# Bharat Mint & Allied Chemicals, Badaun v. Commissioner Commercial Tax & Ors

- **Citation:** (2022) 3 ILRA 787
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2022-03-04
- **Case number:** Writ Tax No. 1029 of 2021
- **Bench:** Surya Prakash Kesarwani, Jayant Banerji
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/bharat-mint-allied-chemicals-badaun-v-commissioner-commercial-tax-ors-48240
- **Pages:** 7

## Headnote

(A) Tax Law - Constitution of India,1950 -
Article 226, - Central Goods and Service
Tax Act, 2017 -U.P. Goods & Service Tax
Act, 2017 - Sections 74, 75(4) & 107 -
Validity of impugned assessment order -
imposing demand of Tax, interest &
penalty without affording opportunity of
hearing to the Assesse - writ petition -
patent breach of principle of natural
justice - impugned order quashed with
cost of Rs. 10,000/- matter remitted back
to proceed afresh in accordance with law,
after affording opportunity of hearing.
(Para - 9, 17, 18, 19)
788 INDIAN LAW REPORTS ALLAHABAD SERIES
(B) Tax Law - Constitution of India, 1950
- Article 226, - Central Goods & Service
Tax Act, 2017/U.P. Goods and Service Tax
Act, 2017 - Sections 74, 75(4) & 107- Writ
Petition - Validity of impugned assessment
order on the ground of breach of principle
of natural justice - objection taken
counter - alternative remedy - it is settled
law that alternative remedy is not a
complete bar to entertain a writ petition
U/A 226 - writ petition allowed with cost
with
direction
to
Commissioner
Commercial Tax U.P. through Registrar
General - to ensure & follow the principles
of nature justice in the St. of U.P. by the
Assessing Authorities.(Para - 13, 15, 20)

Writ Petition Allowed. (E-11)

List of Cases cited: - '

## Text

3 All. Bharat Mint & Allied Chemicals, Budaun Vs. Commisioner Commercial Tax & Ors.
787
in the State of Uttar Pradesh, rendering the
entire class of dealers remediless under the
Act, 2017 from availing statutory remedy
of appeal under Section 112 of the Act,
2017, we are of the view that under the
facts and circumstances and prevailing
situation, the matter with regard to the
following questions are referred to Larger
Bench:-

(i) Whether by interim order dated
04.03.2021 in PIL CIVIL No.6024 of 2021
(Awadh Bar Association High Court, Lko
Thru Gen.Secy. & Anr. vs. U.O.I.Thru Secy.
Finance Ministry, New Delhi & Ors.),
directing for not establishing GST Appellate
Tribunal for State of Uttar Pradesh without
leave of the court, could be passed in conflict
with the final judgment dated 09.02.2021 in
Writ Tax No.655 of 2018 passed by the
Division Bench?

(ii) Whether under the facts and
circumstances of the case and in the interest
of dealers in State of Uttar Pradesh under the
CGST Act/ U.P.GST Act, 2017, a direction
needs to be issued immediately to the
respondent No.4 to notify the State Bench
and Area Benches of GST Appellate Tribunal
in the State of Uttar Pradesh, within a time
bound period so that persons/ dealers may
avail statutory remedy of appeal under
Section 112 of the CGST Act/ U.P. GST Act,
2017 and they may not suffer further?

(iii) Establishment of the State
Bench of GST Appellate Tribunal at
Prayagraj and its four Area Benches in the
State of Uttar Pradesh in terms of the final
judgment of the Division Bench dated
09.02.2021 in Writ Tax No.655 of 2018 (M/s
Torque Pharmaceuticals Pvt. Ltd. vs. Union
of India and 5 others) and other 29 connected
writ petitions?

22. Let this order alongwith the
records of the writ petition be placed before
Hon'ble the Chief Justice for constitution of
a Larger Bench so that people in the State
of Uttar Pradesh having right to avail
remedy of appeal under Section 112 of the
CGST/ U.P. GST Act, 2017 may avail the
statutory remedy and may not remain
remediless.
----------
(2022)03ILR A787
ORIGINAl JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 04.03.2022

BEFORE
THE HON'BLE SURYA PRAKASH
KESARWANI, J.
THE HON'BLE JAYANT BANERJI, J.

