# M/s ANS Handicrafts v. Commissioner, Commercial Tax & Anr

- **Citation:** (2023) 2 ILRA 1074
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2023-01-25
- **Case number:** Writ Tax No. 1523 of 2022
- **Bench:** Rajesh Bindal, C.J. J.J. Munir
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-ans-handicrafts-v-commissioner-commercial-tax-anr-49698
- **Pages:** 6

## Headnote

Civil Law - U.P. Goods and Service Tax Act,
2017-Registration
certificate
of
Petitionerregistered under U.P. Goods and Service Taxnotice for assessment issued u/s 74 of the Actno opportunity of hearing-no details upon which
action
is
proposed-impugned
order
is
unreasoned, non speaking-quashed.

W.P. allowed. (E-9)

List of Cases cited:

## Text

1074 INDIAN LAW REPORTS ALLAHABAD SERIES
they are governed are described in the
succeeding Chapters.

(b) An employee already in
permanent
service
on
the
date
of
enforcement of these rules shall be given an
option to elect these new rules or to
continue to be governed by the existing
rules applicable to him.

(c)
No
employees
shall
be
allowed option to choose only a part of the
Scheme except as otherwise specifically
provided for in these rules.

(d) Option once exercised shall
be final."

46. A plain reading of these rules shows
that they apply to permanent employees,
serving in State aided educational institutions,
whether run by a Local Body or by a private
management. The condition for application of
the Rules of 1964 is recognition by a
competent Authority for the purposes of
payment of grant-in-aid. The grant-in-aid
envisaged
under
the
Rules
after
the
enactment of the Act of 1978 would mean the
maintenance grant envisaged under Section
2(f) of the Act of 1978. The said Statute
regulates payment of salaries to teachers of
basic schools and statutorily defines grant-inaid. It envisages a wholesome maintenance
grant and not some kind of an ad hoc or
limited grant that can be withdrawn like the
one provided to primary schools of the class
where the petitioners teach on the happening
of contingencies, such as numbers of students
of the Scheduled Castes and Scheduled
Tribes falling below 50%. The grant provided
by the Social Welfare Department at the
relevant time for the purpose of promoting
education amongst certain marginalized
sections of the society in a particular age
group without any permanence or continuity
to it, cannot make it into a grant-in-aid
envisaged under the Rules of 1964. The
grant-in-aid envisaged under the said Rules
by no principle can include within its fold an
ad hoc or limited grant provided by the
Department of Social Welfare to the
institutions, where the petitioners teach.

47. These Rules, therefore, cannot form
basis for the petitioners' entitlement to receive
pensions,
insurance
and
contributory
provident fund. The order of the Division
Bench dated 11.08.2006 in Special Appeal
No. 180 of 2000 would entitle the petitioners
to benefits other than salary, if there were
rules or conditions applicable. This Court
finds that there are none to support that kind
of a claim.

48. In the considered view of this Court,
therefore, there is no infirmity in the order
impugned and the petitioners are not entitled
to any relief.

49. The writ petitions fail and are
dismissed. There shall be no order as to costs.
----------
(2023) 2 ILRA 1074
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 25.01.2023

BEFORE

THE HON'BLE RAJESH BINDAL, C.J.
THE HON'BLE J.J. MUNIR, J.

Writ Tax No. 1523 of 2022

M/s ANS Handicrafts ...Petitioner
Versus
Commissioner, Commercial Tax & Anr.
 ...Respondents

Counsel for the Petitioner:
Sri Pooja Talwar

Counsel for the Respondents:
2 All. M/s ANS Handicrafts Vs. Commissioner, Commercial Tax & Anr.
1075
Sri Ankur Agarwal, Standing Counsel

Civil Law - U.P. Goods and Service Tax Act,
2017-Registration
certificate
of
Petitionerregistered under U.P. Goods and Service Taxnotice for assessment issued u/s 74 of the Actno opportunity of hearing-no details upon which
action
is
proposed-impugned
order
is
unreasoned, non speaking-quashed.

