# Akshay Lal Rai v. State of U.P. & Ors

- **Citation:** (2021) 11 ILRA 372
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2019-04-29
- **Case number:** Writ C No. 60362 of 2013
- **Bench:** Ajit Kumar
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/akshay-lal-rai-v-state-of-u-p-ors-45129
- **Pages:** 9

## Headnote

A. Civil Law - Fair Price Shop - Administrative
enquiry - Rule of law - Government's liability -
Held, we have a society governed by rule of law
- Where Government enters in domain of
contract and is on driver's seat, the minimum
requirement of law would be that action is
procedurally always correct - When procedure
prescribes
even
in
the
matters
of
administrative enquiry requires that certain
things are to be done in a certain manner then
authorities cannot be permitted to proceed at
their whims and in arbitrary manner which
would lead to miscarriage of justice. (Para 21)
B.
Civil
law
-
Essential
commodities
Distribution Order, 2004 - Clause 22 - Fair
Price Shop - License cancellation - Fair and
just enquiry - Essentials required to be
followed - Held, if a person has been charged
with certain gross irregularities/ illegality then
such person is not only entitled to submit
explanation but is also entitled to due supply of
requisite documents to enable him to submit
proper reply and he is also entitled to examine
such complaints on the basis of which serious
charges have been levelled against him to hold
an enquiry to cancel the license. (Para 29)
C. Constitution of India - Article 14 - Fair Price
Shop - Licence cancellation - Principle of
natural justice - Application - Failure to supply
the inspection report to the dealer - Denial of
opportunity of hearing - Effect - Held, once fair
price
shop
is
suspended,
the
charge
sheet/notice is issued may be in the form of
suspension order, the supply of that ex parte
inspection report to the fair price shop dealer
alongwith documents if any forming basis of
such report is sine qua non - This is also in
furtherance of principles of natural justice in
cases where such enquiry report forms the
basis of impugned order. (Para 23)
Writ petition disposed of. (E-1)
Cases relied on :-

## Text

372 INDIAN LAW REPORTS ALLAHABAD SERIES
(2021)11ILR A372
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 29.04.2019

BEFORE

THE HON'BLE AJIT KUMAR, J.

Writ C No. 60362 of 2013

Akshay Lal Rai ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Appellant:
Sri Vinod Kumar Sharma

Counsel for the Respondents:
C.S.C., Sri R.P. Mishra, Sri R.C. Upadhyay

A. Civil Law - Fair Price Shop - Administrative
enquiry - Rule of law - Government's liability -
Held, we have a society governed by rule of law
- Where Government enters in domain of
contract and is on driver's seat, the minimum
requirement of law would be that action is
procedurally always correct - When procedure
prescribes
even
in
the
matters
of
administrative enquiry requires that certain
things are to be done in a certain manner then
authorities cannot be permitted to proceed at
their whims and in arbitrary manner which
would lead to miscarriage of justice. (Para 21)
B.
Civil
law
-
Essential
commodities
Distribution Order, 2004 - Clause 22 - Fair
Price Shop - License cancellation - Fair and
just enquiry - Essentials required to be
followed - Held, if a person has been charged
with certain gross irregularities/ illegality then
such person is not only entitled to submit
explanation but is also entitled to due supply of
requisite documents to enable him to submit
proper reply and he is also entitled to examine
such complaints on the basis of which serious
charges have been levelled against him to hold
an enquiry to cancel the license. (Para 29)
C. Constitution of India - Article 14 - Fair Price
Shop - Licence cancellation - Principle of
natural justice - Application - Failure to supply
the inspection report to the dealer - Denial of
opportunity of hearing - Effect - Held, once fair
price
shop
is
suspended,
the
charge
sheet/notice is issued may be in the form of
suspension order, the supply of that ex parte
inspection report to the fair price shop dealer
alongwith documents if any forming basis of
such report is sine qua non - This is also in
furtherance of principles of natural justice in
cases where such enquiry report forms the
basis of impugned order. (Para 23)
Writ petition disposed of. (E-1)
Cases relied on :-
1. Puran Singh Vs St. of U.P.; 2011 AIR, 73
2. Smt. Santara Devi Vs St.of U.P & ors.; 2016 2 ADJ
70
3. Dayananad Yadav Vs St.of U.P. through Secretary
& ors.; 2019 (1) AWC 347
4. Ajay Pal Singh Vs St. of U.P. & ors.; 2018 (7) ADJ
301
(Delivered by Hon'ble Ajit Kumar, J.)