Writ Tax No. 1029 of 2021

Bharat Mint & Allied Chemicals, Badaun
 ...Petitioner
Versus
Commissioner Commercial Tax & Ors.
 ...Respondents

Counsel for the Petitioner:
Sri Abhinav Mehrotra, Sr Satya Vrata
Mehrotra

Counsel for the Respondents:
C.S.C., A.S.G.I.

(A) Tax Law - Constitution of India,1950 -
Article 226, - Central Goods and Service
Tax Act, 2017 -U.P. Goods & Service Tax
Act, 2017 - Sections 74, 75(4) & 107 -
Validity of impugned assessment order -
imposing demand of Tax, interest &
penalty without affording opportunity of
hearing to the Assesse - writ petition -
patent breach of principle of natural
justice - impugned order quashed with
cost of Rs. 10,000/- matter remitted back
to proceed afresh in accordance with law,
after affording opportunity of hearing.
(Para - 9, 17, 18, 19)
788 INDIAN LAW REPORTS ALLAHABAD SERIES
(B) Tax Law - Constitution of India, 1950
- Article 226, - Central Goods & Service
Tax Act, 2017/U.P. Goods and Service Tax
Act, 2017 - Sections 74, 75(4) & 107- Writ
Petition - Validity of impugned assessment
order on the ground of breach of principle
of natural justice - objection taken
counter - alternative remedy - it is settled
law that alternative remedy is not a
complete bar to entertain a writ petition
U/A 226 - writ petition allowed with cost
with
direction
to
Commissioner
Commercial Tax U.P. through Registrar
General - to ensure & follow the principles
of nature justice in the St. of U.P. by the
Assessing Authorities.(Para - 13, 15, 20)

Writ Petition Allowed. (E-11)

List of Cases cited: - '

1. U.O.I. & ors. Vs M/s. Jesus Sales Corporation
AIR 1996 SC 1509

2. Himmatlal Harilal Mehta Vs St. of M.P., AIR
1954 SC 403,

3. Collector of Customs Vs Ramchand Sobhraj
Wadhwani, AIR 1961 SC 1506,

4. Collector Of Customs & Excise, Cochin & ors.
Vs A. S. Bava, AIR 1968 SC 13,

5. M.P. St. Agro Industries Development Corpn.
Ltd. & anr. Vs Jahan Khan (2007) 10 SCC 88,

6. Dhampur Sugar Mills Ltd. Vs St. of U.P. & ors.
(2007) 8 SCC 338,

7. BCPP Mazdoor Sangh Vs NTPC (2007) 14 SCC 234.

8. Rajasthan St. Electricity Board Vs U.O.I.,
(2008) 5 SCC 632,

9. Mumtaz Post Graduate Degree College Vs
University of Lucknow, 6 (2009) 2 SCC 630,

10.
Godrej
Sara
Lee
Ltd.
Vs
Assistant
Commissioner (AA), (2009) 14 SCC 338,

11. U.O.I. Vs Mangal Textile Mills (I) (P) Ltd.,
(2010) 14 SCC 553,
12. U.O.I. Vs Tantia Construction (P) Ltd.,
(2011) 5 SCC 697,

