# M/s Ansaldo STS Transport System India Pvt. Ltd v. State of U.P. & Ors

- **Citation:** (2021) 11 ILRA 760
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2021-10-26
- **Case number:** Writ Tax No. 511 of 2017
- **Bench:** Naheed Ara Moonis, Saumitra Dayal Singh
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-ansaldo-sts-transport-system-india-pvt-ltd-v-state-of-u-p-ors-46697
- **Pages:** 16

## Headnote

V.A.T. Act, 2008: Section 29(6), 32 - If second
or any subsequent ex-parte assessment order
was set aside (under section 32 of the Act), on
or before 30th September of an Assessment
Year, the limitation to pass a fresh assessment
order thereafter, would exist up to 31st March
of that Assessment Year. However, if the order
to set aside the second or the subsequent exparte assessment order was passed on or after
1st October of an Assessment Year, the
limitation to pass fresh assessment order
would stand extended upto 30th September of
the next Assessment Year. (Para 37)

The limitation to pass the fresh/second assessment
order/s existed up to the end of the Assessment Year
in which such (first) ex-parte assessment order was
set aside. Since the first ex-parte assessment order
11 All. M/s Ansaldo STS Transport System India Pvt. Ltd. Vs. State of U.P. & Ors.
761
was set aside on 11.01.2013, such limitation existed
up to 31.03.2013. However, by virtue of the first
proviso to Section 29(6), that limitation stood
extended upto 31.09.2013. (Para 35)

Writ Petition Allowed. (E-10)

List of Cases cited:

## Text

_Characters 0–39,961 of 58,914. This is a partial read: ask again with offset=39961 for what follows._

760 INDIAN LAW REPORTS ALLAHABAD SERIES
make a case as that of general public interest. A
person having a remote interest cannot be
permitted to become a party in the lis, as the
person who wants to become a party in a case,
has to establish that he has a proprietary right
which has been or is threatened to be violated,
for the reason that a legal injury creates a
remedial right in the injured person. A person
cannot be heard as a party unless he answers
the description of aggrieved party."
 (emphasis supplied)

10. In Ayaaubkhan Noorkhan Pathan v.
State of Maharashtra, (2013) 4 SCC 465, the
Apex Court has enumerated some of the
exceptional circumstances wherein a third
person, having no concern with the case, can be
heard. Paragraph 23 of the said report being
relevant is extracted below:

"23. Thus, from the above it is evident
that under ordinary circumstances, a third
person, having no concern with the case at hand,
cannot claim to have any locus standi to raise
any
grievance
whatsoever.
However,
in
exceptional circumstances as referred to above,
if the actual persons aggrieved, because of
ignorance, illiteracy, inarticulation or poverty,
are unable to approach the court, and a person,
who has no personal agenda, or object, in
relation to which, he can grind his own axe,
approaches the court, then the court may
examine
the
issue
and
in
exceptional
circumstances, even if his bona fides are
doubted, but the issue raised by him, in the
opinion of the court, requires consideration, the
court may proceed suo motu, in such respect."
 (emphasis supplied)

11. The petitioner is admittedly espousing
the cause of Gaon Sabha. By no stretch of
imagination, can it be said that the Gaon Sabha
is unable to approach this Court because of the
exceptional circumstances mentioned in the case
of Ayaaubkhan Noorkhan Pathan (supra).

12. For the foregoing reasons, the
petitioner
has
no
locus
to
invoke
the
extraordinary writ jurisdiction of this Court
under
Article
226
of
the
Constitution.
Accordingly, without entering into the merits of
the case, this writ petition is dismissed. No order
as to cost.
----------
(2021)12ILR A760
ORIGINAl JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 26.10.2021

BEFORE

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

Writ Tax No. 511 of 2017

M/s Ansaldo STS Transport System India Pvt.
Ltd. ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Nishant Mishra

Counsel for the Respondents:
C.S.C., Sri Manu Ghildayal, Sri C.B. Tripathi

A. Interpretation of Statute - Limitation - U.P.
V.A.T. Act, 2008: Section 29(6), 32 - If second
or any subsequent ex-parte assessment order
was set aside (under section 32 of the Act), on
or before 30th September of an Assessment
Year, the limitation to pass a fresh assessment
order thereafter, would exist up to 31st March
of that Assessment Year. However, if the order
to set aside the second or the subsequent exparte assessment order was passed on or after
1st October of an Assessment Year, the
limitation to pass fresh assessment order
would stand extended upto 30th September of
the next Assessment Year. (Para 37)