1. Heard learned counsel for the parties.

2. By means of this writ petition under
Article 226 of the Constitution, the petitioner
has sought a writ of certiorari for quashing the
order dated 28th May, 2013 passed by the
prescribed authority cancelling the fair price
shop license of the petitioner as well as the order
passed
by
the
Commissioner,
Azamgarh
Division Azamgarh order dated 4.10.2013
rejecting the appeal.

3. The main plank of the argument of the
counsel for the petitioner is that order cancelling
fair price shop license has been passed as a result
of enquiry de hors the rules and the procedure
prescribed and which according to him has
resulted in serious miscarriage of justice.

4. In support of his argument, learned
counsel for the petitioner has relied upon the
11 All. Akshay Lal Rai Vs. State of U.P. & Ors.
373
relevant
provisions
of
the
Essential
Commodities Distribution Order 2004 as well as
Government Order issued 29th July,2004.
Learned counsel for the petitioner has further
relied upon full bench judgment of this Court in
the case of Puran Singh v. State of U.P., 2011
AIR, 73 and the judgments of the learned Single
Judges in the case of Smt. Santara Devi v.
State of U.P and Others, 2016 2 ADJ, 70,
Dayananad Yadav v.State of U.P. Through
Secretary and Others, 2019 (1) AWC 347,
and Ajay Pal Singh v. State of U.P. and
Others 2018 (7) ADJ, 301.

5. Learned Standing Counsel has urged
that findings of facts have come to be returned
by the prescribed authority and the same having
been confirmed by the appellate authority, this
Court may not interfere in such findings of facts.
It is further argued by learned Standing Counsel
that rights of the petitioner emanates from pure
contract
reached
between
petitioner
and
Government
authority
and
whereby
the
petitioner is only acting as an agent of the
Government. He argued that the prime concern
of the allotment of fair price shop is to ensure
smooth sailing of the public distribution system
so as to take essential commodities to the most
needy people in right quantity and at a right
price and, therefore, if in case on inspection,
irregularity
is
found in
the
distribution,
management at fair-price shop and allegations
are of overpricing by the dealer in respect of
scheduled commodities, the Government has
every right through designated authority to
cancel the license. He would submit that
principles of natural justice as such cannot be
put into a straight jacket formula so as to defeat
the very object of the distribution system. He
would urge that once the spot inspection has
been carried out and the ration cardholders have
given their complaints and the verification
thereof from the relevant registers, if results in
prima facie establishing the charge, the
prescribed authority is fully justified in taking
action for cancellation of fair price shop license.
He further submits that in so far present case is
concerned there were serious complaints and the
enquiry shows that petitioner was in fact
involved in irregularities at the time of
distribution and also quantity and at times of non
distribution of the scheduled commodities to the
deserving ration card holders and also was guilty
for charging higher price than prescribed one
from the scheduled commodities and according
to him since findings have come to be returned
against the petitioner bringing home the charge
and admittedly the petitioner was given
opportunity to defend himself, it is not a fit case
a for interference.

6. In order to appreciate the rival submissions
advanced before this Court, it is necessary to
appreciate the facts at first. In the present case, the
petitioner's fair price shop license was in fact
suspended under the order dated 1st April, 2013
passed by Sub Divisional Officer and as many as 10
charges were levelled. The order of suspension that
carries charges as states that inspection was carried
out on the spot on 17th March, 2013 by a team
consisting of Tehsildar Sadar, supply Inspector
Sadar as well as Supply Clerk of the Tehsil. It is
stated that whether said team conducted inspection
of shop at that time many ration cardholders of the
category
like
Antyoday
cardholders,
BPL
cardholders were present and the made complaints
against the petitioner and ration cardholders lodged
their complaint by name, like BPL cardholder Raj
Kumar (Card No. 98113), Rama Shankar(Card No.
98171), Sonmati (Card No. 98111), Ramvyas (Card
No. 98132), Uma Shankar (Card No. 98151) and
their complaints were that scheduled commodities
were not distributed properly and sometimes wheat
and rice would not be distributed and some times
sugar would not be distributed and even there was
allegation of over pricing at the end of the petitioner.