13. Southern Electricity Supply Co. of Orissa Ltd.
Vs Sri Seetaram Rice Mill, (2012) 2 SCC 108,

14. St. of M.P. Vs Sanjay Nagaich (2013) 7 SCC 25,

15. St. of H.P. Vs Gujarat Ambuja Cement Ltd.,
(2005) 6 SCC 499,

16. Star Paper Mills Ltd. Vs St. of U.P. & ors., JT
(2006) 12 SC 92,

17. State of Tripura Vs Manoranjan Chakraborty,
(2001) 10 SCC 740,

18. Paradip Port Trust vs Sales Tax Officer and
Ors. (1998) 4 SCC 90,

19. Feldohf Auto & Gas Industries Ltd. Vs U.O.I.
(1998) 9 SCC 710,

20. Whirlpool Corporation Vs Registrar of
Trademarks (1998) 8 SCC 1;

21. Guruvayur Devasworn Managing Committee
Vs C.K. Rajan (2003) 7 SCC 546,

22. Siemens Ltd. Vs St. of Mah.(2006) 12 SCC 33,

23. Kaikhosrou (Chick) Kavasji Framji of Indian
Inhabitant Vs U.O.I. (2019) 20 SCC 705,

24. M/s Shree Bhawani Paper Mills Ltd. Vs St. of
U.P. & Another (Writ Tax No. 255/2012, order
dt. 10.09.2015),

25. M/s. Rapti Commissions Agency Vs U.O.I.
(2010) 1 AllLJ. 710,

26. Oudh Sugar Mill Vs St. of U.P. (2015) 3 AllLJ
774 (para 27).

(Delivered by Hon'ble Surya Prakash
Kesarwani, J.
 &
Hon'ble Jayant Banerji, J.)

1. Heard Sri Abhinav Mehrotra,
learned counsel for the petitioner and
3 All. Bharat Mint & Allied Chemicals, Budaun Vs. Commisioner Commercial Tax & Ors.
789
learned standing counsel for the State -
respondents.

2. This writ petition has been filed
praying for the following relief:

"1. The Hon'ble Court may be
pleased to issue a writ, order or direction
in the nature of CERTIORARI, calling for
the Record of proceedings from Revenue
and to thereafter be further pleased to setaside and quash the IMPUGNED Order of
Adjudication Dt. 09.11.2021 [ANNEXURE
NO.7] and connected demand of tax which
is made is gross violation of the principles
of natural Justice; NO oral hearing in the
matter was afforded to Petitioner, adverse
material has not been confronted to
Petitioner resulting in a most UNFAIR
TRIAL.

2. The Hon'ble Court may be
pleased to issue a writ, order or direction
in the nature of CERTIORARI to set aside
and quash the IMPUGNED Order of
Adjudication Dt. 09.11.2021 which is made
is gross disregard to Judicial Discipline
and without meeting the mandate of Law as
contained under Section 74(2) of the GST
Act.

3. The Hon'ble Court may be
pleased to issue a writ, order or direction
in the nature of MANDAMUS commanding
Revenue authorities to reconsider the case
of the Petitioner, lawfully and in goodfaith, in the light of submissions filed by
Petitioner, and with supplying of relief
upon documents and after affording due
and proper opportunity of hearing."

Submissions

3. Learned counsel for the petitioner
submits that the impugned assessment order
creating demand of tax, interest and penalty,
has
been
passed
without
affording
opportunity of hearing contemplated in
Section 75(4) of the Central Goods and
Services Tax, 2017/ U.P. Goods and Services
Tax, 2017 (hereinafter referred to as "the Act
2017") and thus, the impugned order being
patently in breach of principles of natural
justice, is unsustainable and deserves to be
quashed.

4. Learned standing counsel submits
that the petitioner has an alternative remedy
of appeal under Section 107 of the Act, 2017.
Therefore,
the
writ
petition
is
not
maintainable.

Discussion & Findings

5. We have carefully considered the
submissions of learned counsel for the
parties.

Question

The two question involved in this
writ petition are as under :-

(i) Whether opportunity of personal
hearing is mandatory under Section 75(4) of
the CGST/UPGST Act 2017 ?

(ii) Whether under the facts and
circumstances of the case the impugned
adjudication order has been passed in breach
of
principle
of
natural
justice
and
consequently it deserves to be quashed in
exercise of powers conferred under Article
226 of the Constitution of India ?

