The Madurai Bench of the Madras High Court quashed the order of the Chief Judicial Magistrate, Tiruchirappalli, which permitted the introduction of a 2023 adjudication order into an excise prosecution originally initiated in 2006, without obtaining fresh sanction.
The bench of Justice L. Victoria Gowri has observed that Section 173(5) Cr.P.C., 1973 is exclusively applicable to cases initiated based on police reports, not private complaints under the Central Excise Act, 1944. A valid sanction is essential for initiating prosecution under the Central Excise Act. The original 2006 sanction related to documents quashed by CESTAT, and the fresh adjudication order of 2023 was never presented to the sanctioning authority.
The prosecution in question involved M/s. Sree Aravind Steels Limited, represented by Managing Director Arun Shankar, along with co-accused, including Arun Shankar in a personal capacity and M. Andaperumal, General Manager of Arudra Steel Rolling Mills Pvt. Ltd. The case originated from show-cause notices issued in 2004 and 2005 and an adjudication order dated 30 December 2005, which was later quashed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Chennai in 2007. The CESTAT had held that excise duty could not be imposed on two manufacturers for the same goods and permitted the department to issue fresh notices.
Following the tribunal’s direction, fresh show-cause notices were issued in 2007, culminating in a fresh adjudication order on 9 August 2023 by the Joint Commissioner, GST, Trichirappalli. The department sought to introduce this order as evidence under Sections 294 and 173(5) of the Criminal Procedure Code (Cr.P.C., 1973), arguing its probative value.
The petitioners argued that the 2023 adjudication order did not exist when the complaint was filed and was not part of the original documents considered by the sanctioning authority in 2006. The absence of a fresh sanction renders its introduction illegal, and reliance on Section 173(5) Cr.P.C., applicable only to police reports, was misplaced. The petitioners highlighted that the new adjudication altered the nature of liability, imposing it solely on Sree Aravind Steels Limited, creating serious prejudice.
The standing counsel for the respondents conceded that Section 173(5) Cr.P.C. does not apply to private complaints under special statutes like the Central Excise Act, 1944, but contended that the document’s authenticity justified its inclusion under Section 294 Cr.P.C., allowing uncontroverted documents to be admitted.
The Court’s Findings
After a thorough review of the legal principles and the procedural history, the High Court held that allowing the prosecution to mark the 2023 order without a fresh sanction would cause irreparable prejudice to the accused and contravenes established precedents, including State of Bihar v. P.P. Sharma and Assistant Commissioner of Customs v. Athishta Rajan. Admissibility does not equate to relevancy, and a document cannot be relied upon simply because it is undisputed.
Justice Victoria Gowri emphasized that adjudication and prosecution, though independent, cannot retrospectively support each other without fresh procedural compliance.
The Madras High Court allowed the Criminal Revision Case and set aside the trial court’s order dated 18 June 2025, preventing the introduction of the 2023 adjudication order into the pending trial. However, the ruling clarified that this would not bar the department from obtaining fresh sanction and initiating appropriate proceedings under due process.
Case Details
Case Title: M/s.Sree Aravind Steels Limited Versus The Assistant Commissioner
Case No.: CRL RC(MD)No.864 of 2025 and CRL MP(MD)No.9181 of 2025
Date: 02.09.2025
Counsel For Petitioner: S.Murugappan
Counsel For Respondent: N.Dilip Kumar
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