The limitation to pass the fresh/second assessment
order/s existed up to the end of the Assessment Year
in which such (first) ex-parte assessment order was
set aside. Since the first ex-parte assessment order
11 All. M/s Ansaldo STS Transport System India Pvt. Ltd. Vs. State of U.P. & Ors.
761
was set aside on 11.01.2013, such limitation existed
up to 31.03.2013. However, by virtue of the first
proviso to Section 29(6), that limitation stood
extended upto 31.09.2013. (Para 35)

Writ Petition Allowed. (E-10)

List of Cases cited:

1. CST Vs Sukhlal Ice & Cold Storage Co. 2008 NTN
(Vol. 36) 30 (distinguished)

2. Padma Sundara Rao (Dead) & ors. Vs St.of T.N. &
ors. (2002) 3 SCC 533 (followed)

3. Supdt. Of Taxes, Dhubri & ors. Vs Onkarmal
Nathmal Trust (1976) 1 SCC 766 (distinguished)

4. Baswaraj & anr. Vs Special Land Acquisition Officer
(2013) 14 SCC 81 (distinguished)

5. P. Ramachandra Rao Vs St.of Karnataka (2002) 4
SCC 578 (distinguished)

6.
Director
of
Inspection
of
Income
Tax
(Investigation), New Delhi & anr. Vs Pooran Mal &
Sons & Anr. (1975) 4 SCC 568 (distinguished)

7. Grindlays Bank Ltd. Vs Income Tax Officer, Calcutta
& ors. (1980) 2 SCC 191 (followed)

8. S.K. Traders Vs Additional Commissioner 2007 NTN
(Vol. 34) 345

9. Ram Nivas Vs St.of U.P. & ors. (2019) SCC OnLine
All 3537 (distinguished)

10. Deva Metal Powders (P) Ltd. Vs CTT (2008) 2 SCC
439

11. Thungabhadra Industries Ltd. Vs The Government
of Andhra Pradesh AIR 1964 SC 1372

12. T.S. Balram Vs Volkart Bros. (1971) 2 SCC 526
(SC)

13. CIT Vs Hero Cycles Pvt. Ltd. (1997) 8 SCC 502

(Delivered by Hon'ble Naheed Ara Moonis, J.
 &
Hon'ble Saumitra Dayal Singh, J.)

1. Heard Sri Nishant Mishra, learned
counsel for the petitioner and Sri Manu
Ghildayal, learned counsel for the Revenue.

2. Originally, the present petition was filed
to challenge the notice dated 29.05.2017 issued
to the petitioner by its assessing authority, under
Section 31 of the U.P.V.A.T. Act, 2008
(hereinafter referred to as the "Act") for the A.Y.
2008-09, seeking to rectify the order dated
22.02.2014 passed by the then assessing
authority of the petitioner, under Section 32 of
the Act. During pendency of this petition,
proceedings pursuant to that notice concluded.
Thus, the order dated 21.06.2017 came into
existence. Thereby, the assessing authority of
the petitioner concluded, the order dated
22.02.2014 and consequentially, the orders dated
18.07.2014 and 3.10.2015 [for A.Y. 2008-09
(U.P., Central and, Entry Tax)] suffered from a
mistake apparent on the face of record. The
order dated 21.06.2017 has been challenged
through amendment made to this writ petition. It
may be noted, by composite order dated
18.07.2014 the third ex-parte assessment order
had been framed against the petitioner. That exparte order had been recalled by the order dated
03.10.2015. Thus, at present, the second
composite ex-parte assessment order dated
18.09.2013, framed in the case of the petitioner
for A.Y. 2008-09 (U.P., Central and, Entry Tax),
has been revived.

