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TMI Blog2024 (6) TMI 162X X X X Extracts X X X X X X X X Extracts X X X X ..... e given. In COMMISSIONER OF SALES TAX, UTTAR PRADESH, LUCKNOW VERSUS PARSON TOOLS AND PLANTS, KANPUR [ 1975 (2) TMI 86 - SUPREME COURT ] , the Supreme Court observed that the will of the legislature is the supreme law of the land, and demands, perfect obedience. Judicial power is never exercised for the purpose of giving effect to the will of the judges; always for the purpose of giving effect to the will of the legislature; or in other words, to the will of the law. Therefore, where the legislature clearly declares its intent in the scheme and language of a Statute, it is the duty of the Court to give full effect to the same without scanning its wisdom or policy, and without engrafting, adding or implying anything which is not congenial to or consistent with such expressed intent of the law; if the Statute is a taxing Statute. In GODREJ BOYCE MANUFACTURING COMPANY LIMITED VERSUS DY. COMMISSIONER OF INCOME-TAX ANR. [ 2017 (5) TMI 403 - SUPREME COURT ] the Supreme Court had observed that where the words of the Statute are clear and unambiguous, recourse cannot be had to principles of interpretation other than the literal rule. It further observed that it is the bounden duty and obli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d but has been left out erroneously. The matter is remitted back to the proper officer to provide opportunity of personal hearing to the petitioner and then to pass a fresh order in accordance with statutory provisions - petition allowed by way of remand. - Hon'ble Mrs. Sangeeta Chandra And Hon'ble Brij Raj Singh JJ. For the Petitioner : Atma Ram Verma For the Respondent : C.S.C. ORDER HON'BLE MRS. SANGEETA CHANDRA, J. 1. Heard Sri Rahul Agarwal alongwith Sri Utkarsh Malviya, learned counsel for the petitioner and Sri Rajesh Tiwari, learned Additional Chief Standing Counsel for the State-respondents. 2. This petition has been filed with the following main prayers:- Issue a Writ, Order or Direction in the nature of Certiorari quashing the impugned Order passed u/s 74 of the Uttar Pradesh Goods Service Tax Act, 2017 bearing Reference No.ZDO90224180025M dated 19.02.2024 issued in FORM GST DRC-1 a/w the Rectification Order bearing Ref. No.ZD0904244094478 dated 27.04.2024 issued in FORM GST DRC-08, by the Respondent no.2 (Annexure no.1). (2) Issue a Writ, Order or Direction in the nature of certiorari quashing the impugned Show Cause Notice issued to the petitioner u/ s 74 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assed in violation of the settled principles of natural justice. 6. Learned counsel for the petitioner to substantiate his argument, has read out the provisions of Section 75(4) of the Act and has placed reliance upon three judgements of Co-ordinate Benches of this Court in Writ- Tax No.1029 of 2021: Bharat Mint Allied Chemicals Vs. Commissioner, Commercial Tax others , (2022) Vol.48 VLJ 325 , decided on 04.03.2022; Writ Tax No.551 of 2023: M/s Mohini Traders Vs. State of U.P. and another , decided on 03.05.2023 and Writ Tax No.44 of 2024: M/s Mahendra Educational Pvt. Ltd. Vs. State of U.P. , decided on 05.03.2024, copies of such orders passed by Co-ordinate Benches have been collectively filed as Annexure No.9 to the writ petition. 7. Learned Counsel appearing on behalf of the State-respondents has argued that against the impugned order of assessment, the petitioner has a statutory remedy under Section 107 of the Act and all the arguments on the merits of the case, can be dealt with by the appellate authority. 8. Learned counsel for the petitioner has argued that the leading judgment of a Co-ordinate Division Bench in Bharat Mint Allied Chemicals (supra) has been relied upon in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was made by Hon'ble Supreme Court while interpreting 3rd proviso to Section 4 M(1) of the Imports and Exports (Control) Act 1947, which is reproduced below: Provided also that, where the Appellate authority is of opinion that the deposit to be made will cause undue hardship to the appellant, it may, at its discretion, dispense with such deposit either unconditionally or subject to such conditions as it may impose. 11. The aforequoted 3rd proviso of Section 4 M (1) of the Act 1947 does not contemplate any opportunity of personal hearing in contrast to the provisions of Section 75(4) of the CGST/UPGST Act, 2017 which specifically mandates for opportunity of hearing before passing the order. The counter affidavit has been filed by an Officer of the rank of Joint Commissioner, Corporate Circle Commercial Tax, Bareilly who has either not read the aforesaid judgment of Hon'ble Supreme Court or was not able to understand it and in a casual manner the counter affidavit has been filed in complete disregard to the statutory mandate of Section 75(4) of the Act 2017. 12. It has also been admitted in the counter affidavit that except permitting the petitioner to reply to the show cause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of an assessment order creating heavy civil liability, observing such minimal opportunity of hearing is a must. Principle of natural justice would commend to this Court to bind the authorities to always ensure to provide such opportunity of hearing. It has to be ensured that such opportunity is granted in real terms. Here, we note, the impugned order itself has been passed on 25.11.2022, while reply to the show-cause-notice had been entertained on 14.11.2022. The stand of the assessee may remain unclear unless minimal opportunity of hearing is first granted. Only thereafter, the explanation furnished may be rejected and demand created. 