AJMAL MIAN, C.J.---(1) This appeal is directed against the order, dated 12-12-1988 passed by a learned Single Judge in Suit No. 131 of 1986 dismissing the appellant's C.M.A. No.885 of 1986 which was filed under Order 39, Rules 1 and 2, C.P.C.
2. The brief facts leading to the filing of the above appeal are that appellant, which is a private limited company, is running a textile mill wherein it manufactures, inter alia, cotton yarn. The appellant's textile mill under subsection (4) of section 3 of the Central Excise and Salt Act, 1944 (hereinafter referred to as the Act) read with Capacity Duty Cotton Yarn Rules, 1969 (hereinafter referred to as the Rules), with effect from 1968 or thereabout, was assessed on the basis of capacity. The appellant impugned the above levy through Writ Petition No.538 of 1969 wherein upon appellant's stay application an order, dated 14-10-1969 was passed, the operative portion of which reads as follows: --- "We would, in the circumstances of the present case, not like to pass an order of the similar type passed in other cases because this case surely presents features altogether different. Moreover, we are of the opinion that it will not be in the national interest at large to pass an order which the petitioners are not able to comply with, resulting in the total stoppage of the production. It is for these reasons that we direct the sort of arrangement which was acted upon by the Department would continue while the controversy was pending before the Review Board. Before the Review Board the petitioners were required to pay Excise Duty in instalments at the rate of about Rs.27,000.
We, therefore, direct that the petitioners shall pay the Excise Duty payable by them upto date in the total sum of the instalments at the rate fixed by the Department. They shall have time of one month to do so. They shall also be charged the Excise Duty, etc. At the old rate on the actual goods lying at the factory at present. They shall, however, be entitled to lift the goods as and when they wish to do so on payment of duty on the quantity lifted. So far as the new production is concerned, the arrangement would be the same as was acted upon in the Department while the controversy was pending before the Review Board. This obviously means that they will not be changed Excise Duty separately on the new productions and when lifted.
If there are any arrears to be paid in respect of the fabric manufactured by the petitioners the direction is the same with the necessary variations, The petitioners shall be permitted to run the mill and to clear the goods from the factory premises in compliance with this order and this order disposes of the Miscellaneous Application No. 1028 of 1969."
The above petition was dismissed on 31-12-1970 and the judgment which is reported in PLD 1971 Kar.
333. After that the appellant filed petition for leave namely, Petition No.K-7 of 1971 in which, inter alia, by an order passed in October and then on 20-1-1971 the above quoted interim order of the High Court was made applicable. The Hon'ble Supreme Court eventually dismissed the petitioner's appeal in 1983 maintaining the judgment of the High. Court PLD 1983 SC 358. After that the respondent issued notices dated 28-8-1983, 3-10-1985, 7-10-1985, 9-10-1985, 19-11-1985 and 23-11- 1985 calling upon the appellant to pay the outstanding balance amount of the excise duty. The appellant instead of making payment of the above amount which was Rs.83,36,455.56 as per respondent's notice dated 20-8-1983, filed the aforesaid suit for declaration and permanent injunction, in which the appellant obtained status quo orders, dated 28th May, 1986 and 28th August, 1986 and thereby restrained the respondent from recovering the amount under the impugned notices. The above application had come up for hearing before the learned Single Judge, who by his order under appeal vacated the above status quo order on the ground that the stay against the recovery could have only operated for a period of six months in view of Rule 4-A of Order 39, C.P.C. The appellant being aggrieved by the above order has filed the present appeal.
3. A Division Bench of this Court had issued a pre-admission notice to the respondents in response to which Mr. Nazar Hussain Dhoom has put in appearance and has filed counter-affidavit alongwith certain documents.
4. In support of the above appeal Mr. Mansoor Ahmad Khan, learned counsel for the appellant has vehemently contended that Rule 4-A of Order 39, C.P.C. Which is pari materia with clause 4-A of Article 199 of the Constitution, can be pressed into service only if the due in respect of which stay was obtained was lawfully due and that since in the instant case the recovery has been sought in respect of the amount which relate to the period prior to 10 years, the amount cannot be said to be lawfully due as Rule 10 of the Central Excise Rules, 1944 provides limitation of 10 years. It has further been contended by him that the period of 10 years provided in Rule 10 is absolute and no relaxation can be made because of the pendency of the civil case or grant of stay order.
5. The above contention seems to be devoid of any force. As pointed out hereinabove that the respondents were restrained first by the High Court and then by the Supreme Court from realising the excise duty on the basis of the capacity tax during the pendency of the above writ petition in the High Court and the appeal in the Supreme Court. Rule 10 relied upon by Mr. Mansoor Ahmad Khan has no application for the aforesaid reason and secondly the respondent Department had raised demand for the amount prior to the expiry of 10 years, but the same was not enforced because of the aforesaid interlocutory order passed by the High Court and the Hon'ble Supreme Court. Even otherwise, the above submission of Mr. Mansoor Ahmad Khan is not tenable, as Rule 4- A of Order 39, C.P.C. Will be applicable in all the cases where a recovery of any Government dues has been stayed. The above Rule 4-A cannot be by passed merely on the ground that a plaintiff contends that the dues are not lawful.
Mr. Nazar Hussain Dhoom, learned counsel for the respondents, has pointed out that in the plaint no plea as to the limitation has been raised and that the appellant has filed an application before the learned Single Judge for amending the plaint for raising the above plea. It is not necessary to go into the above question the appeal has no merits and is, therefore, dismissed in limine. These are the reasons in pursuance of short order of even date.