3. Briefly, the petitioner is a duly
incorporated company. It is a registered dealer
engaged in executing works contracts, mainly
for the Indian Railways. For the A.Y. 2008-09, it
was first subjected to ex-parte assessment
orders, all dated 30.6.2012, framed under the
Act, the Central Sales Tax Act, 1956 (hereinafter
referred to as the "Central Act") and the Uttar
Pradesh Tax on Entry of Goods Act, 2007
(hereinafter referred to as the "Entry Tax Act").
The petitioner filed applications under Section
32 of the Act, to set aside the aforesaid first ex-
762 INDIAN LAW REPORTS ALLAHABAD SERIES
parte assessment orders dated 30.06.2012.
Those applications were allowed by orders dated
11.01.2013. The ex-parte assessment orders
dated 30.06.2012 were set aside. Thereafter, on
18.09.2013, the second - composite ex-parte
assessment order was framed against the
petitioner, for the A.Y. 2008-09 (U.P., Central
and, Entry Tax Act). Thereby, tax was assessed -
under the Act, Rs. 18,20,000/-; under the Central
Act, Rs. 1,08,40,000/- and under the Entry Tax
Act, Rs. 52,01,708/-. Against that order, the
petitioner filed (within time), another application
under Section 32 of the Act. It was allowed on
22.02.2014 and the aforesaid second-composite
ex parte order dated 18.09.2013 was set aside.
Consequently, the third - composite ex-parte
assessment order came to be framed against the
petitioner for the A.Y. 2008-09 (U.P., Central
and, Entry Tax), on 18.07.2014. Upon further
application filed by the petitioner under Section
32 of the Act, that ex-parte assessment order
was also set aside by order dated 03.10.2015.
Apparently, no further assessment order/s
was/were framed in the case of the petitioner for
A.Y. 2008-09 (U.P., Central and, Entry Tax) up
to 30.09.2016. Thereafter, those assessment
proceedings became time barred.

4. In these facts, on 19.12.2017, the
petitioner was served with an ex-parte order
dated 16.08.2016 passed under Section 31 of the
Act referable to the power of the assessing
authority to rectify mistakes apparent on the face
of the record - in the order dated 22.02.2014 i.e.,
the order passed under Section 32 of the Act, to
recall
the
second
-
composite
ex-parte
assessment order for A.Y. 2008-09 (U.P.,
Central and, Entry Tax). Therein, the petitioner's
assessing authority took a view that the order
dated 22.02.2014 had been passed outside the
prescribed period of limitation to frame a
fresh/second assessment order. It was therefore,
time
barred.
Consequently,
the
assessing
authority also passed order under Section 32 of
the Act (referable to the power of the assessing
authority to recall an ex-parte order), and
dismissed the further applications filed by the
petitioner to recall the order dated 18.09.2013. If
sustained, those orders would attach finality to
the second - composite ex-parte assessment
order dated 18.09.2013.

5. That order dated 16.08.2016, was
challenged by the petitioner in Writ Tax No.97
of 2017 (M/S Ansaldo STS Transports System
India Pvt. Ltd. Noida Vs. State of U.P. And 3
Others). It was allowed vide order dated
21.2.2017. For ready reference that order is
quoted below:

"We have heard Sri Nishant Mishra,
learned counsel for the petitioner and Sri C.B.
Tripathi, the special counsel for the State.

An ex parte assessment order was
passed on 18.09.2013 for the year 200809. The
said ex parte assessment order was set aside by
the order dated 22.02.2014, on the ground that
it was an ex parte order and no notice was given
to the petitioner.

Subsequently, assessment order of
18.07.2014 the petitioner again moved recall
application which was allowed and the ex parte
assessment order dated 18.07.2014 was set
aside
by
an
order
dated
03.10.2015.
Subsequently, the Assessing Authority passed ex
parte two orders dated 16.08.2016. One of them
is purported to an order under Section 31 of the
U.P Vat Act, 2008 modifying the earlier order.

In paragraph 41 of the writ petition, it
has been stated that the impugned orders passed
under Section 31 & 32 are ex parte orders
without issuing any notice to the petitioner and
without giving any opportunity of hearing.

Sri C.B. Tripathi, learned counsel for
the State upon instructions received to him and
upon a perusal of the impugned order fairly
11 All. M/s Ansaldo STS Transport System India Pvt. Ltd. Vs. State of U.P. & Ors.
763
concedes that the impugned orders have been
passed ex parte without giving opportunity of
hearing to the petitioner.

It is settled law that when an order has
been
passed
and
if the
same requires
modification, it is necessary for the Assessing
Authority to issue a notice and give an
opportunity of hearing before recalling the
order or modifying the said order. Since the
same was not given the impugned orders are
clearly in violation of the principles of natural
justice as embodied under Article 143 of the
Constitution of India.