9. Not only such opportunity would ensure observance of rules of natural of justice but it would allow the authority to pass appropriate and reasoned order as may serve the interest of justice and allow a better appreciation to arise at the next/appeal stage, if required. 12. A coordinate Bench sitting at Lucknow in M/s Mahendra Educational Pvt. Ltd. (supra) has placed reliance upon the Division Bench Judgement in the case of M/s Bharat Mint Allied Chemicals (supra) and has quoted the observations made in the case of M/s Mohini Traders (supra) and o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n those covered under sub-section (1), on the person chargeable with tax. (4) The service of statement under sub-section (3) shall be deemed to be service of notice under sub-section (1) of section 73, subject to the condition that the grounds relied upon in the said statement, except the ground of fraud, or any wilful-misstatement or suppression of facts to evade tax, for periods other than those covered under sub-section (1) are the same as are mentioned in the earlier notice. (5) The person chargeable with tax may, before service of notice under sub-section (1), pay the amount of tax along with interest payable under section 50 and a penalty equivalent to fifteen per cent. of such tax on the basis of his own ascertainment of such tax or the tax as ascertained by the proper officer and inform the proper officer in writing of such payment. (6) The proper officer, on receipt of such information, shall not serve any notice under sub-section (1), in respect of the tax so paid or any penalty payable under the provisions of this Act or the rules made thereunder. (7) Where the proper officer is of the opinion that the amount paid under sub-section (5) falls short of the amount actually ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 75(2) of the Act is clear that where any appellate authority or appellate Tribunal or Court concludes that the notice issued under sub-section (1) of Section 74 of the Act is not sustainable for the reason that the charges of fraud or any willful-misstatement or suppression of fact to evade tax has not been established against the person to whom the notice was issued, the proper officer shall determine the tax payable by such person, deeming as if the notice were issued under subsection (1) of Section 73 of the Act. 18. It has been argued that sub-clauses of Section 75 of the Act relate to the procedure to be followed by the Officer after remand of the matter by the appellate authority or tribunal or the court and sub-section (4) should be read in that context and it requires that an opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty or where an adverse decision is contemplated against such person. 19. It has however been argued by the learned counsel for the petitioner that if such an interpretation is given to Section 75 of the Act and its sub clauses, it would render a situation anomalous and he has read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (10) The adjudication proceedings shall be deemed to be concluded, if the order is not issued within three years as provided for in sub-section (10) of section 73 or within five years as provided for in sub-section (10) of section 74. (11) An issue on which the Appellate Authority or the Appellate Tribunal or the High Court has given its decision which is prejudicial to the interest of revenue in some other proceedings and an appeal to the Appellate Tribunal or the High Court or the Supreme Court against such decision of the Appellate Authority or the Appellate Tribunal or the High Court is pending, the period spent between the date of the decision of the Appellate Authority and that of the Appellate Tribunal or the date of decision of the Appellate Tribunal and that of the High Court or the date of the decision of the High Court and that of the Supreme Court shall be excluded in computing the period referred to in sub-section (10) of section 73 or sub-section (10) of section 74 where proceedings are initiated by way of issue of a show cause notice under the said sections. (12) Notwithstanding anything contained in section 73 or section 74, where any amount of self-assessed tax i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n absurdity or manifest injustice. Words may be modified or varied, where their import is doubtful or obscure. But we assume the functions of legislators when we depart from the ordinary meaning of the precise words used, merely because we see, or fancy, an absurdity, or manifest injustice from an adherence to the literal meaning . 24. In Commissioner of Sales Tax versus Parson Tools and Plants , 1975 (4) SCC 22, the Supreme Court observed that the will of the legislature is the supreme law of the land, and demands, perfect obedience. Judicial power is never exercised for the purpose of giving effect to the will of the judges; always for the purpose of giving effect to the will of the legislature; or in other words, to the will of the law. Therefore, where the legislature clearly declares its intent in the scheme and language of a Statute, it is the duty of the Court to give full effect to the same without scanning its wisdom or policy, and without engrafting, adding or implying anything which is not congenial to or consistent with such expressed intent of the law; if the Statute is a taxing Statute. If the legislature wilfully omits to incorporate something of an analogous law in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the legislature is primarily to be gathered from the language used, which means that attention should be paid to what has been said, and also to what has not been said. As a consequence, a construction which requires for its support, addition or substitution of words or which results in rejection of words as meaningless has to be avoided. Courts cannot aid the legislature s defective phrasing of an Act, we cannot add or mend, and by construction make up deficiencies which are left there. It is contrary to all rules of construction to read words into a Statute unless it is absolutely necessary to do so. Principles of interpretation do not permit Courts to do so, unless the provision as it stands is meaningless or of doubtful meaning. Courts are not entitled to read words into an Act of Parliament, unless clear reason for it is to be found within the corners of the Act itself. 