Allahabad High Court
M/S Dev Priya Industries Pvt. Ltd. ... vs Cess Appellate Committee,U.P. ... on 4 October, 2023
Author: Pankaj Bhatia
Bench: Pankaj Bhatia
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH ?AFR Neutral Citation No. - 2023:AHC-LKO:63539 Court No. - 8 Case :- WRIT TAX No. - 195 of 2023 Petitioner :- M/S Dev Priya Industries Pvt. Ltd. Meerut Thru. Environment,Health,Safety Manager Himanshu Yadav Respondent :- Cess Appellate Committee,U.P. Pollution Control Board,Lko. And 3 Others Counsel for Petitioner :- Samita Chitranshi Counsel for Respondent :- A.S.G.I.,Ashok Kumar Verma Hon'ble Pankaj Bhatia,J.
1. Heard Ms. Samita Chitranshi, learned counsel for the petitioner, Sri Ashok Kumar Verma, learned counsel appearing on behalf of the respondent nos. 2 and 3 and perused the material brought on record.
2. The present writ petition is being disposed of with the consent of the parties as the preliminary issue raised before this Court pertains to not adherence of principles of natural justice.
3. The facts in brief are that the petitioner claims to be running an industry, which consumes water and is liable to pay cess in terms of the provisions of Water (Prevention and Control of Pollution) Cess Act, 1977 (hereinafter referred as Cess Act). The case of petitioner was that in terms of the provisions as contained in Section 3 of the 1977 Act, the petitioner was submitting the returns with regard to the consumption of water, however, without following the mandatory provisions as required under Section 3, assessment orders came to be passed against the petitioner on 08.03.2013 & 04.03.2015 assessing the liability against the petitioner for the period 01.05.2010 to 31.03.2012 and 01.04.2012 to 31.08.2014, respectively.
4. It is argued by the counsel for the petitioner that the said assessment orders were passed in pursuance to provisions contained in the Cess Act, however, neither any opportunity of hearing was granted before passing the assessment order nor any basis for determining the liability was indicated in the assessment orders, which is on record as Annexure No. 2 to the writ petition and is also under challenge in the present proceedings. It is further argued that on the basis of the assessment orders, which do not disclose any reason whatsoever and also on the face of it, is without affording any opportunity of hearing, was challenged by the petitioner by preferring an appeal under Section 13 of the said Act before the appellate Tribunal constituted under the Act. It is further argued that before the appellate authority specific ground with regard non grant of any opportunity of hearing or any material based upon which the assessment orders were passed and also pleaded that the fact that no reasons for passing the assessment orders were indicated, the appeal deserved to be allowed, however, the appellate authority although recorded said submission, did not deal with the same while deciding the appeal, as such, said two assessment orders and orders in appeal are being challenged by the petitioner by way of filing the present writ petition.
5. The counsel for the respondent argues that against the appellate order passed under Section 13 of the Cess Act, 1977, an appeal lies before the National Green Tribunal by virtue of Section 16(d) of the National Green Tribunal Act, 2010 and, as such, the petitioner should be relegated to avail the alternative remedy under the said Act. He further argues that in terms of the provisions of 1977 Act, the appeal provided under Section 13 is in fact a post decisional hearing and thus, submission of the counsel for the petitioner that no opportunity of hearing was granted at the time of the assessment order merits rejection on that count also as the petitioner was admittedly heard at the appellate stage.
6. In response to the preliminary objection raised by the counsel for the respondent with regard to the availability of alternative remedy, the counsel for the petitioner argues that it is fairly well settled that where the orders impugned are in violation of principle of natural justice or without jurisdiction, the availability of the alternative remedy is not an absolute bar. She places reliance on the judgment of the Supreme Court in the case of Whirlpool Corporation v. Registrar of Trademarks, Mumbai and Ors. - (1998) 8 SCC 1. She thus argues that preliminary objection with regard to the availability of alternative remedy should be rejected. She further places reliance on the judgment of the Supreme Court in the case of Tin Box Company, New Delhi Versus CIT, New Delhi (2001) 9 Supreme Court Cases 725, wherein the Supreme Court came down heavily on the assessment order being passed without granting an opportunity of hearing and the same were held to be bad in law.
7. In the light of submissions made herein above, this Court is to decide the validity of the impugned orders in the present writ petition on the touch stone of violation of principle of natural justice alone. On perusal of the assessment orders contained in Annexure No. 2 & 3, it is clear that no basis of assessment has been indicated. The power of assessment, vests in the authority by virtue of Section 3 of the 1977 Act. Section 4, 5 and 6 of the said Act provide for the submission of returns by the consumer and Section 6 empowers the authority to take action after making an enquiry as is deemed fit and Section 6 (1A) confers the power to determine the quantum of cess after following the procedure as is prescribed under Sections 4, 5 and 6(1) of the said Act. Section 3, 4, 5 and 6 of the Act are quoted herein below:-
"3. Levy and collection of cess.?(1) There shall be levied and collected a cess for the purposes of the Water (Prevention and Control of Pollution) Act, 1974 (6 of 1974) and utilisation thereunder.
