# Eveready Industries India Ltd., Lko v. State of U.P. & Anr

- **Citation:** (2024) 5 ILRA 2109
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2024-05-31
- **Case number:** Writ Tax No. 114 of 2024
- **Bench:** Mrs. Sangeeta Chandra, Brij Raj Singh
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/eveready-industries-india-ltd-lko-v-state-of-u-p-anr-52049
- **Pages:** 15

## Headnote

Civil Law - Uttar Pradesh Goods and
Services Tax Act, 2017-Company was
registered under UPGST Act-audit notice issuedsurvey of the premise was conducted-another
notice of FORM GST ADT-01 was issued on
similar grounds-Petitioner complied with all the
directions-not
given
information
regarding
action taken in furtherance of audit noticesshow cause notice issued relying upon audit
FORM GST ADT-01-no audit report was ever
issued to the Petitioner-notice without date, time
and place of hearing-mandate of sec 75 (4)
provides personal hearing-not granted personal
hearing-stating that action taken u/s 74(9) does
not provide for personal hearing-sec. 75 clearly
St.s that it describes the 'General Provisions
relating to Determining tax'-sub-section (4)
followed by sub sec.(5) requires an officer to
adjourn a hearing on the request of person
chargeable to tax-such word can only be
interpreted to mean giving "personal hearing"-
impugned orders set aside.

W.P. allowed. (E-9)

List of Cases cited:

## Text

_Characters 0–39,853 of 50,851. This is a partial read: ask again with offset=39853 for what follows._

5 All. Eveready Industries India Ltd., Lko. Vs. State of U.P. & Anr.
2109
must be filed by the Department after such
payment is made.

23. With the above directions, this
writ petition is allowed.
----------
(2024) 5 ILRA 2109
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 31.05.2024

BEFORE

THE HON'BLE MRS. SANGEETA CHANDRA, J.
THE HON'BLE BRIJ RAJ SINGH, J.

Writ Tax No. 114 of 2024

Eveready Industries India Ltd., Lko.
 ...Petitioner
Versus
State of U.P. & Anr. ...Respondents

Counsel for the Petitioner:
Atma Ram Verma

Counsel for the Respondents:
C.S.C.

Civil Law - Uttar Pradesh Goods and
Services Tax Act, 2017-Company was
registered under UPGST Act-audit notice issuedsurvey of the premise was conducted-another
notice of FORM GST ADT-01 was issued on
similar grounds-Petitioner complied with all the
directions-not
given
information
regarding
action taken in furtherance of audit noticesshow cause notice issued relying upon audit
FORM GST ADT-01-no audit report was ever
issued to the Petitioner-notice without date, time
and place of hearing-mandate of sec 75 (4)
provides personal hearing-not granted personal
hearing-stating that action taken u/s 74(9) does
not provide for personal hearing-sec. 75 clearly
St.s that it describes the 'General Provisions
relating to Determining tax'-sub-section (4)
followed by sub sec.(5) requires an officer to
adjourn a hearing on the request of person
chargeable to tax-such word can only be
interpreted to mean giving "personal hearing"-
impugned orders set aside.

W.P. allowed. (E-9)

List of Cases cited:

1. Writ- Tax No.1029 of 2021: Bharat Mint &
Allied Chemicals Vs Commissioner, Commercial
Tax & ors., (2022) Vol.48 VLJ 325, decided on
04.03.2022;