7. There was further complaint by APL
cardholders who were 20 in number and the
complaint was that they were being charged
374 INDIAN LAW REPORTS ALLAHABAD SERIES
higher price for kerosene oil and they were
being distributed 2 liters of kerosene oil a lesser
quantity and was being distributed for higher
price.

8. Similarly Antyoday cardholders also
made a complaint that they were being
distributed
lesser
quantity
of
scheduled
commodities and that too at a higher price and
there was one America Singh S/o Ramvriksh
(Card No. 59582) who made allegation that he
was never given any ration.

9. Taking the report dated 17th March,
2013 as prima facie correct the fair price shop of
the petitioner was suspended and explanation
was called. The petitioner submitted a very
detailed reply to the charges point-wise and in
response to overpricing he made not only denial
but pleaded that conduct of ration cardholder
was such that at time he would not turn up to the
shop. He also stated at the same time that those
ration cardholders whose ration card was burnt
and yet in their name and number of respective
cards
the
commodities
were
distributed.
Similarly in respect of kerosene oil and the
charge of overpricing, the petitioner submit a
detailed reply.

10. From the record it is clear that
petitioner while submitted reply to the charges
on 15.4.2013 also filed affidavits of various
ration cardholders addressed to Sub Divisional
Officer, Ballia, in which those ration cardholders
have categorically stated that they had not made
any complaint so far distribution of scheduled
commodities was concerned and price charged
in that regard by the dealer. What is very
interesting to notice that one America Singh S/o
Ramvriksh (Card No. 59582) who had made a
complaint that he was never distributed any
scheduled commodities filed his personal
affidavit dated 15.4.2013, in which he stated that
he had not made any complaint against ration
cardholders. Raja Ram , Ramashray, Chhote Lal,
Tetari, Smt. Ambi, Bhankumar, Moti Lal, Kripa
Shankar, Ram Avatar, Prabhawati Devi, Nain
Kumari, Dulari, Janglee, Shivji, Janaradan,
Bhola, Rajmani and Shanti many of them were
also shown as complainants, besides ,others also
filed affidavit to the effect that they had not
made any complaint against the petitioner and
that they were fully satisfied with distribution of
essential commodities and the price charged by
the petitioner was accurate as prescribed.
Accordingly as these documents in the form of
affidavits were brought on record and supply
and distribution register placed before the
prescribed authority and the fact that the reply of
the petitioner was there, the prescribed authority
proceeded to pass final order which is impugned
in the writ petition as by the said order, fair price
shop license of the petitioner was cancelled

11. From the recitals as have come to be
made in the impugned order, it is clear that the
prescribed authority simply entertained the
objections of the petitioners in terms of the reply
and the affidavits and also accepted other
documents like supply register, stock and
distribution registers and had also complaints
before him already submitted alongwith spot
inspection enquiry report dated 17th March,
2013. However, no specific date was fixed for
the petitioner to place his reply and lead some
oral evidence in support of his reply submitted.
Further though affidavits were filed of all such
ration-cardholders to whom it is alleged that
they had complained, the enquiry authority did
not fix any date for oral hearing in the matter to
get such statements verified as statements were
made denying the complaints and it appears that
on the basis of records available before him, he
proceeded to pass order.

12. From perusal of the order by which the
fair price shop license has been cancelled, I find
that complaints of individual cardholder were
taken as a general complaints and then on the
basis of some irregularities if detected in terms
11 All. Akshay Lal Rai Vs. State of U.P. & Ors.
375
of the maintenance of distribution register being
not as per prescribed format and that it being not
at all counter signed by the Inspector findings
have been returned that charges stood proved
and the petitioner was thus held guilty for
irregular distribution of essential commodities
and also for charging higher price.