6. We have perused the show cause
notice dated 09.09.2021 in which it has been
mentioned as under:

"You may appear before the
undersigned for personal hearing either in
790 INDIAN LAW REPORTS ALLAHABAD SERIES
person or through representative for
representing your case on the date, time
and venue, if mentioned in the table
below."

7.

In
the
table
below
the
aforementioned lines, date, time and venue
of
personal
hearing
has
not
been
mentioned. Section 75(4) of the Act, 2017
provides that opportunity of personal
hearing shall be granted where a request is
received in writing from the person
chargeable with tax or penalty or where any
adverse decision is contemplated against
such person.

8 . Section 75(4) of the Act, 2017
reads as under:

"An opportunity of hearing shall
be granted where a request is received in
writing from the person chargeable with tax
or penalty, or where any adverse decision
is contemplated against such person."

9. From perusal of Section 75(4) of
the Act, 2017 it is evident that opportunity
of hearing has to be granted by authorities
under the Act, 2017 where either a request
is received from the person chargeable with
tax or penalty for opportunity of hearing or
where any adverse decision is contemplated
against such person. Thus, where an
adverse decision is contemplated against
the person, such a person even need not to
request for opportunity of personal hearing
and it is mandatory for the authority
concerned to afford opportunity of personal
hearing before passing an order adverse to
such person.

10. In the counter affidavit the
respondents have taken the stand that no
opportunity of hearing is required before
passing the assessment order. In support of
their contention the respondents have relied
upon the judgment of Hon'ble Supreme
Court in Union of India and Others Vs.
M/s.Jesus Sales Corporation AIR 1996
SC 1509. Perusal of the judgment in the
case of M/s. Jesus Sales Corporation
(supra) shows that the observation 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 notice,
opportunity of personal hearing has not
been afforded to the petitioner. Thus the
legislative mandate of Section 75(4) of the
Act to the authorities to afford opportunity
3 All. Bharat Mint & Allied Chemicals, Budaun Vs. Commisioner Commercial Tax & Ors.
791
of hearing to the assessee i.e. to follow
principles of natural justice, has been
completely violated by the respondents
while passing the impugned order.

13. The stand taken by the
respondents in the counter affidavit that
the writ petition is not maintainable as
the petitioner has an alternative remedy
of appeal under Section 107 of the Act,
can also not be accepted inasmuch as it is
settled law that availability of alternative
remedy is not a complete bar to entertain
a writ petition under Section 226 of the
Constitution of India. Certain exceptions
have been carved out by Hon'ble Supreme
Court that a writ petition under Article 226
of the Constitution of India may be
entertained even there is an alternative
remedy. One of the principle in this regard
is that if the order impugned has been
passed in gross violation of principles of
natural justice. It is admitted case of the
respondents that no opportunity of personal
hearing, as contemplated under Section
75(4) of the Act, 2017, was afforded to the
petitioner before passing the impugned
order.

14. During the course of hearing of
this writ petition, learned standing counsel
has produced before us a photo stat copy of
the order of the Assessing Authority
relating to the impugned order and perusal
thereof shows that no opportunity of
hearing as contemplated under Section
75(4) of the Act, 2017 was not afforded to
the petitioner. Thus, there being patent
breach of principles of natural justice, the
present writ petition is maintainable against
the impugned order.

15. Article 226 of the Constitution of
India confers very vide powers on High
Courts to issue writs but this power is
discretionary and the High Court may
refuse to exercise the discretion if it is
satisfied that the aggrieved person has
adequate or suitable remedy elsewhere. It is
a rule of discretion and not rule of
compulsion or the rule of law. Even though
there may be an alternative remedy, yet the
High Court may entertain a writ petition
depending upon facts of each case. It is
neither possible nor desirable to lay down
inflexible rule to be applied rigidly for
entertaining
a
writ
petition.
Some
exceptions to the rule of alternative remedy
as settled by Hon'ble Supreme Court are as
under:-

(i) Where there is complete lack
of jurisdiction in the officer or authority to
take the action or to pass the order
impugned.

(ii) Where vires of an Act,
Rules, Notification or any of its provisions
has been challenged.

