given on 9-1-1988. As per formula a mixture of sugar is prepared in manufacturing process. Therefore, the respondent No. 4 gave a notice on 26-11 -1987 to the petitioner stating that sugar syrup prepared during the course of manufacture is classifiable under sub-heading 1702.30. A reply was given by the petitioner to this notice on 11-2-1987 that Sugar Syrup is not excisable. Thereafter the respondent, vide letter dated 11-1-1988 asked for the details of production and value of sugar Syrup, vide Annexure P-12. The petitioners, vide Annexure P-13 gave the quantity of the sugar consumed from August 1986 to November, 1987 and the Inspector Central Excise, Range 5, took samples of sugar syrup and SWAD tablet for test on 26-12-1988 and 6-2-1989. The purchase invoices of raw material was also furnished, vide Ex. P-l 8. As such the petitioners have never refused to disclose any fact from the Authorities and acting upon approved classification list did not collect additional price from the customers on account of the excise duty now demanded.

24. It is also the case of the petitioners that the Collector Customs & Central Excise had sent complaint to <ORG> about the suppression of facts by the petitioner and obtaining the license fraudulently, whereupon <ORG> had issued a show cause notice to the petitioner firm under Section 18(a)(i) of the Cosmetics Act on the ground that the drug is misbranded and show cause notice was issued under the Rules framed, why permission to manufacture the drug be not withdrawn and why the manufacturing license be not suspended or cancelled. Along with the notice, a copy of the Drug Analysts report was also enclosed. The petitioner No. 1 obtained the report of two experts appointed by <ORG> under Rule 154(2) of the Cosmetics Act and they have opined that the quantity of base material sugar is the preservative and binding agent liquid glucose does not affect the therapeutic value of the tablet SWAD. A report was filed along with the opinion of the Experts Annexure P-22 before <ORG>. The Drug Controller, after holding the enquiry, vide Annexure P-24 passed on order in favour of the petitioner discharging the notice wherein it held that the medicine is an Ayurvedic preparation despite the presence of liquid glucose and the variation in the weight and the ratio of the glucose and the active ingredient would not change the nature of the medicine. <ORG> had no authority to challenge or criticise the order of <ORG>, which is <ORG> and an Expert competent to give a finding on the nature of a drug for which a license for manufacture has been issued.

25. In the light of the above arguments, let us first see the relevant judgments relied on the points raised before us. In the case of <CITATION> . (supra) <ORG>, New Delhi, has held that for any formulation to be considered as Ayurvedic medicine, the same should be either recognised so in a standard Ayurvedic work or should be so proved by clinical trials or should be recognised so by an authority like <ORG>. The appellant's case for considering the goods described as Halls Icemint tablets, as medicine is only based on one fact that active ingredients, namely Pudina and Eucalyptus oil are Ayurvedic in nature and these have medicinal properties. The certificate given by Dr. <NAME> is not based on first hand information and besides, being a Professor of Surgery of <ORG>, he cannot be considered as a specialist in the field of medicine. The certificate, which could be taken note of is the one issued by the competent authority, which, in the instant case could only be the <ORG>. Therefore, the case of the appellant that the product is a medicine is not established and, therefore, the <ORG> held the product as confectionery. In the aforesaid judgment the certificate of the socalled Expert Dr. <NAME> was considered and it was found that the information was based on the opinion of Dr. <NAME>, but it was not clear before the <ORG> as to who this Dr. <NAME> is and what information is supplied to Dr. <NAME>. As such the certificate is not based on the first hand information. It is also not shown whether the certificate is based on the clinical trials. The manufacturer also was not in a position to give any further details. Therefore, after considering all the facts and circumstances of the case and the contents of the product the <ORG> was of the view that the above said product could not be treated as an Ayurvedic medicine but can be classified as a sugar confectionery as it has a cooling and soothing effect on the throat as described in the literature.