2. Writ Tax No.551 of 2023: M/s Mohini Traders
Vs St. of U.P. & anr., decided on 03.05.2023

3. Writ Tax No.44 of 2024: M/s Mahendra
Educational Pvt. Ltd. Vs St. of U.P., decided on
05.03.2024

4. M/s Trutuf Safety Glass Industries Vs
Commissioner of Sales Tax, UP , 2007 (7) SCC
242

5. Commissioner of Sales Tax Vs Parson Tools &
Plants, 1975 (4) SCC 22

6. Godrej and Boyce Manufacturing Co. Ltd.&
anr., 2017 (7) SCC 421

7. Pearl Berg Vs Varty, (1972) 2 All ER 6

8. Institute of Chartered Accountants of India Vs
M/s Price Waterhouse & anr., AIR 1998 Supreme
Court 74

9. D.R. Venkatachalam & ors., etc Vs Deputy
Transport Commissioner & ors., AIR 1977
Supreme Court 842

10. Bharat Aluminium Company Vs Kaiser
Aluminium Technical Services Inc., reported in
2012 (9) SCC 552

11. Canada Sugar Refining Co. Ltd.Vs The
Queen (Canada) 1898 AC 735

12. Commissioner of Customs (Import), Mumbai Vs
Dilip Kumar & Co.& ors., 2018 (9)22 SCC page 1

(Delivered by Hon'ble Mrs. Sangeeta
Chandra, J.)
2110 INDIAN LAW REPORTS ALLAHABAD SERIES

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 of the UPGST
Act vide Reference No. ZD090823132533D
dated 07.08.2023 issued in FORM GST
DRC-01 by Respondent no.2 (Annexure
No.2)."

3. It is the case of the petitioner that the
company was registered under Uttar Pradesh
Goods and Services Tax Act, 2017 (for short
'the Act'). An audit notice was issued to the
petitioner on 05.05.2022 vide FORM GST
ADT-01 by the Joint Commissioner (Tax
Audit), Commercial Tax, Lucknow, requiring
the petitioner to produce books of accounts
and present its case regarding due discharge of
tax liabilities. A survey of the premises of the
petitioner was conducted by the Revenue
Officials on 11.05.2022. Another notice was
issued in FORM GST ADT-01 to the
petitioner on 05.01.2023 on similar grounds.
The petitioner claims to have complied with all
the directions issued by the respondents,
however, it was not given any information
regarding the action taken in furtherance of
audit notices dated 05.05.2022 and 05.01.2023
by the respondent authorities. As per the
provisions of Section 65(4) of the Act, if the
respondents failed to complete the audit
exercise after the lapse of three months from
the date of audit, unless the said period has
been explicitly extended, it shall be deemed to
have concluded upon expiration of the said
period. No draft audit report was prepared or
issued to the petitioner in FORM GST ADT02. A show cause notice was issued to the
petitioner on 07.08.2023 relying upon the audit
FORM GST ADT-01, that were issued on
05.05.2022 and on 05.01.2023. No audit report
was ever issued to the petitioner.

4. The impugned show cause notice does
not provide any date, place and time of hearing
despite the same being mandatory procedure.
In the Columns specified for date, place and
time of hearing, the show cause notice
mentions NA (not applicable) thereby denying
the petitioner any opportunity of hearing. The
petitioner submitted its reply on 06.11.2023
and in the said reply, the petitioner has
specifically prayed that it may be given
personal hearing, if the officer is not satisfied
with the written explanation given in reply to
the show cause notice.

5. Learned counsel for the petitioner
has argued that despite the mandate of
Section 75(4) of the Act providing personal
hearing
and
despite
the
petitioner
specifically asking for personal hearing, no
opportunity of personal hearing was
granted and the impugned order was passed
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
5 All. Eveready Industries India Ltd., Lko. Vs. State of U.P. & Anr.
2111
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 the case of M/s Mohini
Traders (supra) and M/s Mahendra
Educational Pvt. Ltd. (supra) by two Coordinate Division Benches and he has read
out the judgment of the Division Bench in
Bharat Mint & Allied Chemicals (supra),
wherein the Division Bench has framed two
questions to decide; the first related to
whether opportunity of personal hearing is
mandatory under Section 75(4) of the
CGST/UPGST Act 2017; and second
question was 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 deserved to be quashed in
exercise of powers conferred under Article
226 of the Constitution of India.