13. It has been recorded as finding of fact
that at the time of inspection what was shown
that Antyoday cardholders were distributed
scheduled commodities were shown to be 65
Antyoday card holders 86 BPL cardsholders and
in the distribution register further price of 15 kg
of BPL wheat was shown as 68.70 paise whereas
prescribed rate of 15 kg of BPL wheat would be
69.75 paise so there was difference of about one
rupees five paise in distribution of 15 kg of
wheat. What clinching issue is that in spot
inspection enquiry report that has been referred
to in suspension order, there was no such
complaint in the nature that distribution register
was not properly maintained and that relevant
pages were not countersigned by the concerned
officer, namely Supply Inspector and, therefore,
they appeared to be forged and manipulated
documents. There being no such report at least it
is so reflected from the order of suspension, this
Court is amazed to find as to how in the absence
of any such report, prescribed authority on his
own
proceeded
to
assume
that
register
maintained by the ration cardholder was not on
proper format. Moreover, from the findings that
have come to be returned it does not transpire
that those individual cardholders who had made
complaint before Supply Inspector they were not
summoned to explain away as to why did they
change their respective stand . It is also clear
from the order impugned that copy of the
enquiry report was not at all given to the
petitioner to make reply in rebuttal. The question
therefore, remains that if complaint is for reason
ABC and those reasons or the complaints are not
proved from record, the prescribed authority was
not justified in recording other reasons to cancel
the fair price shop. There is no such charge in
the suspension order which carries list of
charges that distribution register was not
properly maintained and that it was not
countersigned and that it was a forged
document. In the absence of any such charge
being levelled, the petitioner certainly had no
opportunity to offer his explanation as no oral
hearing was held nor, any date for enquiry was
fixed after reply was submitted.

14. In the absence of enquiry report as was
not made available to the petitioner, and there
being no allegations in the order of suspension
or show cause to the effect that distribution
register was not countersigned by the official,
this Court cannot justify the conduct of the
prescribed authority on placing reliance upon
such enquiry report while bringing home the
charge.

15. Black marketing of the essential
commodities has been made part of the findings
returned by the prescribed authority in his
ultimate order also does not find any place in the
form of charge in the suspension order and,
therefore, the petitioner also had not been given
any opportunity to explain away the charge of
black-marketing. The appellate authority has,
however, concurred with findings returned by
the prescribed authority and has passed final
order without any independent application of
mind.

16. Coming to the legal aspect and
argument so advanced by learned counsel for the
petitioner, I find that clause 22 of the
Distribution
Order
2004
prescribes
for
suspension and cancellation of fair price shop, it
provides vide clause 22 of the Control Order
2004, which is reproduced hereunder:

"22. Power of entry, search, seizure,
etc.- (1) The Food Officer, the Competent
Authority, the Senior Supply Inspector or Supply
376 INDIAN LAW REPORTS ALLAHABAD SERIES
inspector may within his jurisdiction with such
assistance if any, as he thinks fit,-

(a) Require the owner, occupier or any
other person in charge of any place, premises,
vehicles or vessels in which he has reason to
believe that any contravention of the provisions
of this order has been or is being, or is about to
be made to produce any book, account or other
documents showing transaction relating to such
contravention;

(b) Enter, inspect or break open and
search any place or premises, vehicle or vessel
in which he has reason to believe that any
contravention of the provisions of this order has
been or is being or it about to be made;

(c) Examine and seize any books of
accounts and documents which in the opinion of
such officer may be useful for or relevant to any
proceeding under this order and return such
books of accounts and documents to the person
from whom they were seized after copies thereof
or extracts therefrom as may be considered
necessary and certified by the person to be
correct have been taken;

(d) Seize any Scheduled Commodities,
if he is satisfied that there has been
contravention of this order;

(e) Send a report as provided in
Section 6(a) of the Act to the Collector of the
District inwhich such seizure is made and the
Collector may thereafter proceed to confiscate
the Scheduled Commodities, animal vehicles,
vessel or other conveyance so seized in
accordance with the provisions of the Act.