(2) The cess under sub-section (1) shall be payable by?
(a) every person carrying on any 3 [industry]; and
(b) every local authority, and shall be calculated on the basis of the water consumed by such person or local authority, as the case may be, for any of the purposes specified in column (1) of Schedule II, at such rate, not exceeding the rate specified in the corresponding entry in column (2) thereof, as the Central Government may, by notification in the Official Gazette, from time to time, specify.
[(2A) Where any person carrying on any 3 [industry] or any local authority consuming water for domestic purpose liable to pay cess fails to comply with any of the provisions of section 25 of the Water (Prevention and Control of Pollution) Act, 1974 (6 of 1974) or any of the standards laid down by the Central Government under the Environment (Protection) Act, 1986 (29 of 1986), cess shall be, notwithstanding anything contained in sub-section (2) of this section, calculated and payable at such rate, not exceeding the rate specified in column (3) of Schedule II, as the Central Government may, by notification in the Official Gazette, from time to time, specify.] (3) Where any local authority supplies water to any person carrying on any 1 [industry] or to any other local authority and such person or other local authority is liable to pay cess 2 [under sub-section (2) or subsection (2A)] in respect of the water so supplied, then, notwithstanding anything contained 3 [in those subsections], the local authority first mentioned shall not be liable to pay such cess in respect of such water. Explanation.?For the purposes of this section and section 4, "consumption of water" includes supply of water.
4. Affixing of meters.?(1) For the purpose of measuring and recording the quantity of water consumed, every person carrying on any 1 [industry] and every local authority shall affix meters of such standards and at such places as may be prescribed and it shall be presumed that the quantity indicated by the meter has been consumed by such person or local authority, as the case may be, until the contrary is proved.
(2) Where any person or local authority fails to affix any meter as required by sub-section (1), the Central Government shall, after notice to such person or local authority, as the case may be, cause such meter to be affixed and the cost of such meter together with the cost for affixing the meter may be recovered from such person or local authority by the Central Government in the same manner as an arrear of land revenue.
5. Furnishing of returns.?4 [(1)] Every person carrying on any 1 [industry] and every local authority, liable to pay the cess under section 3, shall furnish such returns, in such form, at such intervals and containing such particulars to such officer or authority, as may be prescribed.
5 [(2) If a person carrying on any 1 [industry] or a local authority, liable to pay the cess under section 3, fails to furnish any return under sub-section (1), the officer or the authority shall give a notice requiring such person or local authority to furnish such return before such date as may be specified in the notice.]
6. Assessment of cess.?(1) The officer or authority to whom or which the return has been furnished under section 5 shall, after making or causing to be made such inquiry as he or it thinks fit and after satisfying himself or itself that the particulars stated in the return are correct, by order, assess the amount of cess payable by the concerned person carrying on any 1 [industry] or local authority, as the case may be.
6 [(1A) If the return has not been furnished to the officer or authority under sub-section (2) of section 5, he or it shall, after making or causing to be made such inquiry as he or it thinks fit, by order, assess the amount of cess payable by the concerned person carrying on any 1 [industry] or local authority, as the case may be.] (2) An order of assessment made under sub-section (1) 6 [or sub-section (1A)] shall specify the date within which the cess shall be paid to the State Government.
(3) A copy each of the order of assessment made under sub-section (1) 6 [or sub-section (1A)] shall be sent to the person or, as the case may be, to the local authority concerned and to the State Government.
(4) The State Government shall, through such of its officers or authorities as may be specified by it in this behalf by notification in the Official Gazette, collect the cess from the person or local authority liable to pay the same and pay the amount so collected to the Central Government in such manner and within such time as may be prescribed. "
8. In the present case, specific assertion of the counsel for the petitioner is that no opportunity of hearing was granted and was not even dealt with by the appellate Court while recording the reasoning while dismissing the appeal preferred by the petitioner. The assessment orders also 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 quoted herein above, 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 Dharmpal Satyapal Ltd. Versus Dy. Commissioner of Central Excise, Gauhati & Others (2015) 8 SCC 519. 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.
9. Thus, for the reasons recorded above, and the fact that 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. The assessing authority shall have the liberty to pass a fresh order strictly in accordance with law, if so advised.
10. The writ petition stands disposed of.
Order Date :- 4.10.2023 Arun