2023 (10) TMI 220 - HC - Indian Laws

Validity of assessment order passed in terms of Section 3 of the provisions of Water (Prevention and Control of Pollution) Cess Act, 1977 - no opportunity of hearing was granted - principles of natural justice - HELD THAT - The assessment orders do not indicate any opportunity of hearing being granted to the petitioner. The assessment orders are also bad in law as the same does not record any reason whatsoever in determining the quantum of cess against the petitioner. In the Act and the provisions, although there is no specific provision for opportunity of hearing prior to passing of the assessment orders, it is fairly well settled that any order more so which is expropriatory in nature has to adhere to the principle of natural justice, even if not specifically provided as also explained by the Supreme Court in the case of M/S. DHARAMPAL SATYAPAL LTD. VERSUS DEPUTY COMMISSIONER OF CENTRAL EXCISE, GAUHATI OTHERS 2015 (5) TMI 500 - SUPREME COURT . Thus on the face of the assessment orders, there is a violation of principle of natural justice. The submission of the counsel for the respondent that the appeal provided under Section 13 of the 1977 Act, in fact is a post decisional hearing cannot be accepted for the sole reason that Section 13 of the Act by the very word used in the statute is an appeal against an order of assessment and cannot be termed as post decisional hearing as is argued by the counsel for the respondent. The assessment orders have been passed in violation of principle of natural justice and are also an unreasoned order, cannot be sustained and thus on that limited ground the assessment orders as well as the appellate order are quashed - Petition disposed off.

Summary

Issues Involved:
Violation of principles of natural justice in assessment orders under Water (Prevention and Control of Pollution) Cess Act, 1977.

Summary:
The petitioner, an industry consumer liable to pay cess under the Cess Act, challenged assessment orders passed against them for two periods without being granted any opportunity of hearing or a basis for determining the liability. The petitioner argued that the assessment orders were passed without adherence to natural justice principles, leading to the filing of a writ petition. The respondent contended that the appeal lies before the National Green Tribunal and that the appeal under Section 13 is a post-decisional hearing. The petitioner argued against the availability of an alternative remedy, citing precedents to support the claim.

The Court analyzed the provisions of the Cess Act, emphasizing the importance of natural justice in expropriatory orders. It noted that the assessment orders lacked any basis for assessment and did not grant the petitioner an opportunity of hearing. Despite the absence of a specific provision for a pre-assessment hearing, the Court held that natural justice principles must be followed, as established in previous judgments. The Court rejected the argument that the appeal under Section 13 is a post-decisional hearing, emphasizing that it is an appeal against an assessment order.

Consequently, the Court quashed the assessment orders and the appellate order on the grounds of violating natural justice principles and being unreasoned. The assessing authority was given the liberty to pass a fresh order in compliance with the law. The writ petition was disposed of accordingly.