9. The Co-ordinate Bench dealt with
the notice issued to the petitioner under
Section 75(4) of the Act and observed that
under the column meant for the date, time
and place of personal hearing, the officer
has noted NA (not applicable) and then has
quoted the language of Section 75(4) of the
Act. To decide the controversy, it is
appropriate to quote the judgement of
Bharat Mint & Allied Chemicals (supra) in
extenso :-

"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
2112 INDIAN LAW REPORTS ALLAHABAD SERIES
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
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."

10. The Court thereafter observed
that the stand taken by the respondents
that the petitioner has alternative remedy
of appeal under Section 107 of the Act
cannot be accepted. Insofar as it is settled
law
that
availability
of
alternative
remedy, is not a complete bar to entertain
a writ petition under Article 226 of the
Constitution of India and has referred to
exceptions that have been carved out to
alternative
remedy
by
the
Hon'ble
Supreme Court with regard to three cases
i.e. (i) where there is complete lack of
jurisdiction in the officer or authority to
take the action or to pass the order
impugned; or (ii) where vires of an Act,
Rules,
Notification
or
any
of
its
provisions has been challenged; or (iii)
where an order prejudicial to the writ
petitioner has been passed in total
violation of principles of natural justice.
There are other exceptions also, which
have been mentioned in sub-clauses (iv)
to (xi) of the Division Bench judgment,
which are being quoted herein-below:-

"(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
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.
5 All. Eveready Industries India Ltd., Lko. Vs. State of U.P. & Anr.
2113

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

11. The Division Bench in the case of
M/s Mohini Traders (supra) has placed
reliance upon the judgement rendered in the
case of M/s Bharat Mint & Allied
Chemicals (supra) and observed in similar
terms in paragraphs 8 and 9 as follows:-

"8. Even otherwise in the context
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 observed in paragraph 8 as
follows:-

"8. 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."

13. It has been argued on the basis of
observations made by the three Division
Benches of this Court that the law is settled
insofar as Section 75(4) of the Act is
concerned. The officer should not only
issue a show cause notice, but also give
personal hearing where a request has been
received in writing from the person
chargeable with tax or penalty or where any
adverse decision is contemplated against
any such person.

14. Learned counsel for the Staterespondents has pointed out that Section 74
of the Act, which relates to determination
of tax not paid or short paid or erroneously
refunded or input tax credit wrongly
availed or utilized by reason of fraud or any
willful- misstatement or suppression of
facts. Section 74 of the Act in its entirety is
quoted below:-

"Section 74. Determination of tax
not paid or short paid or erroneously
refunded or input tax credit wrongly
availed or utilised by reason of fraud or any
wilful-misstatement or suppression of facts.

(1) Where it appears to the
proper officer that any tax has not been
paid or short paid or erroneously refunded
or where input tax credit has been wrongly
availed or utilised by reason of fraud, or
any wilful-misstatement or suppression of
facts to evade tax, he shall serve notice on
the person chargeable with tax which has
not been so paid or which has been so short
paid or to whom the refund has erroneously
2114 INDIAN LAW REPORTS ALLAHABAD SERIES
been made, or who has wrongly availed or
utilised input tax credit, requiring him to
show cause as to why he should not pay the
amount specified in the notice along with
interest payable thereon under section 50
and a penalty equivalent to the tax specified
in the notice.

(2) The proper officer shall issue
the notice under sub-section (1) at least six
months prior to the time limit specified in
sub-section (10) for issuance of order.

(3) Where a notice has been
issued for any period under sub-section (1),
the proper officer may serve a statement,
containing the details of tax not paid or
short paid or erroneously refunded or input
tax credit wrongly availed or utilised for
such periods other than 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 wilfulmisstatement 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 subsection (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 subsection (5) falls short of the amount
actually payable, he shall proceed to issue
the notice as provided for in sub-section (1)
in respect of such amount which falls short
of the amount actually payable.

(8) Where any person chargeable
with tax under sub-section (1) pays the said
tax along with interest payable under
section 50 and a penalty equivalent to
twenty-five per cent. of such tax within
thirty days of issue of the notice, all
proceedings in respect of the said notice
shall be deemed to be concluded.

(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.

