2024(03)LCX0084

Devlok Distributors

Versus

Union of India

WRIT TAX No. - 54 of 2024 decided on 20-03-2024

Neutral Citation No. - 2024:AHC-LKO:24457-DB

Court No. - 2

Case :- WRIT TAX No. - 54 of 2024

Petitioner :- Devlok Distributors, Lko. Thru.
Partner Shri Devesh Rastogi

Respondent :- Union Of India Thru. Ministry Of
Finance (Deptt. Of Revenue ) Thru. Secy. , New
Delhi And 4 Others

Counsel for Petitioner :- Sudeep
Kumar,Avdhesh Kumar Pandey,Radhika Varma

Counsel for Respondent :- A.S.G.I.,C.S.C.

Hon'ble Vivek Chaudhary,J.
Hon'ble Om Prakash Shukla,J.

Heard Sri Sudeep Kumar, learned counsel for the petitioner and Sri Rajesh Tiwari, learned Additional Chief Standing Counsel for the State/respondents.

Learned counsel for the petitioner states that he is not pressing the Prayer No.1, at this stage with liberty to raise the same at the appropriate stage and he is only pressing the Prayer No.2 of the present petition.

Petitioner has approached this Court challenging the order dated 29.12.2023 whereby the tax is determined under Section 73(9) of the CGST/SGST Act.

Learned counsel for the petitioner submits that the said order is passed merely on the representation of the petitioner without giving any opportunity of oral hearing to the petitioner. Reliance is placed upon the judgment of this Court dated 04.03.2022 passed in Writ Tax No.1029 of 2021 (Bharat Mint and allied Chemicals Vs. Commissioner Commercial Tax and others). In Paragraph-5 following questions are framed and the findings of the same are given in Paragraphs-15, 16,17 & 18.

"Question

The two question involved in this writ petition are as under

(i) Whether opportunity of personal hearing is mandatory under Section 75(4) of the CGST/UPGST Act 2017 ?

(ii) Whether under the facts and circumstances of the case the impugned adjudication order has been passed in breach of principle of natural justice and consequently it deserves to be quashed in exercise of powers conferred under Article 226 of the Constitution of India?"

15. Article 226 of the Constitution of India confers very vide powers on High Courts to issue writs but this power is discretionary and the High Court may refuse to exercise the discretion if it is satisfied that the aggrieved person has adequate or suitable remedy elsewhere. It is a rule of discretion and not rule of compulsion or the rule of law. Even though there may be an alternative remedy, yet the High Court may entertain a writ petition depending upon facts of each case. It is neither possible nor desirable to lay down inflexible rule to be applied rigidly for entertaining a writ petition. Some exceptions to the rule of alternative remedy as settled by Hon'ble Supreme Court are as under:-

(i) Where there is complete lack of jurisdiction in the officer or authority to take the action or to pass the order impugned.

(ii) Where vires of an Act, Rules, Notification or any of its provisions has been challenged.

(iii) Where an order prejudicial to the writ petitioner has been passed in total violation of principles of natural justice.

(iv) Where enforcement of any fundamental right is sought by the petitioner.

(v) Where procedure required for decision has not been adopted.

(vi) Where Tax is levied without authority of law.

(vii) Where decision is an abuse of process of law.

(viii) Where palpable injustice shall be caused to the petitioner, if he is forced to adopt remedies under the statute for enforcement of any fundamental rights guaranteed under the Constitution of India.

(ix) Where a decision or policy decision has already been taken by the Government rendering the remedy of appeal to be an empty formality or futile attempt.

(x) Where there is no factual dispute but merely a pure question of law or interpretation is involved.

(xi) Where show cause notice has been issued with preconceived or premeditated or closed mind.

