Could a statutory provision be modified, amended or altered by an executive order?

PJ/Case Law/2014-15/2150

Case:- M/s POLYPLEX CORPORATION LTD Vs JOINT SECRY. FINANCE AND OTHERS

Citation:- 2014-TIOL-605-HC-ALL-CX

Brief facts:- The short question raised before this Court was that petitioner had been denied rebate on export of goods by relying on restrictions relating to period etc. imposed by an executive order, i.e., Circular No. 354/70/97-CX dated 13.11.1997, copy whereof had been placed on record as Annexure-9 to writ petition.

Appellant’s contentions:- It was contended that in the Statutory Order/Notification No. 19/2004-C.E. (N.T.) dated 6.9.2004, there was no such restriction of limitation and a statutory order issued in exercise of power under Rule 18 of Central Excise Rules, 2002 (hereinafter referred to as "Rules, 2002) could not had been altered, amended, modified or efficacy thereof could not be extended by issuing an executive order. Therefore, it was held that the respondents in proceeding to decline the claim for rebate in Central Excise by relying on Circular dated 13.11.1997 had acted wholly illegally. In substance, it was stated that a statutory provision cannot be modified, amended or altered by an executive order.

Respondent’s contentions:- Sri Shukla , learned counsel appearing for respondents, could not dispute that as a matter of legal proposition, a statutory order, rule or regulation could not be altered, amended or modified by mere an executive order, but he submitted that Central Government possess power to issue Circulars also, which in absence of any otherwise provision, were binding.

Reasoning of judgment:- The Hon’ble Judge held that the above argument of learned counsel appearing for respondents would not help him for the reason that by means of Circular in question, Central Board of Excise and Customs had revised the procedure, which was to be followed in respect to acceptance of proof of exports, though the procedure was already prescribed in Notification dated 6.9.2004 and, therefore, the question of revising procedure for such proof touching upon the matter already covered by Notification dated 6.9.2004 did not arise for the reason that an executive order, laying down something otherwise than what was prescribed in the Notification would not be permissible in law. It was well established that an executive order could not prevail over the statutory rules. Mere executive decision could not authorize the authorities concerned to do something which was not otherwise permitted under statutory rules. It was well settled that an executive order could not prevail over statutory rules.

In Indra Sawhney and others Vs. Union of India and others, 1992 (Suppl) 3 SCC 217 the Apex Court held that though the executive orders could be issued to fill up the gaps in the rules if the rules were silent on the subject but the executive orders could not be issued which were inconsistent with the statutory rules already framed. In Laxman Dundappa Dhamanekar and another Vs. Management of Vishwa Bharata Seva Smithi and another, JT 2001 (8) SC 171 also the same view was taken.

In K. Kuppusamy and another Vs. State of T.N. and others, 1998 (8) SCC 469 the Court said that statutory rules could not be overridden by executive orders or executive practice and merely because the government had taken a decision to amend the rules did not mean that the rule stood obligated. So long as the rules were not amended in accordance with the procedure prescribed under law the same would continue to apply and would had to be observed in words and spirit. In Chandra Prakash Madhavrao Dadwa and others Vs. Union of India and others, 1998 (8) SCC 154 also the Apex Court expressed the same view holding that the executive orders could not be conflicted with the statutory rules.

In view of above exposition of law and considering the facts and circumstances of the case, the orders impugned in this writ petition could not sustain. The writ petition was allowed. Impugned order dated 9.9.2011 was hereby quashed. Respondent no. 4 was directed to re-consider the claim of petitioner with regard to rebate in central excise on the import of goods in question in the light of Notification dated 6.9.2004 and ignoring Circular dated 13.11.1997.

Decision:- Writ petition was allowed.

Comment:- The analogy drawn from the case is that though the executive orders could be issued to fill up the gaps in the rules if the rules were silent on the subject but the executive orders could not be issued which were inconsistent with the statutory rules already framed. Also, so long as the rules were not amended in accordance with the procedure prescribed under law, the same would continue to apply and would had to be observed in words and spirit.

Comments

PJ/Case Law/2014-15/2150

Post a Comment

Query