(10) The proper officer shall
issue the order under sub-section (9) within
a period of five years from the due date for
furnishing of annual return for the financial
year to which the tax not paid or short paid
or input tax credit wrongly availed or
utilised relates to or within five years from
the date of erroneous refund.

(11) Where any person served
with an order issued under sub-section (9)
pays the tax along with interest payable
thereon under section 50 and a penalty
equivalent to fifty per cent. of such tax
within thirty days of communication of the
order, all proceedings in respect of the said
notice shall be deemed to be concluded."

15. The action taken against the
petitioner under Section 74(9) of the Act
does not provide for personal hearing to be
given to the concerned person chargeable
with tax or penalty. It only states that the
5 All. Eveready Industries India Ltd., Lko. Vs. State of U.P. & Anr.
2115
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.

16. Learned counsel for the petitioner,
however, has pointed out that Section 75 of
the Act which, as has been published in the
text book, is under sub-heading of "General
Provisions Relating to Determination of
Tax". It has been argued that Section 75 of
the Act will apply as a general procedure to
be adopted in all actions that are proposed
under Sections 73 and 74 of the Act and the
procedure prescribed under Section 75 of
the Act will have to be followed by the tax
authorities even for determination of tax
under Section 74 of the Act.

17. Learned counsel appearing for
State-respondents has referred to Section
75 (2) of the Act and says that the language
of Section 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 willfulmisstatement 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 sub-section (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 subsection (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 out sub-sections (5), (6), (7), (8) and
(9) of Section 75 of the Act. Section 75 of
the Act in its entirety is quoted below:-

"Section 75. General provisions
relating to determination of tax.

(1) Where the service of notice or
issuance of order is stayed by an order of a
court or Appellate Tribunal, the period of
such stay shall be excluded in computing
the period specified in sub-sections (2) and
(10) of section 73 or sub-sections (2) and
(10) of section 74, as the case may be.

(2)
Where
any
Appellate
Authority or Appellate Tribunal or court
concludes that the notice issued under subsection (1) of section 74 is not sustainable
for the reason that the charges of fraud or
any willful-misstatement or suppression of
facts 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 sub-section
(1) of section 73.

(3) Where any order is required
to be issued in pursuance of the direction of
the Appellate Authority or Appellate
Tribunal or a court, such order shall be
issued within two years from the date of
communication of the said direction.

(4) 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
2116 INDIAN LAW REPORTS ALLAHABAD SERIES
decision is contemplated against such
person.

(5) The proper officer shall, if
sufficient cause is shown by the person
chargeable with tax, grant time to the said
person and adjourn the hearing for reasons
to be recorded in writing:

Provided
that
no
such
adjournment shall be granted for more than
three times to a person during the
proceedings. (6) The proper officer, in his
order, shall set out the relevant facts and
the basis of his decision.

(7) The amount of tax, interest
and penalty demanded in the order shall
not be in excess of the amount specified in
the notice and no demand shall be
confirmed on the grounds other than the
grounds specified in the notice.

(8)
Where
the
Appellate
Authority or Appellate Tribunal or court
modifies the amount of tax determined by
the proper officer, the amount of interest
and
penalty
shall
stand
modified
accordingly, taking into account the
amount of tax so modified.

(9) The interest on the tax short
paid or not paid shall be payable whether
or not specified in the order determining
the tax liability.

(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 subsection (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 in
accordance with a return furnished under
section 39 remains unpaid, either wholly or
partly, or any amount of interest payable on
such tax remains unpaid, the same shall be
recovered under the provisions of section
79.

(13) Where any penalty is
imposed under section 73 or section 74, no
penalty for the same act or omission shall
be imposed on the same person under any
other provision of this Act."

20. Learned counsel for the petitioner
has also argued that Section 75(4) of the
Act would be rendered otiose if this Court
comes to the conclusion that the argument
raised by the learned counsel for the Staterespondents is liable to be accepted as
Section 74(1) of the Act also contemplates
issuance of a notice and calling for a reply.
It has been submitted that Sections 73, 74
and 75 of the Act lay down one integrated
scheme regarding imposition of tax or
penalty and the procedure to be followed by
the Taxing Officer.