29. In D.R. Venkatachalam and others, etc Vs. Deputy Transport Commissioner and others , AIR 1977 Supreme Court 842 , it was observed that courts must avoid the danger of a priori determination of the meaning of a provision based on their own preconceived notions of ideological structure or scheme into w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h could not have been intended by the legislature. An intention to produce an unreasonable result is not to be imputed to a Statute, if there is some other construction available. Where to apply words literally would defeat the obvious intention of the legislature and produce a wholly unreasonable result we must do some violence to the words and so achieve that obvious intention and produce a rational construction, as per Lord Reid in Luke v. IRC (1966 AC 557), where it has been observed this is not a new problem, though our standard of drafting is such that itrarely emerges . 33. In Commissioner of Customs (Import), Mumbai Versus Dilip Kumar and Company and others , 2018 (9) SCC page 1, a Constitution Bench of the Supreme Court was interpreting an exemption clause as per customs Notification 20 of 1999, relating to concessional rate of Duty pertaining to prawn feed. The concessional duty was denied by the department to the respondent, who had imported a consignment of Vitamin E 50 powder (feed grade) on the ground that the goods under import contained chemical ingredients for animal feed, and not animal feed/prawn feed. The Supreme Court observed that in the matter of interpretati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of consequences. In applying the rule of plain meaning, any hardship and inconvenience cannot be the basis to alter the meaning of the language employed by the legislation. This is especially so in fiscal statutes and penal statutes. Nevertheless, if the plain language results in absurdity, the Court is entitled to determine the meaning of the word in the context in which it is used, keeping in view the legislative purpose. Not only that, if the plain construction leads to an anomaly or absurdity, the Court having regard to the hardship and consequences that flow from such a provision can even explain the true intention of the legislation. 35. After referring to Justice GP Singh s Principles of Statutory Interpretation and several English case laws and also judgements of the Supreme Court, the Constitution Bench in paragraph 34 of Commissioner of Customs (Import), Mumbai Vs. Dilip Kumar and Company and others , 2018 (9) SCC 1, has observed as under: In interpreting a taxing statute, equitable considerations are entirely out of place. A taxing statute cannot be interpreted on any presumption or assumption. A taxing statute has to be interpreted in the light of what is clearly expres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , or a second opportunity given to the assessee in respect of the amount which falls short of the amount, actually payable. If on service of such notice, the person chargeable with Tax pays the tax along with interest under Section 50 and a penalty equivalent to 25% of such tax, all proceedings in respect of the said notice shall be deemed to be concluded. Penalty in sub-Section (8) is equivalent to 25% of such tax as against penalty, which is payable under sub- Section (1), which is equivalent to the tax specified in the notice. Under sub-Section (9), the proper officer shall after considering the representation if any, made by the person chargeable with tax, determine the amount of tax, interest, and penalty due from such person and issue an order. Under sub-Section (10), the limitation is provided within which the proper Officer shall issue order under sub-Section (9). Under sub-Section (11), where any person is served with an order issued under sub-Section (9) and he pays the tax along with interest payable thereon under Section 50 and a penalty equivalent to 50% of such tax payable within 30 days of communication of the order, all proceedings in respect of such notice shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnment shall be granted for more than three times to a person during the proceedings. Sub-Section (6), (7), (8), (9), (10) and (11) of Section 75 relate to the Order to be passed in by the proper officer, determining the amount of tax, interest, and penalty, in conformity with the notice issued to the assessee, and also to nature of the adjudication proceedings and the limitation for concluding the same. 42. It is evident that Sub-Section (1), (2), (3), (8) and (11) deal with adjudication by the proper officer after remand either by the Appellate Tribunal or the Courts, whereas sub-Sections (4) and (5), (6), (7), (9) and (10), in Section 75 deal with assessment before the matter is taken up in appeal and remanded to the proper officer for reconsideration on merit. 43. If we take recourse to internal aids to construction of the charging Section then Sub-heading being an internal aid, can be validly referred to while determining the true purport of the words opportunity of hearing . Sub-heading of Section 75 clearly states that it describes the General Provisions relating to Determining of Tax ; then most certainly Section 75 deals with all kinds of hearings for determining tax, both ..... X X X X Extracts X X X X X X X X Extracts X X X X
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