APEX COURT’S SOFT STANCE ON REVENUE OFFICERS APPEAL

[Dr. Sanjiv Agarwal]

In CHANDRA PRAKASH MISHRA VERSUS FLIPKART INDIA PRIVATE LIMITED AND ORS. - 2022 (6) TMI 203 - SUPREME COURT;  appellant preferred a civil appeal against Allahabad High Court order in a matter concerning Value Added Tax (VAT). [FLIPKART INDIA PVT. LTD. VERSUS CHANDRA PRAKASH MISHRA AND OTHERS - 2016 (8) TMI 1340 - ALLAHABAD HIGH COURT; M/S FLIPKART INDIA PVT. LTD VERSUS STATE OF U.P. & OTHERS - 2016 (5) TMI 386 - ALLAHABAD HIGH COURT].

The appellant (Deputy Commissioner, Commercial Taxes, Noida) was aggrieved by order by Allahabad High Court in a petition filed by respondent against ex parte order passed by him enforcing recovery proceedings.

At high court, the writ petitioner questioned the recovery proceedings, as taken up against it pursuant to the ex parte provisional assessment order passed by the appellant in his capacity as the Assessing Authority. In response to the said writ petition, it was pointed out on behalf of the department that an application made by the writ petitioner for registering the changed address had already been rejected on 02.09.2014 and, therefore, ex parte order had rightly been passed after taking due steps for service of notice.

The High Court found that the ex parte order was passed against the writ petitioner without proper service of notice. The facts were taken note of that, according to the writ petitioner, it had shifted its place of business from Noida to Ghaziabad, which was very much in the knowledge of the department in view of the applications made and other communications addressed by it. There was a suggestion on behalf of the State as regards service of notice at Ghaziabad but, that service was also not taken as sufficient by the High Court after its interpretation of the requirements under the rules.

The High Court, therefore, set aside the ex parte assessment order dated 15.12.2015 and quashed the recovery proceedings. The High Court also set aside the order dated 02.09.2014, rejecting the writ petitioner’s application for registration of the change of place of business and directed the Registering Authority to process the application made by the writ petitioner on 05.12.2013 for change of place of business after permitting the writ petitioner to deposit the requisite fees.

Further, the High Court found that a huge amount to the tune of Rs. 49,82,01,250/- had been withdrawn by the department from the writ petitioner’s account without authority of law. Hence, the Deputy Commissioner, Commercial Taxes, Range-II, Noida was directed to refund the said amount together with interest as per Section 40 of the UP VAT Act after adjusting the admitted tax.

Not only this, the High Court proceeded to express its opinion that the impugned actions, leading to ex parte orders/proceedings without proper service of notice, were of deliberate attempt on the part of the department against the interests of the writ petitioner; and the Assessing Authority adopted unfair tactics in getting the service effected in gross violation of the applicable rules.

The High Court, therefore, imposed costs to the tune of Rs. 2,00,000/-, to be paid by the department to the writ petitioner, and left it open for the Commissioner, Commercial Tax, Lucknow to institute an inquiry and to fix responsibility on the erring officer for recovery of the amount of costs.

On appeal to Supreme Court, the court observed that at time of drawing up assessment orders, appellant had no other registered address of assessee on record. Therefore, his action of passing ex parte assessment orders could not have been termed as being deliberate or wanting in good faith. The High Court seemed to have taken a sterner view of matter, which was not required in given set of facts and circumstances as mistakes or omissions can’t be considered as malicious. Therefore, the remarks and observations by the High Court against appellant were directed to be expunged by the Apex Court.

Further, it was held that there was no necessity of stretching the matter too far and passing further orders for imposition of costs and for departmental actions with other comments regarding competence of the appellant to discharge quasi-judicial functions.

The Apex Court also ordered that the remarks and observations against the appellant in the impugned orders were to be expunged; and the questioned parts of the impugned orders were annulled and set aside. The appeal was thus allowed.