21. This Court having considered the
submissions made by the learned counsel
for the parties has gone through the leading
5 All. Eveready Industries India Ltd., Lko. Vs. State of U.P. & Anr.
2117
judgment in the case of M/s Bharat Mint &
Allied Chemicals (supra) and finds that the
said judgment although has read into the
language of Section 75(4) of the Act and the
right of "personal" hearing, it has not
mentioned any casus omissus on the part of
the legislature reading into the statute
words like "personal" hearing" as the Act
itself only states that an opportunity of
hearing shall be given.

22. The golden rule for construing Wills,
Statutes, and in fact, all written instruments
has been stated in Grey versus Pearson
(1857) 6 HL cases 61 as: -

"the grammatical and ordinary
sense of the words is to be adhered to,
unless that would lead to some absurdity or
some repugnance or inconsistency with the
rest of the instrument, in which case the
grammatical and ordinary sense of the
words may be modified, so as to avoid that
absurdity and inconsistency, but no
farther"

23. However Jervis, C J, in Abley v
Dale, 11, CB 378; as quoted by the
Supreme Court in the case of M/s Trutuf
Safety
Glass
Industries
versus
Commissioner of Sales Tax, UP , 2007 (7)
SCC 242, has further observed that the
latter part of this golden rule must,
however, be applied with with much
caution. "If the precise words used are plain
and unambiguous, in a statute, we are
bound to construe them in their ordinary
sense, even though it leads in our view of
the case, to an 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 a subsequent Statute,
or even if there is casus omissus in a
Statute, the language of which is otherwise
plain and unambiguous, the Court is not
competent to supply the omission by
engrafting on it or introducing in it, under
the
guise
of
interpretation,
or
by
implication, something that it thinks to be a
general principle of justice and equity. To
do so, would be entrenching upon the
preserve of the legislature, the primary
function of a Court of law, being jus dicere
and not jus dare.

25.

In
Godrej
and
Boyce
Manufacturing Company Limited Vs
Deputy Commissioner of I.T., Mumbai
and another, 2017 (7) SCC 421; 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
2118 INDIAN LAW REPORTS ALLAHABAD SERIES
literal rule. It further observed that it is the
bounden duty and obligation of the Court to
interpret the Statue as it is. It further
observed that it is contrary to all rules of
construction to read words into a Statute
which the legislature in its wisdom, has
deliberately not incorporated.

26. Lord Hailsham in Pearl Berg
versus Varty, (1972) 2 All ER 6; observed
in regard to importation of the principles of
natural justice into a Statute, which is a
clear and complete code by itself, thus:-

"it is true, of course that the
courts will lean heavily against any
construction of a Statute which would be
manifestly unfair. But they have no power
to amend or supplement the language of a
Statute, merely because in one view of the
matter, a subject feels himself entitled to a
larger degree of say in the making of a
decision than a Statute awards him. Still
less is it the function of the courts to form
first a judgement on the fairness of an act
of Parliament and then to amend or
supplement it with new provisions so as to
make it conform to that judgement,- -."

27. As a matter of first principle, a
casus omissus cannot be supplied by the
Court, unless there is a clear case of
necessity and when reason is found within
the Statute itself.(See Padmasundara Rao
(dead) and others Vs State of Tamil Nadu
and others AIR 2002 Supreme Court 1334).

28. In Institute of Chartered
Accountants of India versus M/s Price
Waterhouse and another, AIR 1998
Supreme Court 74; the Supreme Court
had
observed
that
the
object
of
interpreting a Statute is to ascertain the
intention of the legislature in enacting it.
The intention 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 which the
provision to be interpreted is somewhat
fitted. They are not entitled to usurp
legislative function under the guise of
interpretation.