26. Now, in respect of classification of goods it has been the consistent view that the general principle of interpretation of tariff entries occurring in a Taxing Statute is a commercial nomenclature and understanding between persons in the trade. But it is also a settled legal position that the said doctrine of commercial nomenclature and trade understanding should be departed from in a case where the statutory content in which the tariff entry appears, requires such a departure. As such in cases where the application of commercial meaning or trade nomenclature runs counter to the statutory context in which the said word was used then the said principle of interpretation should not be applied. Trade meaning or commercial nomenclature would be applicable if a particular product description occurs by itself in a tariff entry and there is no conflict between the tariff entry and any other entry requiring to reconcile and harmonise that tariff entry with any other entry. <ORG> has reiterated the aforesaid view in a recent case of <CITATION> - 1990 (47) E.L.T. 161. In the same judgment <ORG> has held that although it is the settled position of law that the words used in Taxing Statute have to be understood in the common parlance or commercial parlance but such a trade understanding or commercial nomenclature can be given only in cases where the word in the Tariff Entry has not been used in a scientific or technical sense and where there is no conflict between the words used in the Tariff Entry and any other entry in the Tariff Schedule. In the aforesaid case <ORG> took into consideration the various entry items and held that the calcareous stone as mentioned in ITC Schedule has to be taken in scientific and technical sense as therein the said stone has been described as of an apparent specific gravity of 2.5 or more. Therefore, the word 'marble' has to be interpreted in the scientific or technical sense and not in the sense commercially understood or as meant in the trade parlance.

27. A Division Bench of the M.P. High Court in <CITATION> (6) E.L.T. 598 (M.P.) : 1980 M.P.L.J. 479, has sought the aid of Section 3(b) of the Drugs and Cosmetics Act to consider the classification under the Central Excise Tariff. To ascertain whether a particular product is a medical preparation or not on the basis of the definition of 'drug' in Section 3(b) of the Cosmetics Act it was held that the glucose repacked by the petitioner could not be taxed under Item No. 14E of the Tariff.

28. <ORG> in the case of <CITATION> (36) E.L.T. 369A, has held that although it is well settled that generally, while interpreting the fiscal statutes, the scientific meaning of a product is not relevant but one has to consider its popular understanding or its understanding in the commerce or in the trade. But it is obvious that this trade understanding should be the understanding of those who are actually dealing with that particular product or goods. The Drugs and Cosmetics Act is a comprehensive piece of legislation which deals with drugs and provides not only for the standards of quality, misbranded and adulterated drugs but also for the safeguards for the manufacture, sale and distribution of drugs as well as cosmetics. The Act makes it abundantly clear that only those drugs which are manufactured under a valid licence issued under the Act and in compliance with its provisions can be lawfully sold, exhibited for sale or distributed. After considering the various aspects of the Act the Court was of the view that the definition of 'drug' given in the said Act is most relevant for determining its meaning in the trade. Therefore, the true and real meaning which a drug has in the trade or in commerce is the meaning given to it in the Drugs and Cosmetics Act . In this case <ORG> has also taken the view that the order of the Assessment Officer has to stand or fall on its own grounds and cannot be supplemented by affidavits.

29. Now, in the light of the aforesaid authorities it has to be seen as to how the medicine in question i.e. SWAD is known in the common parlance or in commercial use. There is not an iota of evidence to show that this product is sold as a confectionery and is commonly used as a confectionery by the consumers. In Tariff Entry 3003.30 the medicaments including those in Ayurvedic, Unani, Sidh and Homoeopathy system have been mentioned as the goods falling within that entry. Therefore, for ascertaining whether a product is an Ayurvedic product or not the facts on the record have to be perused and in the light of the decisions of <ORG> in <NAME> case (supra), <ORG>'s case (supra) and the case of <ORG> (supra), this Court has to look to the scientific and technical aspect of the product with the aid of the Cosmetics Act , 1940.