W.P. allowed. (E-9)

List of Cases cited:

1. Bajrang Trading Ltd. Vs St. of U.P. & ors.
(2020) UPTC (Vol. 104) 400

2. Balaji Enterprises Vs Principal Additional
Director General (2022) 80 MTNDX 448 (Delhi)

3. Kranti Associates Pvt. Ltd. Vs Masood Ahmed
Khan, (2010) 9 SCC 496

4. Harinagar Sugar Mills Ltd. Vs Shyam Sunder
Jhunjhunwala, AIR 1961 SC 1669

5. Som Datt Datta Vs U.O.I., AIR 1969 SC 414;
Bhagat Raja Vs U.O.I., AIR 1967 SC 1606;

6. Travancore Rayon Ltd. Vs U.O.I. (1969) 3 SCC
868;

7. Mahabir Prasad Santosh Kumar Vs St. of U.P,
(1970) 1 SCC 764;

8. Keshav Mills Co. Ltd. Vs U.O.I., (1973) 1 SCC
380;

9. U.O.I. Vs Mohan Lal Capoor, (1973) 2 SCC
836;

10. Woolcombers of India Ltd. Vs Workers
Union, (1974) 3 SCC 318;

11. Siemens Engg. and Mfg. Co. of India Ltd. Vs
U.O.I., (1976) 2 SCC 981;

12. Maneka Gandhi Vs U.O.I., (1978) 1 SCC
248;

13. Rama Varma Bharathan Thampuram Vs St.
of Kerala, (1979) 4 SCC 782;

14. Gurdial Singh Fijji Vs St. of Pun., (1979) 2
SCC 368;

15. H.H Shri Swamiji of Shri Amar MuttVs
Commr.,
Hindu
Religious
&
Charitable
Endowments Deptt.,(1979) 4 SCC 642;

16. Bombay Oil Industries (P) Ltd. Vs U.O.I.,
(1984) 1 SCC 141;

17. Ram Chander Vs U.O.I., (1986) 3 SCC 103;

18. Star Enterprises Vs City and Industrial
Development Corpn. of Maharashtra Ltd., (1990)
3 SCC 280;

19. S.N Mukherjee Vs U.O.I., (1990) 4 SCC 594;

20. Maharashtra St. Board of Secondary and
Higher Secondary Education Vs K.S Gandhi,
(1991) 2 SCC 716;

21. M.L Jaggi Vs MTNL, (1996) 3 SCC 119 and
Charan Singh Vs Healing Touch Hospital, (2000)
7 SCC 668

22. ORYX Fisheries Pvt. Ltd. Vs U.O.I. (2010) 13
SCC 427

(Delivered by Hon'ble J.J. Munir, J.)

ORDER

1. By means of the instant writ
petition, the petitioner is challenging the
order dated March 11, 2019 vide which the
registration certificate of the petitioner has
been cancelled.

2. Learned counsel for the petitioner
submitted that petitioner is a registered firm
engaged in trading of hardware and
aluminium goods. It was duly registered
under U.P. Goods and Service Tax. A
survey was conducted on February 11,
2019 at the business premises of the
petitioner wherein 29 loose papers were
found. As according to the Department,
1076 INDIAN LAW REPORTS ALLAHABAD SERIES
certain discrepancies were found in the
stock, the turn-over of the petitioner was
enhanced on the presumption that there
were
suppressed
sales.
Notice
for
assessment was issued under Section 74 of
U.P. Goods and Service Tax Act, 2017
(hereinafter referred to as "the Act") for the
period April' 2018 to February' 2019. Huge
demand of more than ₹6 crore was raised.
The petitioner preferred appeal, which was
finally partially accepted. On the other
hand, a notice was issued to the petitioner
on February 26, 2019 to show cause as to
why the registration certificate of the
petitioner be not cancelled. Nothing was
mentioned therein as to the reasons for
issuing the notice except the generic term
"In case, Registration has been obtained by
means of fraud, wilful misstatement or
suppression of facts." Without affording
opportunity of hearing to the petitioner, as
there were no ground mentioned for
cancellation of registration, and without
assigning any reason, order dated March
11, 2019 was uploaded on the website
cancelling the registration of the petitioner.
The argument raised is that the notice
issued by the Department to the petitioner
has to be action oriented giving complete
details on the basis of which action is
proposed and after due opportunity of
hearing, a reasoned order is required to be
passed. In the case in hand, both are
lacking, hence the order deserves to be set
aside.
In
support
of
the
aforesaid
contentions, reliance is placed on Bajrang
Trading Ltd. Vs. State of U.P. and others
(2020) UPTC (Vol. 104) 400 and Balaji
Enterprises Vs. Principal Additional
Director General (2022) 80 MTNDX 448
(Delhi).