30. The Supreme Court in the case of
Bharat Aluminium Company vs Kaiser
Aluminium Technical
Services
Inc.,
reported in 2012 (9) SCC 552, has held that
the Court must proceed on the footing that
the legislature intended what it has said.
Even where there is a casus omissus, it is
for others than the Courts to remedy the
5 All. Eveready Industries India Ltd., Lko. Vs. State of U.P. & Anr.
2119
defect. it has quoted the House of Lords in
Duport Steels Ltd Vs. Sirs, 1980, All ER
529 (HL) in observing:-

"- - the role of the Judiciary is
confined to ascertain from the words that
Parliament has approved as expressing its
intention what that intention was, and to
give effect to it. Where the meaning of the
statutory
words
are
plain
and
unambiguous, it is not for the judges to
invent fancied ambiguities as an excuse for
failing to give effect to the plain meaning
because they themselves consider that the
consequences of doing so would be
inexpedient, or even unjust or immoral.
....,Under
our
constitution,
it
is
Parliament's opinion on these matters that
is paramount.."

31. In Canada Sugar Refining
Company Limited versus The Queen
(Canada) 1898 AC 735, Lord Davey
observed that "the good expositor of an Act
of Parliament should make construction on
all the parts together, and not of one part
only by itself. Every clause of a Statute is
to be construed with reference to the
context and other clauses of the Act, so as,
as far as possible, to make a consistent
enactment of the whole Statute ..."

32. Two principles of construction, one
relating to casus omissus, and the other in
regard to reading the Statute as a whole, -
appear to be well settled. Under the first
principle, the casus omissus cannot be
supplied by the Court, except in the case of
clear necessity, and when reason for it is
found in the four corners of the Statute itself,
but at the same time a casus omissus should
not be readily inferred, and for that purpose,
all parts of the Statute or the section must be
construed together, and every clause of a
section should be construed with reference to
the context and other clauses thereof, so that
the construction to be put on a particular
provision makes it consistent of the whole
Statute. This would be more so if literal
construction of a particular clause leads to
manifestly absurd or anomalous results,
which 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 interpretation of charging
section of taxation Statute, this rule of
interpretation is mandatory that if there are two
views possible in the matter of interpretation of
the charging section, the one favourable to the
assessee needs to be applied.

34. The Supreme Court further
observed
that
the
principles
of
2120 INDIAN LAW REPORTS ALLAHABAD SERIES
interpretation of statutes come in handy
here. In spite of the fact that experts in the
field assist in drafting Act and Rules, there
are many occasions where the language
used and the phrases employed in the
Statute are not perfect. Therefore, Judges
and Courts need to interpret the words. The
purpose of interpretation is essentially to
know the intention of the legislature.
Whether the legislature intended to apply
the law in a given case; whether the
legislature intended to give discretion to
enforcing authority or to adjudicating
agency to apply the law, are essentially
questions to which answers can be given
only
by
knowing
the
intention
of
Legislation. Apart from the general
principles of interpretation of statutes, there
are certain internal aids and external aids,
which are tools for interpreting the Statutes.
The long title, the preamble, the heading,
the
marginal
note,
punctuation,
illustrations, definitions, or exclusionary
clause, proviso to a section, explanation,
examples, a Schedule to the Act, et cetera
are internal aids to construction. The
external
aids
to
construction
are
Parliamentary debates, history leading to
the legislation, other statutes which have a
bearing, dictionaries, thesaurus etc. It is
well accepted that a Statute must be
construed according to the intention of the
legislature and the Courts should act upon
the true intention of the legislation while
applying the law and while interpreting the
law. If a statutory provision is open to more
than one meaning, the Court has to choose
the interpretation which represents the
intention of the legislature. In other words,
legislative intention i.e. the true or legal
meaning of an enactment is derived by
considering the meaning of the words used
in the enactment in the light of any
discernible purpose or object, which
comprehends the mischief and its remedy
to which the enactment is directed. The
well settled principle is that when the words
in
a
Statute
are
clear,
plain
and
unambiguous and only one meaning can be
inferred, the courts are bound to give effect
to the said meaning irrespective 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.