Consequently, without going into any
other grounds, we allow the writ petition at the
admission stage itself.

We quash the impugned orders at the
admission stage itself without calling for a
counter affidavit.

The writ petition is allowed.

It would be open to the Assessing
Authority to pass fresh order after giving due
notice and opportunity of hearing to the
petitioner."

6. Thereafter, the petitioner's assessing
authority issued fresh/impugned notice to the
petitioner, on 29.05.2017, under Section 31 of
the Act, again seeking to rectify the order dated
22.02.2014. No other order was sought to be setaside or rectified. By the impugned order dated
21.06.2017,
the
assessing
authority
has
reasoned, since the limitation to frame the
second assessment order for A.Y. 2008-09 (U.P.,
Central and, Entry Tax), expired on 30.09.2013,
the order dated 22.02.2014 passed thereafter,
was beyond the time limitation prescribed under
Section 29(6) of the Act. Hence, the further
assessment proceedings (reopened in the case of
the petitioner) for the A.Y. 2008-09 (U.P.,
Central and, Entry Tax) were void-ab-initio.
Consequently, he has cancelled the subsequent
orders dated 18.07.2014 & 03.10.2015. Thus,
the second - composite ex-parte assessment
order dated 18.09.2013, for A.Y. 2007-08 (U.P.,
Central, and, Entry Tax) has been revived and
rendered final.

7. Relying on the provisions of Section 31,
32 & 29(6) of the Act, learned counsel for the
petitioner first submitted, the order dated
21.06.2017 was passed well beyond the statutory
period of three years prescribed under Section
31(1) of the Act. It is time barred. Then, it is his
submission, while allowing the earlier writ
petition vide order dated 21.02.2017, this Court
did not grant or create any fresh period of
limitation as may have allowed the assessing
authority to pass any order under Section 31 of
the Act, beyond the original period of limitation
that expired on 22.02.2017. In the context of suo
moto exercise of power, the limitation of three
years must be computed from the date
22.02.2014 when the order sought to be rectified
was passed. In absence of consent or waiver by
the
petitioner,
such
limitation
did
not
exist/survive.
Therefore,
the
order
dated
21.06.2017 is wholly time barred, for reason of
it being passed after the date 22.02.2017.

8. Reliance has been placed on a division
bench decision of this Court in the case of CST
Vs. Sukhlal Ice & Cold Storage Co., 2008
NTN (Vol. 36) 30, wherein, a co-ordinate bench
had, in the context of pari materia provisions of
Section 22 of the U.P. Trade Tax Act, 1948, held
- power to rectify any order could be exercised
suo-motu, by the competent authority/Court
within a period of three years from the date of
such order being passed.

9. Next, reliance has also been placed on a
five-Judge Constitution bench decision of the
Supreme Court in Padma Sundara Rao (Dead)
& Ors. Vs. State of T.N. & Ors., (2002) 3 SCC
764 INDIAN LAW REPORTS ALLAHABAD SERIES
533 to submit, a Writ Court could not, and, in
the present facts, it did not create any fresh
period of limitation, while allowing the
petitioner's earlier writ petition on 21.2.2017.

10. Then, reliance has been placed on
another five-Judge Constitution bench decision of
the Supreme Court in Supdt. Of Taxes, Dhubri &
Ors. Vs. Onkarmal Nathmal Trust, (1976) 1
SCC 766 to submit, jurisdiction could neither be
waived nor created and that, issue of notice under
the provisions of an Act relates to exercise of
jurisdiction. In the present facts, the limitation
expired
on
22.02.2017.
The
notice
dated
29.05.2017, issued thereafter was wholly without
jurisdiction.

11. Also, reliance has been placed on another
decision of the Supreme Court in Baswaraj &
Anr. Vs. Special Land Acquisition Officer,
(2013)14 SCC81 to submit, the Courts cannot
extend the period of limitation that had otherwise
expired.

12. Next, reliance has been placed on a
seven-Judge Constitution bench decision of the
Supreme Court in P. Ramachandra Rao Vs.
State of Karnataka, (2002) 4 SCC 578, to
submit, the Court cannot legislate - specifically, to
provide for the period of limitation, that may
otherwise not exist.

