2013 (2) TMI 657 - HC - VAT and Sales Tax

Eligibility certificate under section 4A of the U.P. Trade Tax Act denied on the ground that one Member of Secretary Level Committee did not agree with the majority view - Held that - As the petitioner has not been afforded opportunity of hearing before passing the impugned order dated April 22, 1992, it is liable to be quashed. Accordingly, the writ petition is allowed and the impugned order dated April 22, 1992, is quashed. The opposite-parties are directed to re-consider the case of the petitioner afresh, after giving personal opportunity of hearing and pass appropriate orders, in accordance with law. As the matter is lingering since 1991, we hope and trust that appropriate orders will be passed expeditiously.

Summary

Issues:
1. Eligibility certificate under section 4A of the U.P. Trade Tax Act not granted due to disagreement in the Secretary Level Committee.
2. Violation of principles of natural justice in passing the impugned order dated April 22, 1992.

Analysis:
1. The controversy in the writ petition revolves around the petitioner's application for an eligibility certificate under section 4A of the U.P. Trade Tax Act. The petitioner established a new unit for manufacturing vanaspati as per the State Government's industrial development scheme. Despite recommendations from the District Level Committee and a favorable majority view in the State Level Committee, the Secretary Level Committee did not grant the eligibility certificate due to a difference of opinion. The court intervened and directed the issuance of a provisional certificate, emphasizing the importance of majority opinion in such matters.

2. The crux of the second issue lies in the violation of principles of natural justice in the proceedings leading to the impugned order dated April 22, 1992. The petitioner contended that they were not given a fair hearing before the Secretary Level Committee's decision. The Additional Chief Standing Counsel argued that the subsequent order was passed in compliance with the court's directive. The court delved into the concept of natural justice, emphasizing the audi alteram partem rule, which mandates that no one should be condemned unheard. The court cited legal precedents highlighting the importance of affording individuals a fair opportunity to present their case before any adverse decision is made against them.

3. The court elucidated that natural justice principles are crucial when quasi-judicial bodies adjudicate disputes or civil consequences are at stake. The evolution of natural justice concepts was discussed, emphasizing that even administrative orders with civil consequences must adhere to these principles. Legal precedents were cited to underscore the requirement of a just, fair, and reasonable procedure, free from arbitrariness. The court referenced the apex court's stance on the pervasive processual potency of article 14, stressing the need for just and non-discriminatory procedures.

4. In light of the legal principles discussed, the court found that the petitioner was indeed deprived of the opportunity of a fair hearing before the impugned order was passed. Consequently, the court quashed the order dated April 22, 1992, directing the opposite parties to re-examine the petitioner's case, ensuring a personal opportunity of hearing and lawful decision-making process. The court emphasized the need for expeditious resolution of the matter, considering the prolonged duration of the case since 1991.