3. On the other hand, learned
counsel for the respondents submitted
that the fact by itself that a survey was
carried out at the premises of the
petitioner and certain loose papers were
recovered
on
the
basis
of
which
assessment
was
framed
clearly
establishes
that
the
petitioner
was
indulging in unaccounted sales and was
evading
tax.
Immediately
after
the
survey, the notice was issued to the
petitioner to show cause as to why
registration certification of the petitioner
be not cancelled. The reasons are well
mentioned in the notice. Due opportunity
of hearing was afforded to petitioner
which the petitioner failed to avail of and
the order of cancellation of certificate
was passed. There is no illegality therein.

4. Heard learned counsel for the
parties and perused the paper-book.

5. To appreciate the contentions
raised by learned counsel for the parties,
it would be apt to first extract the shows
cause notice issued to petitioner on
February 26, 2019. The reasons assigned
in the show-cause notice proposing
cancellation of registration are extracted
below:

"In case, Registration has been
obtained by means of fraud, wilful
misstatement or suppression of facts."

6. The petitioner was called upon to
appear on March 7, 2019.

7. The order passed in furtherance to
the aforesaid show-cause notice on March
11, 2019 is extracted below:

"Order
for
Cancellation
of
Registration

This has reference to your reply dated
08/03/2019 in response to the notice to
2 All. M/s ANS Handicrafts Vs. Commissioner, Commercial Tax & Anr.
1077
show cause dated 26/02/2019 whereas no
reply to notice to show cause has been
submitted.

The effective date of cancellation of
your registration is 26/02/2019.

Determination of amount payable
pursuant to cancellation:

Accordingly, the amount payable by
your and the computation and basis thereof
is as follows:

The amounts determined as being
payable above are without prejudice to any
amount that may be found to be payable
you on submission of final return furnished
by you.

You are required to pay the following
amounts on or before 21/03/2019 failing
which the amount will be recovered in
accordance with the provisions of the Act
and rules made thereunder.

Head
Centra
l Tax
State Tax/
UT Tax
Integr
ated
Tax
Cess
Tax
Interest
0
0
0
0
Penalty
0
0
0
0
Others
0
0
0
0
Total
0.0
0.0
0.0
0.0

8. A perusal of the aforesaid order
passed by the authority concerned shows
that there is total non application of the
mind as the order is bereft of any reason,
whatsoever. Even the facts of the case have
not been referred. In the absence of brief
facts and the reasons for coming to a
conclusion, it is not possible for the next
higher Court or authority to appreciate as to
what weighed with the authority concerned
to reach the conclusion and as to whether
there was application of mind while
passing the order or the order is arbitrary.