(2) The provisions of Section 100 of
the Code of Criminal Procedure, 1973 (Act No.
2 of 1974) relating to search shall as far as may
apply to search under this clause.

17. Thus, the word contemplated in clause
22 (supra) is that if the fair price shop is
suspended, further enquiry will be conducted
and in case if any such enquiry conducted
against the fair price shop dealer the ultimate
order will depend upon the enquiry report and
also after giving further opportunity to the dealer
to peruse the enquiry report and also to peruse
the evidence relied upon enquiry report and then
offer his explanation in reply to the enquiry
report.

18. In aid to the aforesaid provision,
Government Order was issued on 29.7.2004
which dealt with proceedings of suspension and
cancellation and procedure prescribed to be
followed. Paragraphs 4 and 5 of the Government
Order are reproduced hereunder:

"4- fuyfEcr dh x;h nqdkuksa ds fo:)
tkap dh dk;Zokgh vf/kdre ,d ekg esa vfuok;Z :i
ls iwjh dh tk;sxh rFkk tkap esa lEcfU/kr nqdkunkj dks
lquokbZ dk iwjk ekSdk fn;k tk;sxkA lEcfU/kr nqdkunkj
dk ;g nkf;Ro gksxk fd og tkap es viuk iwjk lg;ksx
ns rkfd tkap dk dk;Z tYnh ls tYnh iwjk fd;k tk
lds rFkk fu;qfDr izkf/kdkjh }kjk izdj.k esa xq.k nks"k ds
vk/kkj ij vfUre fu.kZ; fy;k tk ldsA ;fn nqdkunkj
}kjk tkap esa lg;ksx ugha fn;k tk jgk gks vkSj tkap esa
foyEc djus dk iz;kl fd;k tk jgk gks rks nqdkunkj
dks bl vk'k; dk Hkh uksfVl tkjh fd;k tk;sxk vkSj
viuk i{k j[kus dk vfUre volj iznku fd;k tk;sxkA

5- tkWp dh dk;Zokgh vf/kdre ,d ekg esa
iw.kZ djds fu;qfDr izkf/kdkjh }kjk izdj.k esa vfUre
fu.kZ; fy;k tk;sxk vkSj xq.k nks"k ds vk/kkj ij ,d
^^Lihfdax vkMZj*** tkjh fd;k tk;sxkA bl vkns'k esa ;g
Li"V mYys[k gksuk pkfg, fd lEcfU/kr nqdkunkj dks
lquokbZ dk volj fn;k x;k vkSj mls lquk x;kA ;fn
nqdkunkj us tkap esa lg;ksx ugha fd;k gks vkSj lquokbZ
ds volj dks tkucw>dj mi;ksx ugha fd;k gks rks
vfUre vkns'k esa bl ckr dk Hkh iwjk mYys[k gksuk
pkfg, fd nqdkunkj dks volj iznku fd;k x;k rFkk
vfUre uksfVl fn;k x;k ijUrq mlus tkucw> dj
volj dk mi;ksx ugh fd;k vkSj tkap esa lg;ksx ugha
fd;kA "

19. The provisions in the Government
Order are to the effect that after suspension has
taken place, a complete enquiry will be held
within a month and in which fair price shop
dealer shall be provided full opportunity to
defend himself. Of-course he would to have
11 All. Akshay Lal Rai Vs. State of U.P. & Ors.
377
cooperate with the enquiry so that enqury is
concluded at the earliest, positively within a
month and then prescribed authority /licensing
authority /designated authority shall take final
decision in the matter on merits. It is further
provided that in case cooperation is not extended
by the dealer, he shall be given one last
opportunity through notice.