13. In view of the above law, a distinction
has been claimed to the ratio in Director of
Inspection of Income Tax (Investigation), New
Delhi and Another Vs. Pooran Mal & Sons and
Another, (1975) 4 SCC 568. Therein, the bar of
limitation was found to have been specifically
waived by the assessee. It has been thus submitted,
in absence of any consent or waiver granted by the
present petitioner, the bar of limitation exists in the
undisputed facts of the present case.

14. With reference to the decision in the
case of the Supreme Court in Grindlays Bank
Limited Vs. Income Tax Officer, Calcutta &
Ors., (1980) 2 SCC 191, it has been submitted,
the said decision may not come to the aid of the
revenue in face of the clear position of law
arising from the larger/Constitution bench
decision of the Supreme Court.

15. Then, with respect to the decision of
another coordinate bench of this Court, in the
case
of
S.K.
Traders
Vs.
Additional
Commissioner 2007 NTN (Vol. 34) 345, it has
been similarly submitted, that decision is also
distinguishable. According to learned counsel
for the petitioner, the correct position of law was
laid down in another division bench decision of
this Court in Ram Nivas Vs. State of U.P. and
Others (2019) SCC OnLine All 3537. Therein,
after taking note of the entire gamut of law, the
division bench applied the law laid down by the
Constitution bench of the Supreme Court, in
Padma Sundara Rao (supra) and distinguished
the ratio arising from the decision of the
Supreme Court in Director of Inspection of
Income Tax Vs. Pooran Mal (supra) and the
division bench decision of this Court in S.K.
Traders (supra).

16. Further, it has been submitted, even
otherwise, the order dated 22.02.2014 did not
suffer from any mistake apparent from the face
of record. Reliance has been placed on a
decision of the Supreme Court in Deva Metal
Powders (P) Ltd. Vs. CTT (2008) 2 SCC 439
to submit, a debatable question cannot be
subjected to proceedings to rectify a mistake
apparent from the face of record.

17. Last, it has been submitted, the
limitation to frame the third and all subsequent
assessment order/s in consequence of order/s
passed under Section 32 of the Act, would be the
same as prescribed to frame the second
assessment order, under Section 29(6) of the Act
read with the first and the second provisos
thereto. The order to set-aside the first ex-parte
11 All. M/s Ansaldo STS Transport System India Pvt. Ltd. Vs. State of U.P. & Ors.
765
orders (dated 30.06.2012) was passed on
11.01.2013. Therefore, the limitation to frame
the fresh/second assessment order existed up to
30th September 2013. The second - composite
ex-parte assessment order was framed on
18.09.2013. Upon the application to set aside
that assessment order/s filed within time, the
assessing authority did not commit any
jurisdictional error in setting aside that order on
22.02.2014. Occasioned by that order, the
limitation to pass the fresh/third assessment
order/s for A.Y. 2008-09 (U.P., Central and
Entry Tax), existed up to 30.09.2014. The third
composite assessment order was framed on
18.07.2014. Similarly, upon a further application
filed by the petitioner (within time), under
section 32 of the Act, the assessing authority did
not commit any mistake in setting aside that
order on 03.10.2015.

18. Opposing the writ petition, learned
standing counsel for the revenue has strongly
urged - in the present case, the order dated
28.07.2017 did not suffer from any lack of
limitation. This Court had clearly permitted the
assessing authority to pass a fresh order in
accordance with law. That direction had been
issued by this Court in exercise of its jurisdiction
under Article 226 of the Constitution of India.
Therefore, indisputably, the consequential notice
was issued within reasonable time therefrom i.e.,
almost within three months. Hence, the bar of
limitation claimed by the petitioner, did not exist,
or arise. He would also submit, by virtue of the
second proviso to section 29 (6) of the Act, the
limitation to frame the third assessment order (after
the second - composite ex-parte assessment order
had been set aside), would stand curtailed to the
balance period of limitation that survived on the
date of the second ex-parte assessment order being
framed i.e., up to 30.09.2013, only. Therefore, the
application to set aside the second - composite exparte assessment order dated 18.09.2013 could not
be allowed after the date 30.09.2013.

19. In short, it has been submitted, in
absence of surviving period of limitation to
frame a fresh assessment order, the order
seeking to recall the second - composite ex-parte
assessment order could not be passed, beyond
the date 30.09.2013. Consequentially, the order
dated 22.02.2014 setting aside the second -
composite ex-parte assessment order dated
18.09.2013 was wholly time barred and
therefore lacking in jurisdiction. Hence, the
assessing authority has not committed any error
in setting aside such order. That mistake was
clearly a mistake apparent on the face of record.