9. Hon'ble the Supreme Court in
Kranti Associates Private Limited v.
Masood Ahmed Khan, (2010) 9 SCC 496,
while referring to its earlier judgments
in Harinagar Sugar Mills Ltd. v. Shyam
Sunder Jhunjhunwala, AIR 1961 SC
1669; Som Datt Datta v. Union of India,
AIR 1969 SC 414; Bhagat Raja v. Union
of India, AIR 1967 SC 1606; Travancore
Rayon Ltd. v. Union Of India (1969) 3
SCC 868; Mahabir Prasad Santosh
Kumar v. State of U.P, (1970) 1 SCC 764;
Keshav Mills Co. Ltd. v. Union of India,
(1973) 1 SCC 380; Union of India v.
Mohan Lal Capoor, (1973) 2 SCC 836;
Woolcombers of India Ltd. v. Workers
Union, (1974) 3 SCC 318; Siemens Engg.
and Mfg. Co. of India Ltd. v. Union of
India, (1976) 2 SCC 981; Maneka
Gandhi v. Union of India, (1978) 1 SCC
248;
Rama
Varma
Bharathan
Thampuram v. State of Kerala, (1979) 4
SCC 782; Gurdial Singh Fijji v. State of
Punjab, (1979) 2 SCC 368; H.H Shri
Swamiji of Shri Amar Mutt v. Commr.,
Hindu
Religious
and
Charitable
Endowments Deptt., (1979) 4 SCC 642;
Bombay Oil Industries (P) Ltd. v. Union
of India, (1984) 1 SCC 141; Ram
Chander v. Union of India, (1986) 3 SCC
103; Star Enterprises v. City and
Industrial
Development
Corpn.
of
Maharashtra Ltd., (1990) 3 SCC 280;
S.N Mukherjee v. Union Of India.,
(1990) 4 SCC 594; Maharashtra State
Board
of
Secondary
and
Higher
Secondary Education v. K.S Gandhi,
(1991) 2 SCC 716; M.L Jaggi v. MTNL,
(1996) 3 SCC 119 and Charan Singh v.
Healing Touch Hospital, (2000) 7 SCC
668 opined that every order passed by a
quasi-judicial
authority
or
even
an
administrative authority affecting the rights
of parties, must be a speaking order. It must
not be like the "inscrutable face of a
1078 INDIAN LAW REPORTS ALLAHABAD SERIES
sphinx".
The
superior
court
cannot
effectively exercise its power of judicial
review unless in the order impugned, facts
and reasons have been stated in detail.
Merely giving an opportunity of hearing is
not enough. Wherever an order can be
subject to appeal or judicial review, the
necessity to record reasons is even greater.
It ensures that the decision is not a result of
caprice, whim or fancy but was arrived at
after considering the relevant facts and the
law. It enables an aggrieved party to
demonstrate before the higher court that the
reasons on which his claim has been
rejected, are erroneous. It operates as a
deterrent against possible arbitrary action
by any authority invested with judicial
power. The aim is to prevent unfairness or
arbitrariness
in
reaching
conclusions.
Reasons are the links between the materials
on which certain conclusions are based and
the actual conclusions. The faith of the
people in administrative authorities can be
sustained only if they act fairly and dispose
of the matters before them by wellconsidered orders.

10. Following the aforesaid judgment
in Kranti Associates Private Limited's case
(supra), Hon'ble the Supreme Court in
ORYX Fisheries Private Ltd. v. Union of
India (2010) 13 SCC 427 said:

"39. On the requirement of disclosing
reasons by a quasi-judicial authority in
support of its order, this Court has recently
delivered a judgment in the case of Kranti
Associates Pvt. Ltd. & Anr. v. Sh. Masood
Ahmed Khan & Others on 8th September
2010.