(iii) Where an order prejudicial to
the writ petitioner has been passed in total
violation of principles of natural justice.

(iv) Where enforcement of any
fundamental right is sought by the
petitioner.

(v) Where procedure required
for decision has not been adopted.

(vi) Where Tax is levied without
authority of law.

(vii) Where decision is an abuse
of process of law.

(viii) Where palpable injustice
shall be caused to the petitioner, if he is
forced to adopt remedies under the statute
792 INDIAN LAW REPORTS ALLAHABAD SERIES
for enforcement of any fundamental rights
guaranteed under the Constitution of India.

(ix) Where a decision or policy
decision has already been taken by the
Government rendering the remedy of
appeal to be an empty formality or futile
attempt.

(x) Where there is no factual
dispute but merely a pure question of
law or interpretation is involved.

(xi) Where show cause notice
has been issued with preconceived or
premeditated or closed mind.

16. The above principles are supported
by the law laid down by Hon'ble Supreme
Court in the case of Himmatlal Harilal
Mehta v. State of Madhya Pradesh, AIR
1954 SC 403, Collector of Customs v.
Ramchand Sobhraj Wadhwani, AIR 1961
SC 1506, Collector Of Customs & Excise
,Cochin & Ors. vs A. S. Bava, AIR 1968
SC 13, Dr. Smt. Kuntesh Gupta vs
Management
Of
Hindu
Kanya
Mahavidyalaya, L.K. Verma v. HMT Ltd.
and anr., (2006) 2 SCC 269, Paras 13 and
20,
M.P.
State
Agro
Industries
Development Corpn. Ltd. & Anr. vs.
Jahan Khan (2007) 10 SCC 88 para 12,
Dhampur Sugar Mills Ltd. v. State of U.P.
and others (2007) 8 SCC 338, BCPP
Mazdoor Sangh Vs. NTPC (2007) 14 SCC
234 (para 19), Rajasthan State Electricity
Board v. Union of India, (2008) 5 SCC 632
(para 3), Mumtaz Post Graduate Degree
College Vs. University of Lucknow,(2009)
2 SCC 630 (para 22 and 23), Godrej Sara
Lee Limited v. Assistant Commissioner
(AA), (2009) 14 SCC 338. 14, Union of
India v. Mangal Textile Mills (I) (P) Ltd.,
(2010) 14 SCC 553 (paras 6,7,10 and 12),
Union of India v. Tantia Construction (P)
Ltd., (2011) 5 SCC 697, Southern
Electricity Supply Co. of Orissa Ltd. v. Sri
Seetaram Rice Mill, (2012) 2 SCC 108
(paras 79,80,81,82,86,87 and 88), State of
M.P. Vs. Sanjay Nagaich (2013) 7 SCC 25
(para 34,35,38,39), State of H.P. vs.
Gujarat Ambuja Cement Ltd., (2005) 6
SCC 499 (para 11 to 19), Star Paper Mills
Ltd. Vs. State of U.P. and others, JT (2006)
12 SC 92, State of Tripura vs. Manoranjan
Chakraborty, (2001) 10 SCC 740 para 4;
Paradip Port Trust vs Sales Tax Officer
and Ors. (1998) 4 SCC 90, Feldohf Auto &
Gas Industries Ltd. Vs. Union of India
(1998) 9 SCC 710; Isha Beebi Vs. Tax
Recovery Officer (1976) 1 SCC 70 (para
5); Whirlpool Corporation Vs. Registrar
of
Trademarks
(1998)
8
SCC
1;
Guruvayur
Devasworn
Managing
Committee Vs C.K. Rajan (2003) 7 SCC
546 (para 67, 68), Oryx Fisheries Pvt. Ltd.
Vs. Union of India & Others (2010)13 SCC
427 (Paras 27 to 38), Mangilal Vs. State of
M.P. (1994) 4 SCC 564 (Para 6), Siemens
Ltd. VS. State of Maharashtra (2006) 12
SCC 33 (para 9 & 11), Kaikhosrou (Chick)
Kavasji Framji of Indian Inhabitant Vs.
Union of India (2019) 20 SCC 705 (para
59) and judgments of this Court in Writ
Tax No. 255 of 2012 (M/s Shree Bhawani
Paper Mills Ltd. Vs. State Of U.P. and
Another) decided on 10.09.2015, M/s.
Rapti Commissions Agency Vs. Union of
India (2010) 1 AllLJ. 710 :(2009) 244 ELT
8 and Oudh Sugar Mill Vs. State of U.P.
(2015) 3 AllLJ 774 (para 27).

