Sunil Enterprises vs Commissioner Commercial Tax

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2023 Supreme(All) 2638

IN THE HIGH COURT OF ALLAHABAD
SAUMITRA DAYAL SINGH, RAJENDRA KUMAR - IV, JJ.
M/S Sunil Enterprises - Petitioner
Versus
Commissioner Commercial Tax and Another - Respondents
WRIT TAX NO. - 730 OF 2023.
Decided On : 29-05-2023

Advocates appeared:
For the Petitioner: Ajay Kumar Yadav
For the Respondent: C.S.C.

Headnote:(A) U.P. GST Act, 2017 - Section 75(4) - Adjudication order passed without granting opportunity of hearing to the petitioner - Rules of natural justice flouted - The adjudicating authority passed an order before the scheduled date for reply and hearing, which was impermissible under the Act. (Paras 6-10)

(B) Judicial fairness and requirements of justice - Writ Court intervened to ensure compliance with natural justice principles and remitted the matter for fresh adjudication, ensuring adequate opportunity for the petitioner. (Para 10)

Facts of the case:
The petitioner challenged an adjudication order dated 31.5.2021 where the impugned order was deemed invalid as it was passed before the date set for the petitioner’s reply and hearing. The first notice was issued on 03.4.2021, and subsequent notices set hearing dates in June 2021. (Paras 2, 5)

Findings of Court:
The court found that the proceedings violated the principles of natural justice, leading to the conclusion that the order needed to be set aside. The matter was remitted for fresh consideration, ensuring that the petitioner receives adequate opportunity for defense. (Paras 8-10)

Issues: The primary issues addressed were whether the adjudication order was valid considering the failure to allow the petitioner adequate opportunity for hearing and compliance with the rules set out in the statute. (Paras 3, 6)

Ratio Decidendi: The court emphasized the necessity of following natural justice principles in adjudicatory processes and determined that the premature order issuance violated these principles, thus warranting intervention. (Paras 7-9)

Result: Writ petition allowed; the order dated 31.5.2021 set aside and the matter remanded for fresh adjudication.

Table of Content
1. the procedural timeline of notices and orders. (Para 2 , 5)
2. appealability and issues such as expired limitation. (Para 3 , 4 , 8)
3. violation of natural justice in administrative actions. (Para 6 , 7 , 9)
4. remedy provided by the court for procedural fairness. (Para 10)
5. order to set aside and ensure compliance. (Para 11 , 12)

JUDGMENT

Heard Sri Ajay Kumar Yadav learned counsel for the petitioner and Sri Ankur Agarwal learned Standing Counsel.

2. Challenge has been raised to the adjudication order dated 31.5.2021 passed by the Deputy Commissioner, State Tax, Sector-10 Prayagraj with reference to ZD0904210095997 against the petitioner.

3. In the first place, the above order was appealable. Then, period of limitation to file that appeal has expired.

4. Despite the above two objection raised by the learned Standing Counsel, there is something more fundamental and critical both to the rights of the petitioner as also to the general scheme of the U.P. GST Act, 2017 and its implementation that commends us to entertain this petition.

5. Upon hearing learned counsel for parties, it is undisputed that the first notice of the above SCN/Statement reference issued to the petitioner is dated 03.4.2021. The impugned order has been passed on 31.5.2021 whereas again undisputed last notice issued to the petitioner, in those proceedings was for the date fixed 08.6.2021 for reply and, 10.6.2021 for personal hearing.

6. Much before the arrival of those dates, impugned order came to be passed and uploaded as has thus been served on the petitioner. Neither on the general rule of natural justice applicable to these proceedings nor in the context of section 75(4) of the Act, the course adopted by the adjudicating authority, was permissible.

7. Plainly, rules of natural justice have been flouted, absolutely. Once date had been fixed and communicated to the petitioner both for the purpose of filing written reply and for the purpose of oral hearing, no adjudication order may have been passed before that date arrived.

8. In view of the above satisfaction reached, in the undisputed facts of the present case, preliminary objections raised by the learned Standing Counsel are overruled.

9. Rule of fairness must prevail to ensure that the needs and requirement of justice are met. To ensure due compliance, writ Court may always and in the present facts, does feel compelled to interfere.

10. Accordingly the order dated 31.5.2021 is set aside. Matter is remitted to the adjudicating authority to pass fresh order strictly in accordance with law, necessarily involving adequate opportunity of hearing being granted to the petitioner, both for the purpose of filing written reply as also of personal hearing. That order may be passed recording adequate reasons to deal with the objections that may be raised by the petitioner.

11. Writ petition is allowed.

12. Let the Registrar Compliance communicate this order to the Commissioner, Commercial Tax, U.P. Lucknow to ensure that such practices are done away in real time.

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