20. Important aspect of clause 5 of the
Government Order is that while taking final
decision in the matter prescribed authority shall
not only pass a final order but shall specifically
state that concerned fair price shop dealer was
afforded reasonable opportunity and was heard
and in case if the dealer was not cooperating
with the same, the order shall also be passed in
that particular circumstances recording such
facts. From the provisions of the Clause 22 of
the Control Order and Clause 4 and 5 of the
Government Order (supra), this Court finds that
Government Order provides for the procedural
part as an aid to what is substantively provided
under clause 22(1) of the Draft Agreement of the
Distribution Order. Therefore, the mere fact that
right flows from a pure contract between the
parties will not have the effect as argued by
learned Standing Counsel but such contract is
subject to conditions prescribed. Such matter is
to provide a smooth and easy public distribution
system of the essential commodities to achieve
the goal of taking essential commodities to the
poorest of the poor and that too, at the earliest
and also at a fair price.

21. We have a society governed by rule
of law where Government enters in domain of
contract and is on driver's seat, the minimum
requirement of law would be that action is
procedurally always correct. The question
therefore, is that when procedure prescribes
even in the matters of administrative enquiry
requires that certain things are to be done in a
certain manner then authorities cannot be
permitted to proceed at their whims and in
arbitrary manner
which
would lead to
miscarriage of justice.

22. From the perusal of clause 4 and 5
and Draft Rule under the Distribution Order,
2004, it is very much clear that if preliminary
enquiry was conducted and fair price shop
license of the dealer stood suspended, yet
another enquiry be framed as full fledged
enquiry which is necessary. The preliminary
enquiry is an elementary enquiry only to
proceed further and to form prima facie
opinion to suspend the shop so that atleast
irregularities complained are immediately
arrested and that is why the full bench of this
Court in the case of Puran Singh v. State
(supra)
has
virtually
held
that
while
authorities are proceeding to suspend the
license and for that purpose had held a
preliminary enquiry, the fair price shop dealer
is
not
required
to
have
prior
notice/
opportunity of hearing. So preliminary enquiry
is only enabling enquiry held on complaints
and is confined to action of suspension only
and is the basis to call explanation and for
further full fledged enquiry.

23. Under the circumstances, once fair
price
shop
is
suspended,
the
charge
sheet/notice is issued may be in the form of
suspension order, the supply of that ex parte
inspection report to the fair price shop dealer
alongwith documents if any forming basis of
such report is sine qua non. This is also in
furtherance of principles of natural justice in
cases where such enquiry report forms the
basis of impugned order.

24. Even otherwise , this Court is of the
opinion that supply of the documents which are
basically complaints and the ex parte spot
inspection report which is must to set into
motion full fledged enquiry referred to under the
Government Order, may be such enquiry report
may not form the ultimate basis of the order
378 INDIAN LAW REPORTS ALLAHABAD SERIES
impugned but it would certainly clear doubts as
to whether the ultimate order was being passed
on the basis of the charges set out pursuant to
enquiry report or some additional charges have
come to be considered by the prescribed
authority without affording opportunity to the
dealer to rebut those charges. Further full
fledged enquiry means an enquiry subsequent to
the preliminary enquiry and this could be even
held by the prescribed authority who is to
ultimately pass an order but since enquiry means
examination of records and verification of
documents submitted by the charged person and
also oral evidence if at all required, it is
mandatory for the prescribed authority to fix a
date for taking such evidence or at-least giving
opportunity to the dealer to submit his oral
statement in support of the explanation already
submitted and would also explain away the
documents and registers submitted by him. As a
matter of fact he would justify his explanation
with records and such enquiry if conducted, it
would facilitate the prescribed authority in
taking decision on merits with proper evaluation
of the documents on record and oral submissions
made in respect thereof.

25. Paragraph 35 of the full bench
judgment in the case of Puran Singh (supra)
has emphasized the aspect of the full fledged
enquiry before final order is taken. Vide
paragraph 35 of judgment has held thus:

"35.Powers of suspension is centrally
there but while exercising care is to be taken to
the mandate of the proviso which states that the
order is to be speaking one. Thus so far the
power of suspension while proceeding to call
upon the licencee about cancellation of the shop
is concerned it is always there. It will be
incorrect to hold that without preliminary
enquiry in respect to a fact finding and without
any opportunity the shop is not to be suspended.
Para 4 and 5 of the Government Order clearly
permits fulfledged enquiry purusant to the show
cause notice for cancellation and then final
decision in the matter. So far the order of
suspension is concerned Government Order do
not provide any appeal and at the same time
there was no contention of signing an agreement
as was made obligatory pursuant to Distribution
Order of 2004."

