9911796707
TMI Blog2014 (12) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... act under different contractees. It is registered under the Orissa Value Added Tax Act, 2004 (hereinafter referred to as 'the OVAT Act'). It was assessed by the Sales Tax Officer, Bhubaneswar II Circle, Bhubaneswar-opposite party no. 3 under Section 42 of the OVAT Act for the period from 10.10.2008 to 30.6.2011 vide order dated 1.10.2012 under Annexure-1 and an extra demand of Rs. 4,68,507/- was raised towards tax, interest and penalty. Being aggrieved by the order of assessment, the petitioner preferred First Appeal under Section 77 of the OVAT Act before opposite party no. 2- Deputy Commissioner of Sales Tax (Appeal), Bhubaneswar Range, Bhubaneswar-opposite party no. 2, who vide order dated 30.11.2013 allowed the appeal and held that the petitioner is entitled to get refund of Rs. 26,86,357/- as per the provisions of law. Pursuant to the said order passed in the appeal, no refund was granted to the petitioner and on 20.5.2014, the petitioner received the impugned order passed under Annexure-3 withholding the amount of refund till disposal of the Second Appeal. Hence, the present writ petition. 3. Mr. Das, learned counsel appearing on behalf of petitioner submitted that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amount later, the Commissioner may withhold the refund till final order is passed in such appeal or proceeding. Mr. Kar further submitted that if the dealer becomes entitled to the refund as a result of the appeal or further proceeding, the dealer is entitled to interest as provided under subsection (1) of Section 59 of the Act. It was further argued that Section 60(1) of the OVAT Act does not provide any opportunity of hearing before passing any order withholding the claim of refund due to a dealer. Therefore, allegation of violation of the principles of natural justice in the present case for not granting opportunity of hearing to the petitioner is not correct. 5. On rival contentions of the parties, the following questions arise for consideration by this Court. (i) Whether the impugned order passed under Annexure-3 withholding refund of Rs. 26,86,357/- which flows from the first appellate order is legally sustainable? (ii) Whether a dealer is entitled to any opportunity of hearing before passing of order under Section 60 of the OVAT Act withholding the claim of refund due to the dealer? (iii) What order? 6. To deal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot confer an absolute power on the Commissioner to withhold refund in each and every case where an order gives rise to refund is the subject matter of an appeal or further proceeding. Therefore, the Commissioner must exercise the discretion on relevant grounds and for germane reasons. Language of Section 60 (1) of the OVAT Act does not reveal that the legislative intent is to withhold refund wherever an order giving rise to refund is the subject matter of an appeal or further proceeding or other proceedings pending under the OVAT Act. Had it been so, the provisions would have been clearly enjoined that no refund shall be granted till the conclusion of the appeal or further proceeding. 11. It is needless to say that the discretion vested with the Commissioner to withhold refund due to the dealer arising out of an order passed by the quasi judicial authority must be exercised judicially as Article 265 of the Constitution enjoins that no tax shall be levied or collected except by authority of law. 12. The matter can be looked at from a different angle. Under the Scheme of the OVAT Act, a dealer need not make an application for refund arising out of the first appellate order and unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner. 15. It is needless to say that if a subordinate authority will not obey the instruction/order/circular issued by the higher authority in the hierarchy of administration, it would cause chaos in the field of administration and certainly not help in smooth functioning of administration. 16. We further notice that the impugned order has been passed without assigning any valid reason. Virtually it is a nonspeaking order. 17. Even in respect of administrative orders Lord Denning, M.R. in Breen V. Amalgamated Engg. Union (1971) 1 All ER 1148, observed: "The giving of reasons is one of the fundamentals of good administration." 18. In Alexander Machinery (Dudley) Ltd. V. Crabtree (1974) ICR 120 (NIRC) it was observed: "Failure to give reasons amounts to denial of justice". 19. The Hon'ble Supreme Court in S.N. Mukherjee -v- Union of India, AIR 1990 SC 1984, held that the recording of reasons by an administrative authority serves a salutary purpose namely; it excludes chances of arbitrariness and ensures a degree of fairness in the process of decision-making. The said purpose would apply equally to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l justice would apply. We accept the submission on behalf of the appellants that before the notified area was constituted in terms of Section 256 of the Act, the people of the locality should have been afforded an opportunity of being heard and the administrative decision by the State Government should have been taken after considering the views of the residents. Denial of such opportunity is not in consonance with the scheme of the Rule of Law governing our society. We must clarify that the hearing contemplated is not required to be oral and can be by inviting objections and disposing them of in a fair way." 28. The Hon'ble Supreme Court in the case of Dr. Rash Lal Yadav -v- State of Bihar and others, (1994) 5 SCC 267, has held as under: "The concept of natural justice is not a static one but is an ever expanding concept. In the initial stages it was thought that it had only two elements, namely, (i) no one shall be a judge in his own cause, and (ii) no one shall be condemned unheard. With the passage of time a third element was introduced, namely, of procedural reasonableness because the main objective of the requirement of rule of natural justice is to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g requirement in the statute under which the impugned action is being taken does not exclude hearing- it may be implied from the nature of the power - particularly when the right of a party is affected adversely. The justification for reading such a requirement is that the Court merely supplies omission of the Legislature. 30. This Court in the case of Dr. Sarojini Pradhan vs. Union of India and another, AIR 1988 Orissa 96, has held as under: "THE Law must, therefore, now be taken to be well settled that even in an administrative proceeding, which involves civil consequences, the doctrine of natural justice must be held to be applicable. "it cannot be disputed that refusal by the Central Government exercising its jurisdiction under S. 5 (2) involves civil consequences of considerable magnitude for the applicant for grant of mining lease. If an opportunity is afforded, the applicant may possibly convince the Central Government why approval should be accorded, to use the words of Lord Parker, to disabuse the Central Government of its impression inclining it not to accord approval. The applicant may show that the grounds on which the Central Government is not incl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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