30. Now it is not indispute that the petitioners in both the petitions are manufacturing SWAD tablets and the ingredients have been taken from the Ayurvedic text books with certain modifications evolving a formula of their own. The petitioners have considered the commentaries of the scholars Dr. <NAME> and Dr. <NAME>. The Hindi translation of the original books is <NAME> and another commentary is by <NAME> of <ORG>, Lucknow. The formula so prepared with the aid of the aforesaid text books was patented and an application to <ORG> for obtaining the license for manufacture of this drug was made, which was granted to them. The classification list was filed before <ORG> which was provisionally approved and later on finally approved. Now, the objection of <ORG> is that firstly the liquid glucose, which is used in the medicine, is not an Ayurvedic ingredient and nowhere mentioned in the Ayurvedic book of medicines and the contents of the so-called curative medicines is only 3 per cent whereas the percentage of glucose 97 per cent. It has further been stated that there is deviation in the weight proportion of the active ingredients of the product and the liquid glucose has taken the product out of the purview of medicine. There is absence of dosage in the wrapper. However, it is manifest that the classification submitted by the petitioner was approved by <ORG> on the strength of the license issued by <ORG> of M.P. who has given the license after his due satisfaction that the product is an Ayurvedic product.

31. In the instant case a further development has taken place wherein <ORG> had made a complaint to the Drug Controller that the license has been wrongly issued on the grounds which have been enumerated in the show cause notice. Therefore, a show cause notice was issued under Section 18(a)(o) of the Cosmetics Act and the Rules by the Drug Controller to the petitioner and a copy of the test laboratory report was also sent with the show cause notice. In the reply the petitioners submitted that the product SWAD is for digestion it contains ingredients commonly used for creating appetite and help in digestion. To make it tasty and eatable like other medicine, the manufacturers used the sugar base. The liquid glucose is used as preservative and binding agent like other medicines just to preserve the properties of the drug and in general practise there is no need to mention about the preservatives and binding agents. In the labels of other products of the same brand which are treated as drugs, the binding agent and preservative is not mentioned. The opinion of two experts was obtained and was also submitted along with the reply. The first opinion is by the Divisional Officer, <ORG>, who is declared as an Expert and according to him the medicine used in the product is Ayurvedic medicines. According to the opinion the addition of and proportion of sugar and liquid glucose would not change the quality of the active agents in the product.

32. The Divisional Director, <NAME>, has been declared as an Expert by <ORG>, vide Gazette Notification dated 20th April, 1985 in exercise of the powers under Rule 154(2) of the Drug and Cosmetic Rules, 1945 and the other expert Dr. <NAME> has also been so declared as an Expert. According to Dr. <NAME> also liquid glucose is used in Ayurvedic medicines as preservative material and binding agent and the increase or decrease in the quantity of the binding agent or preservative does not change the nature of the medicine. In both the Expert opinions it has been said that the product is a medicine containing the Ayurvedic properties.

33. <ORG>, M.P. vide Annexure P-24 has dropped the notice and in a detailed order has considered the grievance of the Collector of <ORG>, Indore whereupon a sample of the drug was drawn by the Drug Inspector, Indore and analysed by the Government Analyst <NAME>. This report dated 13-6-1989 has not given any opinion that the Drug is of a standard quality or not, but the drug contains liquid glucose without label declaration. However, the Drug Controller agreed with the contention of the petitioner that the liquid glucose is a preservative in Ayurvedic as well in Allopathic drugs. A letter of the Director Indigenous System of Medicines Dr. <NAME>, dated 23-12-1989 was also produced, which says that liquid glucose is commonly used as preservative and binding agent and its presence has no effect on the active ingredient and the further opinion of the Expert that despite the presence of liquid glucose the character of the drug shall remain Ayurvedic, has also been considered by the Drug Controller. Finding the aforesaid opinion and the argument sound and comparing the various ingredients in <ORG> and <NAME> tablets and their preparation as compared to SWAD which are licenced as Ayurvedic medicines by the State of Maharashtra and Andhra Pradesh, the Controller of <ORG>, <NAME> discharged the notice against the petitioner and held that the product is an Ayurvedic product. As such the fact that the Drug Controller, agreeing with the opinion of the two Experts, has reiterated its earlier finding while issuing the licence of manufacture that the product SWAD is an Ayurvedic product, supports the case of the petitioner and the aforesaid fact cannot be brushed aside simply because the assessment has to be made independently in accordance with the Central Tariff.