26. In the case of Ajay Pal Singh v. State
of U.P. and others (supra) this Court has
considered
various
judgments
and
has
summarized the procedure to be followed vide
paragraph 14 which runs as under:-

"The Authority which is performing a
qausi judicial functioning has to function
judicially. Simply by saying that the petitioner
i.e. Fair Price Shop dealer had not submitted his
reply and therefore the licence should be
cancelled was wrong on the part of the Sub
Divisional Magistrate. It was his bounden duty:-

I. To direct the complaints to lead
their evidence;

II should have given an opportunity to
the Fair Price Shop Dealer(the petitioner) to
cross examine the witnesses of the complaints

III. The petitioner should have also
been allowed to lead his evidence.

IV. The complainants should have
been allowed to cross examine the witnesses of
the defence.

V. If any documentary evidence was
produced then the same should have been
proved as per law.

VI. For doing the above, the Sub
Divisional Magistrate should have fixed a date
and a place.

VII. And only thereafter the Sub
Divisional Magistrate should have come to a
conclusion as to what had to be done with the
licence/agreement of the petitioner to run the
Fair Price Shop. "

27. This Court in the case of Dayanand
Yadav v. State (supra) relied upon the
11 All. Akshay Lal Rai Vs. State of U.P. & Ors.
379
judgment of Patiram Writ-C with 14206 of
2014, vide paragraph 24 has held thus.

"In another case in Writ-C No. 14206
of 2014 (Pati Ram v. State of U.P. And Others),
this Court has held that if the decision is based
on the sttement of the complainants/cardholders,
then the copies of the statements have to be
provided to the fair price shop agent, so that, he
may be able to cross-examine the persons whose
statement has been made basis for cancellation
of license."

28. Now applying the above principle of
law, I find justification in the argument
advanced by learned counsel for the petitioner
that order impugned passed by the prescribed
authority is clearly not sustainable as neither
enquiry report dated 17th March, 2013 was
supplied to the petitioner nor, any enquiry was
conducted in the matter by the prescribed
authority as after reply was submitted by the
petitioner on 15.4.2013 alongwith the documents
neither any further date was fixed by the
prescribed authority to hold oral hearing in the
matter, nor, there is any reference to any
affidavit of complainant on the basis of which it
is alleged that inspection team was constituted to
submit report and on the basis of inspection
report the alleged enquiry was set into motion.

29. It is cardinal principle of rule of law
that no body should be condemned unheard. If a
person has been charged with certain gross
irregularities/ illegality then such person is not
only entitled to submit explanation but is also
entitled to due supply of requisite documents to
enable him to submit proper reply and he is also
entitled to examine such complaints on the basis
of which serious charges have been levelled
against him to hold an enquiry to cancel the
license. The question is not only of cancellation
of fair price shop license of a dealer but if a
dealer's license stands cancelled on certain
charges being proved then such fair price shop
dealer may not be entitled to get license in
future. Even otherwise, if a person is charged
with
black-marketing
and
overpricing
or
irregularities
in
distribution
of
essential
commodities to the poor and needy for which
Government has evoked public distribution
system, such charges cause serious stigma on the
character of such person in the society.

30. Under the circumstances, without
holding proper enquiry, charge of such nature if
said to have been brought home, in the
considered opinion of the Court, such an order is
vitiated in law and findings returned are
absolutely perverse.

31. In view of above, the order dated
28.5.2013 passed by Sub Divisional Officer, Sadar
Ballia and the order dated 04.10.2013 passed by
Commissioner, Azamgarh, Division Azamgarh are
set aside. It is always necessary that if any oral
statement is made in the complaint and charge is
levelled on such basis then such statements is
taken on affidavit. In the absence of any such
affidavit and merely statements alleged to have
been signed, the prescribed authority/ enquiry
officer has to be conscious in accepting and
admitting such statements.