17. For all the reasons aforestated, the
impugned order dated 9.11.2021 under
Section 74 of the Act for the tax period
April (year 2019-20) can not be sustained
and is hereby quashed.

18. Liberty is granted to the
respondents to pass an order afresh in
3 All. Rochana Agarwal C/o Ved Prakash Agarwal Vs. Assistant Commisioner of Income Tax,
 Sitapur & Ors.
793
accordance with law, after affording
opportunity of personal hearing to the
petitioner.

19. Writ petition is allowed to the
extent indicated above with cost of
Rs.10,000/-.

20. A copy of this order be sent by the
Registrar General of this Court to the
Commissioner,
Commercial
Tax
U.P.
Lucknow who shall ensure that principles
of natural justice as contemplated under
Section 75(4) of the CGST/UPGST Act
2017
be
followed
by
Proper
Officers/Assessing Authorities in the State
of Uttar Pradesh.
----------
(2022)03ILR A793
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 28.03.2022

BEFORE

THE HON'BLE DEVENDRA KUMAR
UPADHYAYA, J.
HON'BLE SUBHASH VIDYARTHI, J.

Writ Tax No. 37 of 2022

Rochana
Agarwal
C/o
Ved
Prakash
Agarwal ...Petitioner
Versus
Assistant Commissioner of Income Tax,
Sitapur & Ors. ...Respondents

Counsel for the Petitioner:
Surangama Sharma

Counsel for the Respondents:
Manish Misra, A.S.G.I., Dr. Ravi Kumar
Mishra

Civil Law - Constitution of India, 1950 -
Article 226, - Income Tax Act, 1961 -
Sections 10(38), 133(6), 143, 147, 148 &
151 - Validity of Notice U/s 148 of Act,
1961 as well as order passed by ACIT
rejecting her objections against initiation
of re-assessment proceedings
- writ
petition - scope of power of judicial
review while scrutinizing a notice issued
U/s 148 of Act, - Section 147 provides Reassessment can be initiated only if the
Assessing officer has reason to believe
that any income chargeable to tax has
escaped assessment for any assessment
year - in petitioner's case Assessing
officer has gone through the income tax
return and other related documents of the
Assesse and has observed that he Assesse
is a beneficiary of receiving bogus entries
which is believable - as such no case is
made out to interfere - sufficiency or
correctness of the material cannot be
considered at stage - accordingly writ
petition dismissed. (Para - 24, 26, 27, 28,)

Writ Petition Dismissed. (E-11)

List of Cases cited: -

1. Raymond woolen Mills Ltd. Versus I.T.O.,
(1999) 236 ITR 36 (SC)

2. Raymond Woollen Mills Ltd. Vs ITO, (2008)
14 SCC 218

3. CIT Vs Techspan India (P) Ltd., (2018) 6 SCC
685,

4. Indra Prastha Chemicals Pvt. Ltd. & ors. Vr.
CIT & another, 2004 SCC OnLine All 2133.

5. Phool Chand Bajrang Lal Vs ITO, (1993) 4
SCC 77

(Delivered by Hon'ble Subhash Vidyarthi, J.)

1. Heard Shri Suyash Agrawal and
Ms. Surangama Sharma, learned counsel
for the petitioner and Shri Manish Misra,
learned counsel for the respondents.

2. By means of this writ petition filed
under Article 226 of the Constitution of
India, the petitioner has challenged the