34. It is true that the classification of the goods has to be made according to <ORG> Tariff. But as discussed above <ORG> Tariff does not specifically define the product, but speaks of the Ayurvedic preparation. As such as held by <ORG>, <ORG> and <ORG> in the aforementioned cases the Court has to resort to the provisions of the Cosmetics Act for ascertaining the nature of the product and when the experts in the field is available. It cannot be brushed aside lightly only because there is an averment that it is a confectionery. The deviations in the preparation as pointed out by <ORG> were dealt with and considered by <ORG>, Government of M.P. and there is no contrary opinion of any Ayurvedic Expert to hold that the product is simply a confectionery and not a Ayurvedic product. Even in <ORG> case (supra) decided by the <ORG>, on which much reliance is placed by the learned counsel for <ORG>, the <ORG> has considered the Expert opinion and thereafter gave a finding that the expert opinion is of no avail to the manufacture in that case because the opinion of Dr. <NAME> was a second hand information and the qualifications of Dr. <NAME> were also not known to ascertain whether he was an Expert or not, coupled with the fact that there was no clinical test of the product. In the instant case the clinical test was made of the aforesaid product and after considering the result of the clinical test and the opinion of the Experts the finding of the product being an Ayurvedic product has been given. It has already been held above that there is no evidence on record that in common parlance, the product is known as a confectionery. Therefore, the scientific and technical meaning of the product are most relevant for ascertaining whether a product is an Ayurvedic product or a confectionery.

35. <ORG>, after filing of the report of the Director. Food and Drugs, in favour of the petitioner discharging the notice issued to them have filed a rejoinder wherein it has been stated that the opinion of the Director is erroneous and should not be acted upon. We fail to understand as to how the opinion of the Experts and that of the Drug Controller can be held to be erroneous in absence of any contrary opinion of Experts being on record. Much emphasis has been laid that according to the definition of Ayurvedic preparation there is a clear interdict on the use of any ingredient than the one shown in the text and that is why the word 'only' has been used in the definition. It is manifest that the word 'only' has been used in respect of the ingredients of the product and the preservative items in a particular product cannot be treated as active ingredients. Consequently we hold that the product of the petitioner is an Ayurvedic preparation and has rightly been classified by the Assistant Collector under Item 3003.30 of the Central Excise Tariff.

36. As regards the tenability of the petition it has been strenuously argued that the petition is premature. But as discussed above the law on the point is practically settled that the <ORG> should not interfere in a matter at the stage on show cause notice as a general rule. But can always interfere when the notice is without jurisdiction, arbitrary or illegal. About invoking of the provisions of Section 11A also, it is the settled principle that the provisions of Section 11A are available to the authorities provided the assessee has been guilty of misrepresentation, fraud or suppression of fact etc. In view of the aforesaid discussion we do not find it either a case of fraud, misrepresentation or suppression of fact. The classification was done on the basis of the license issued by the Controller of Drugs, Govt. of M.P. and he has found that the product is an Ayurvedic product even after holding an enquiry on a show cause notice. <ORG> have also made enquiries as discussed above before the classification. Therefore, the extended period of five years of limitation under Section 11A is not available to the Collector, <ORG> and <ORG>. The notice Annexure P-19 in M.P. No. 1297 of 1989, is therefore, without jurisdiction and as such this <ORG> could very well entertain a petition in a case where the notice is without jurisdiction. The notice Annexure P-19 is, therefore, quashed. The notices Ex. P-6, P-7 and P-8 issued by the authorities are as a sequal of the notice issued in M.P. No. 1297 of 1989 and in view of the finding given by us that the product is an Ayurvedic medicine, these notices also cannot be allowed to stand which were issued during the pendency of the first petition. Accordingly these notices also deserve to be quashed and are accordingly quashed.

37. In the result both the petitions M.P. No. 1297 of 1989 and M.P. No. 682 of 1991 are allowed. The notices issued in the aforesaid petitions are quashed. There shall be no order as to costs.