40. In M/s Kranti Associates (supra), this
Court after considering various judgments
formulated certain principles in para 51 of the
judgment which are set out below:

a. In India the judicial trend has
always been to record reasons, even in
administrative decisions, if such decisions
affect anyone prejudicially.

b. A quasi-judicial authority must
record reasons in support of its conclusions.

c. Insistence on recording of reasons is
meant to serve the wider principle of justice
that justice must not only be done it must
also appear to be done as well.

d. Recording of reasons also operates
as a valid restraint on any possible arbitrary
exercise of judicial and quasi-judicial or
even administrative power.

e. Reasons reassure that discretion has
been exercised by the decision maker on
relevant grounds and by disregarding
extraneous considerations.

f. Reasons have virtually become as
indispensable a component of a decision
making process as observing principles of
natural justice by judicial, quasi-judicial
and even by administrative bodies.

g. Reasons facilitate the process of
judicial review by superior Courts.

h. The ongoing judicial trend in all
countries committed to rule of law and
constitutional governance is in favour of
reasoned decisions based on relevant facts.
This is virtually the life blood of judicial
decision making justifying the principle
that reason is the soul of justice.

i. Judicial or even quasi-judicial
opinions these days can be as different as
the judges and authorities who deliver
them. All these decisions serve one
common purpose which is to demonstrate
by reason that the relevant factors have
been
objectively
considered.
This
is
important for sustaining the litigants' faith
in the justice delivery system.

j. Insistence on reason is a requirement
for
both
judicial
accountability
and
transparency.
2 All. Sadashiv Dwivedi Vs. State of U.P. & Ors.
1079

k. If a Judge or a quasi-judicial
authority is not candid enough about
his/her decision making process then it is
impossible to know whether the person
deciding is faithful to the doctrine of
precedent
or
to
principles
of
incrementalism.

l. Reasons in support of decisions
must be cogent, clear and succinct. A
pretence of reasons or `rubber-stamp
reasons' is not to be equated with a valid
decision making process.

m.
It
cannot
be
doubted
that
transparency is the sine qua non of restraint
on abuse of judicial powers. Transparency
in decision making not only makes the
judges and decision makers less prone to
errors but also makes them subject to
broader scrutiny. (See David Shapiro in
Defence of Judicial Candor (1987) 100
Harward Law Review 731-737).

n. Since the requirement to record
reasons emanates from the broad doctrine
of fairness in decision making, the said
requirement is now virtually a component
of human rights and was considered part of
Strasbourg Jurisprudence. See (1994) 19
EHRR 553, at 562 para 29 and Anya vs.
University of Oxford, 2001 EWCA Civ
405, wherein the Court referred to Article 6
of European Convention of Human Rights
which requires, "adequate and intelligent
reasons
must
be
given
for
judicial
decisions".

o. In all common law jurisdictions
judgments play a vital role in setting up
precedents for the future. Therefore, for
development of law, requirement of giving
reasons for the decision is of the essence
and is virtually a part of "Due Process".

11. In view of the above binding
authorities and taking into account the fact
that the order impugned in the case is hand
is totally unreasoned, non speaking and
shows no application of mind, in our
considered opinion, the same cannot be
sustained.

12. As a result, the writ petition is
allowed. Impugned order dated March 11,
2019, Annexure-3 to the writ petition, is
hereby quashed with liberty to the authority
to proceed again against petitioner in
accordance with law.
----------
(2023) 2 ILRA 1079
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 16.01.2023

BEFORE

THE HON'BLE RAJESH BINDAL, C.J.
THE HON'BLE J.J. MUNIR, J.

Writ Tax No. 33 of 2023

Sadashiv Dwivedi ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Anurag Dubey, Sri Amit Kumar Sharma

Counsel for the Respondents:
Sri Nimai Dass (Addl. Chief Standing
Counsel)

U.P. Motor Vehicles Taxation Rules ,
1998-Rule 18-Recovery citation issued on
account of motor vehicle tax-impugnedPetitioner
purchased
the
vehicle-it
was
hypothecated
with
M/s
Hinduja
Leyland
Finance Limited-vehicle was seized on account
of non payment in 2013-sold on 2015Petitioner had deposited the tax up till he had
the possession-financier is liable to pay the
tax-Petitioner filed an objection against the
recovery citation-objections are required to be
considered by the competent authority and
liability may be re-worked-.

W.P. disposed. (E-9)