16. The above principles are supported by the law laid down by Hon'ble Supreme Court in the case of Himmatlal Harilal Mehta v. State of Madhya Pradesh, AIR 1954 SC 03,Collector of Customs v. Ramchand Sobhraj Wadhwani, AIR 1961 SC 1506, Collector Of Customs & Excise ,Cochin & Ors. vs A. S. Bava, AIR 1968 SC 13, Dr. Smt. Kuntesh Gupta vs Management Of Hindu Kanya Mahavidyalaya, L.K. Verma v. HMT Ltd. and anr., (2006) 2 SCC 269, Paras 13 and 20, M.P. State Agro Industries Development Corpn. Ltd. & Anr. vs. Jahan Khan (2007) 10 SCC 88 para 12, Dhampur Sugar Mills Ltd. v. State of U.P. and others (2007) 8 SCC 338, BCPP Mazdoor Sangh Vs. NTPC (2007) 14 SCC 234 (para 19), Rajasthan State Electricity Board v. Union of India, (2008) 5 SCC 632 (para 3), Mumtaz Post Graduate Degree College Vs. University of Lucknow,(2009) 2 SCC 630 (para 22 and 23), Godrej Sara Lee Limited v. Assistant Commissioner (AA), (2009) 14 SCC 338. 14, Union of India v. Mangal Textile Mills (I) (P) Ltd., (2010) 14 SCC 553 (paras 6,7,10 and 12), Union of India v. Tantia Construction (P) Ltd., (2011) 5 SCC 697, Southern Electricity Supply Co. of Orissa Ltd. v. Sri Seetaram Rice Mill, (2012) 2 SCC 108 (paras 79, 80, 81, 82,86,87 and 88), State of M.P. Vs. Sanjay Nagaich (2013) 7 SCC 25 (para 34,35,38,39), State of H.P. vs. Gujarat Ambuja Cement Ltd., (2005) 6 SCC 499 (para 11 to 19), Star Paper Mills Ltd. Vs. State of U.P. and others, JT (2006) 12 SC 92, State of Tripura vs. Manoranjan Chakraborty, (2001) 10 SCC 740 para 4; Paradip Port Trust vs Sales Tax Officer and Ors. (1998) 4 SCC 90, Feldohf Auto & Gas Industries Ltd. Vs. Union of India (1998) 9 SCC 710; Isha Beebi Vs. Tax Recovery Officer (1976) 1 SCC 70 (para 5); Whirlpool Corporation Vs. Registrar of Trademarks (1998) 8 SCC 1; Guruvayur Devasworn Managing Committee Vs C.K. Rajan (2003) 7 SCC 546 (para 67, 68), Oryx Fisheries Pvt. Ltd. Vs. Union of India & Others (2010)13 SCC 427 (Paras 27 to 38), Mangilal Vs. State of M.P. (1994) 4 SCC 564 (Para 6), Siemens Ltd. VS. State of Maharashtra (2006) 12 SCC 33 (para 9 & 11), Kaikhosrou (Chick) Kavasji Framji of Indian Inhabitant Vs. Union of India (2019) 20 SCC 705 (para 59) and judgments of this Court in Writ Tax No. 255 of 2012 (M/s Shree Bhawani Paper Mills Ltd. Vs. State Of U.P. and Another) decided on 10.09.2015, M/s. Rapti Commissions Agency Vs. Union of India (2010) 1 AllLJ. 710 :(2009) 244 ELT 8 and Oudh Sugar Mill Vs. State of U.P. (2015) 3 AllLJ 774 (para 27).

17. For all the reasons aforestated, the impugned order dated 9.11.2021 under Section 74 of the Act for the tax period April (year 2019-20) can not be sustained and is hereby quashed.

18. Liberty is granted to the respondents to pass an order afresh in accordance with law, after affording opportunity of personal hearing to the petitioner."

Learned Additional Chief Standing has raised an objection that the said order is passed under Section 75(4) of the CGST/UPGST Act, 2017 which contains the general heading relating to the provisions for determination of tax. The Court in the said judgment has settled the principle that while determining the tax opportunity of personal hearing is required. The Court has also referred a large number of judgments in the said judgment wherein repeatedly the said principle has been confirmed.

In the present case also tax is determined against the petitioner under Section 73(9) of the CGST/SGST Act.

In view thereof, the petitioner is entitled for an opportunity of hearing before determination of any tax even under Section 73(9) of the CGST/SGST Act.

Thus, the impugned order dated 29.12.2023, is hereby set aside. The matter is remanded back to the appropriate authority to pass a fresh order after giving opportunity of personal hearing to the petitioner.

The writ petition is allowed.

Order Date :- 20.3.2024
Arjun/-