Allahabad High Court
Markwell Paper Plast Pvt. Limited vs Commissioner Of Trade Tax on 16 April, 2003
Equivalent citations: [2004]138STC616(ALL)
Author: Prakash Krishna
Bench: Prakash Krishna
JUDGMENT Prakash Krishna, J.
1. This revision is directed against the order dated July 3, 2002 passed by the Trade Tax Tribunal, U.P., Lucknow, in Appeal No. 111 of 2001. The appeal before the Tribunal was filed against the proceedings under section 4-A of the U.P. Trade Tax Act, 1948 (hereinafter referred to as "the Act").
2. The applicant is a private limited company registered both under the U.P. Trade Tax Act as well as under the Central Sales Tax Act, 1956 and has established a new industrial unit at Ghaziabad. The applicant, after completing all the formalities, applied for grant of eligibility certificate under section 4-A of the Act. The Divisional Level Committee on May 27, 1994 granted the eligibility certificate to the applicant granting exemption from payment of tax for a period of 8 years with effect from October 16, 1993 to October 15, 2001 or to the extent of 125 per cent of the fixed capital investment. Thereafter, it appears, the applicant moved an application before the Divisional Level Committee that besides manufacturing flexible plastic film printed and laminated mark, the applicant is also manufacturing plastic/paper pouch ; hence the eligibility certificate may be modified accordingly. The said application was considered by the Divisional Level Committee in its meeting dated December 18, 1998 and was ultimately allowed. The decision was communicated to the applicant by the General Manager of the District Industries Centre on January 14, 1999, with effect from October 30, 1998 for the remaining eligibility period up to October 15, 2001.
3. Subsequently the Divisional Level Committee on an objection being raised by the Trade Tax Department in the exercise of suo motu power again amended the eligibility certificate. It passed an order dated March 16, 2000 and by this order it withdrew the exemption granted on the manufacture of plastic/paper pouches. This order was passed behind the back of the applicant and no opportunity of hearing whatsoever was ever afforded to it. Subsequently the applicant filed an application for recall of the order dated March 16, 2000 as the same was passed without giving any opportunity of hearing and was without jurisdiction. According to the applicant the Divisional Level Committee had no suo motu power to pass the order dated March 16, 2000. The Divisional Level Committee ultimately vide its order dated July 12, 2001 recalled the order dated March 16, 2000. The Department challenged the order dated July 12, 2001 by filing the aforesaid appeal before the Trade Tax Tribunal.
4. The aforesaid appeal of the Department was heard by the President, Trade Tax Tribunal, along with two other members and the Tribunal by the impugned order has allowed the appeal and set aside the order dated July 12, 2001 of the Divisional Level Committee. Feeling aggrieved the present revision has been filed.
5. Heard Sri Bharat Ji Agrawal, Senior Advocate, assisted by Sri Piyush Agarwal on behalf of the applicant and Sri Bipin Kumar Pandey, Standing Counsel, on behalf of the Department.
6. The Tribunal, in the impugned order, has observed that the Divisional Level Committee had no authority or jurisdiction to pass the order dated July 12, 2001 challenged in the appeal. This view has been taken on the ground that this was the second review application moved by the applicant and the second review application is not maintainable. The further observation is that the Divisional Level Committee committed gross impropriety and illegality in passing the order dated July 12, 2001. After going through the entire record of the case I am unable to agree with the judgment of the Trade Tax Tribunal.
7. The basic facts are admitted. The eligibility certificate was granted at the Divisional Level Committee stage on May 27, 1994 for a period of 8 years, with effect from October 16, 1993 to October 15, 2001 or up to the extent of 125 per cent. According to the applicant in the said eligibility certificate the item plastic/paper pouches was not covered. The applicant filed a review application for inclusion of those items also in the eligibility certificate, which was ultimately granted. Thereafter, the Divisional Level Committee, in exercise of suo motu power, passed the order dated March 16, 2002 withdrawing the inclusion of plastic/paper pouches from the eligibility certificate. The order dated March 16, 2000 is on the face of it totally illegal and without jurisdiction for two reasons. Firstly, no opportunity of hearing was afforded to the applicant before passing of the said order. It is well-settled law that if an order has civil consequences on the rights of a party an opportunity of hearing should be afforded to that party. The passing of the order dated March 16, 2000 behind the back of the applicant is on the face of it void being violative of principles of natural justice. Secondly, a division Bench of this Court in the case of Arora Box Industries, Varanasi v. Divisional Level Committee, Varanasi 1993 UPTC 204 has held that the Divisional Level Committee has no power to cancel or amend the eligibility certificate already granted. Consequently there was absolutely no occasion for the Divisional Level Committee to pass the order dated March 16, 2000. The said order being totally without jurisdiction and having been passed in violation of principles of natural justice is liable to be ignored. However, the applicant was advised to file an application before the Divisional Level Committee to rectify this mistake by recalling the order dated March 16, 2000. The Divisional Level Committee on the application of the applicant has rectified its mistake and I do not find any illegality in the procedure adopted by the Divisional Level Committee in recalling the order dated March 16, 2000 which was admittedly an ex parte order so far as the applicant is concerned. The observation of the Tribunal that the subsequent application filed by the applicant was in the nature of a second review application is not legally sound. After the decision of the first application an intervening event had taken place. The applicant was aggrieved by the order dated March 16, 2000 and qua this order the applicant filed the application which was the first application and by no stretch of imagination it can be called the second application.
8. The Supreme Court has repeatedly held that the requirement of natural justice will be read into statutory provisions unless excluded expressly or by necessary implication. The Supreme Court following the decision in the case of Union of India v. Col. J.N. Sinha reported in (1970) 2 SCC 458 and Constitution Bench judgment and in Olga Tellis v. Bombay Municipal Corporation (1985) 3 SCC 545 in State Government Houseless Harijan Employees Association v. State of Karnataka (2001) 1 SCC 610 has held that an opportunity of hearing must be given by the authority concerned before passing any order affecting the rights of the person.
9. The Tribunal has not examined the merits of the case and has allowed the appeal on the short ground that the Divisional Level Committee had no authority and jurisdiction to pass the order dated July 12, 2001. The Department is not remediless if the order dated July 12, 2001 is set aside. There is adequate provision under section 4-A(3) of the Act if the department is at all aggrieved by the subsequent inclusion of plastic/paper pouches in the eligibility certificate.
10. Having regard to the above, the revision is allowed. The order dated July 3, 2002 passed by the Trade Tax Tribunal is set aside. No order as to costs.