S.S. Chadha, J.@mdashOne of the contentions raised in this petition under Article 226 of the Constitution is that the show cause notice dated September 30, 1986 and the addendum thereto dated March 17, 1987 both issued by respondent No. 4 for the alleged contravention of the Act and the Rules is bad, as ex-facie, there is no jurisdiction to issue the said show cause notice and the addendum thereto the petitioners who was in no way connected with Duncan Agro Companies Ltd. during the relevant period thus there was no liability whatsoever under the Act or the Rules as alleged in the said show cause notice.
2. The allegations made in the show cause notice are that it appears from the facts and circumstances of the case as stated in the statement of facts enclosed that the said manufacturers, Directors and Senior Executives of the companies listed thereafter in the show cause notice, have been evading large amounts of excise duty livable on cigarettes and thereby contravened the provisions of Rules 9(1), 52, 52A, 53 and 225 of the Central Excise Rules, 1944 inasmuch as :
"In particular, Shri Gouri Prasad Goenka, Chairman of M/s. Duncan Agro Industries Limited, with the active participation and assistance of Shri Banwarilal Jhunjhunwala, Shri Amit Sen Gupta, Shri P. K. Bose and Shri N. K. Jain, working in various capacities of Senior Executives in DAIL, Shri S. S. Chandalia, Shri R. K. Agarwal, (late) Shri P. S. Menon, Shri T. C. Ghosh of the four companies mentioned the para 2(ii) above and Shri S. R. Guharoy, the then factory manager and authorised Central Excise representative at Biccavolu factory had devised procedures for generating cash and income and for the suppression of assessable values with the fraudulent intent of evading payment of appropriate duty and jointly implemented such procedures through the above said four companies viz. FDL, ESD, TTPL and SMPL."
3. Further allegations are made that the said manufacturers, inter alia, Shri B. L. Jhunjhunwala had suppressed the facts relating to the assessable values with intent to evade duty and Therefore, it appears that the extended period of five years can be invoked in this case for demanding duty. The show cause notice is issued as to why penalty should not be imposed on them under the provisions of Rules 9(2), 52(A)(5), 210 and 226 of the Central Excise Rules, 1944. In the counter-affidavit, it is admitted that the petitioner Shri B. L. Jhunjhunwala joined the service of M/s. Duncan Agro Industries Ltd. on April 1, 1984 as Senior Manager (Finance). The show cause notice has been issued for the period September, 1981 to February, 1983. It is further stated in the counter-affidavit that the petitioner was Senior Executive prior to April 1, 1984 in a front company of M/s. Duncan Agro Industries Ltd. with Tabac Traders Pvt. Ltd. The stand taken in the counter-affidavit is that the petitioner is liable as alleged in the show cause notice because he was involved in the violation of the provisions of the Act and the Rules by the Company even prior to that date as he was a Senior Executive of front company wholly owned by M/s. Duncan Agro Industries Ltd. and Therefore, he was directly connected.
4. The allegations in the show cause notice (extracted above) are restricted to the evasion that Shri Gauri Prasad Goenka, Chairman of M/s. Duncan Agro Industries Ltd. with the active participation and Assistance of Shri Banwarilal Jhunjhunwala etc. working in various capacities of Senior Executive in M/s. Duncan Agro Industries Ltd. In other words, the show cause notice proceeds on the basis that Shri B. L. Jhunjhunwala was a Senior Executive in M/s. Duncan Agro Industries Ltd. between the period under the show cause notice (i.e. September 1981 to February 1983). The admitted fact is that the petitioner joined on April 1, 1984 though the petitioner claims that he joined on August 1, 1984. It is well-settled that public orders cannot be explained in the affidavit. In
"The second equally relevant matter is that when a statutory functionary makes an order based on certain ground, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit of otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court an account of a challenge, get validated by additional grounds later brought out. We may here draw attention to the observations of Bose J. in
Public orders publicly made, in exercise of a statutory authority cannot be construed in the light of Explanations subsequently given by the officer making the order of what he..... or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the acting and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself.
Orders are not like old wine becoming better as they grow older."
5. The other grounds raised in this petition are common to that raised in C.W.Ps. 1039 and 1708 of 1987. For the reasons recorded therein, the other grounds of challenge are repealed. We have, however, no hesitation in quashing the impugned show cause notice insofar as the petitioner is concerned on the limited ground. There will be no order as to costs.