32. The matter is remitted to the prescribed
authority to either appoint an enquiry officer or
himself hold enquiry after supplying necessary
copies of the preliminary enquiry report/
inspection report and the complaints made
against the petitioner giving him opportunity to
lead evidence and then to permit him if he
requests for cross- examination of such
complainant. The final decision shall be taken
by the prescribed authority after holding proper
enquiry as directed hereinabove within period of
three months from the date of production of
certified copy of the order.

33. It is further made clear that as far as
status of the shop is concerned, same shall
380 INDIAN LAW REPORTS ALLAHABAD SERIES
continue as it exists today and shall abide by
ultimate order to be passed by the prescribed
authority as directed hereinabove.

34. With the aforesaid observations and
directions, the writ petition is disposed of.
----------
(2021)11ILR A380
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 05.10.2021

BEFORE

THE HON'BLE NAHEED ARA MOONIS, J.
THE HON'BLE SAUMITRA DAYAL SINGH, J.

Income Tax Appeal No. 52 of 2013

Manas Sewa Samiti ...Appellant
Versus
Addl. Commissioner of Income Tax, Range-I,
Aligarh ...Respondent

Counsel for the Appellant:
Sri Rahul Agarwal, Sri Vishwjit

Counsel for the Respondents:
C.S.C., I.T., Sri Gaurav Mahajan

A. Civil Law - Income Tax Act, 1961: Sections
10 (23C) (iiiad) & 12AA - The Court rejected the
reasoning of the assessing authority for clubbing
the receipts of the Institution with the other
income of the Society, for the purpose of
considering the benefit of Section 10(23C)(iiiad).
The Court finds that the there were two separate
accounts were maintained by the assessee. One for
the institution and the other one for the Society.
After the Income and Expenditure account of the
Institution has been made, its excess of Income
over expenditure were carried to the account of
society for taxation and other purposes. That did
not lead to an inference that the receipts of thw
Society were also the receipts of the Institution.
(Para 22)

Appeal Allowed. (E-10)

List of Cases cited:-
1. CIT Vs M/s Children's Education Society (2013) 358
ITR 373 (Kar) (followed)

2. M/s Vivekan & Society of Education &Research Vs
CIT another ITA No. 23/2014 (followed)

3. CIT Alld Vs Wachaspati Madhupati Prani Sewa
Sansthan ITA No. 258 of 2013

4. Visvesvaraya Technological University Vs Assistant
Commissioner of Income Tax (2016) 384 ITR 37 (SC)
(distinguished)
(Delivered by Hon'ble Naheed Ara Moonis, J.
&
Hon'ble Saumitra Dayal Singh, J)

1. Heard Sri Rahul Agarwal, learned
counsel for the appellant/assessee and Sri
Gaurav Mahajan, learned counsel for the
revenue.

2. Present appeal has been filed under
Section 260-A of the Income Tax Act, 1961
(hereinafter referred as the Act) against the order
of the Income Tax Appellate Tribunal, Agra
Bench, dated 23.10.2012 passed in ITA
No.29/Agra/2011 for the A.Y. 2007-08. By that
order the Tribunal has dismissed the appeal filed
by the assessee and upheld the assessment of the
appellant's income at Rs.86,34,460/-, after
denying the benefit claimed by the assessee
under Section 10(23C)(iiiad) of the Act.

3. Upon earlier hearing, the question of
law, on which the present appeal arises, was
framed as below:

"Whether, in view of the law laid down
in CIT Vs. Children's Education Society [2013]
358 ITR 373 (Kant.) and the order passed by
this Hon'ble Court in CIT (Exemption) v.
Chironji Lal Virendra Pal Saraswati Shiksha
Parishad [2016] 380 ITR 265 (All), the order of
the Tribunal denying the exemption under
Section 10 (23C) (iiiad) and clubbing the
voluntary
contributions
received
by
the