20. Having heard learned counsel for the
parties and having perused the record, as to the
first limb of submission advanced by learned
counsel for the petitioner, it is true, there was no
express consent given or waiver granted by the
petitioner and no such consent or waiver may be
inferred from a plain reading of the order dated
21.02.2017 passed in Writ Tax No. 97 of 2017.
Therefore, that part of the ratio of the decision of
the Supreme Court in Director of Inspection of
Income Tax Vs. Pooran Mal & Sons (supra)
is inapplicable to the facts of the present case.
However, this reasoning was taken note of in
Grindlays Bank Limited Vs. ITO (supra). It
may be discussed a little later.

21. At the same time, the five-Judge
Constitution bench decision of the Supreme
Court in the case of Padma Sundara Rao
(Dead) Vs. State of Tamil Nadu and Ors.
(supra) had arisen on different facts and law.
There, an issue had arisen, whether upon the
High Court having set aside the earlier
declaration made under Section 6 of the Land
Acquisition Act 1894, any fresh or further
period of limitation existed or could be claimed
under Clause (ii) of the first proviso to Section
6 (1) of that Act. For ready reference,
provisions of Section 6 of that Act are quoted
below:
766 INDIAN LAW REPORTS ALLAHABAD SERIES

"6. Declaration that land is required
for a public purpose.

(1) Subject to the provisions of Part
VII
of
this
Act, when
the
appropriate
Government is satisfied, after considering the
report, if any, made under section 5A,
subsection (2), that any particular land is
needed for a public purpose, or for a
Company, a declaration shall be made to that
effect under the signature of a Secretary to
such Government or of some officer duly
authorized to certify its orders and different
declarations may be made from time to time in
respect of different parcels of any land
covered by the same notification under section
4 subsection (1), irrespective of whether one
report or different reports has or have been
made (wherever required) under section 5A
subsection (2)

Provided that no declaration in
respect of any particular land covered by a
notification under section 4 subsection (1) -

(i) published
after
the
commencement
of
the
Land
Acquisition
(Amendment and Validation) Ordinance, 1967
but before the commencement of the Land
Acquisition (Amendment) Act, 1984, shall be
made after the expiry of three years from the
date of the publication of the notification; or

(ii) published
after
the
commencement
of
the
Land
Acquisition
(Amendment) Act, 1984, shall be made after
the expiry of one year from the date of the
publication of the notification:

Provided
further
that
no
such
declaration
shall
be
made
unless
the
compensation to be awarded for such property
is to be paid by a Company, or wholly or
partly out of public revenues or some fund
controlled or managed by a local authority.

Explanation. - In computing any of the
periods referred to in the first proviso, the
period during which any action or proceeding to
be taken in pursuance of the notification issued
under section 4 subsection (1), is stayed by an
order of a Court shall be excluded."

22. Considering that language of the
proviso to Section 6 of the Land Acquisition
(Amendment) Act, 1894 and the complete
absence of any statutory remedy of appeal etc.
provided against a declaration made under
Section 6 of the Act, the Supreme Court
reasoned - it was a distinctive feature viz-a-viz
Section 132(5) read with Section 132 (11) of the
Income Tax Act, 1961. It was held, under the
Income Tax Act, a power existed to remit a case
to the original authority or, for a fresh order to
be passed. Thus, besides the distinction arising
on account of lack of consent or waiver granted
by the petitioner (in that case), it was
recognized, even otherwise, the period of
limitation may survive in the context of a
proceeding under Section 132 (5) of the Income
Tax Act. Thus, it was observed as under:

"Learned counsel for the respondents
referred to some observations in Pooran Mal
case [(1975) 4 SCC 568 : 1975 SCC (Tax) 346 :
(1975) 2 SCR 104] which form the foundation
for decisions relied upon by him. It has to be
noted that Pooran Mal case [(1975) 4 SCC 568
: 1975 SCC (Tax) 346 : (1975) 2 SCR 104] was
decided on entirely different factual and legal
backgrounds. The Court noticed that the
assessee who wanted the Court to strike down
the action of the Revenue Authorities on the
ground of limitation had himself conceded to the
passing of an order by the Authorities. The
Court, therefore, held that the assessee cannot
take undue advantage of his own action.
Additionally, it was noticed that the time-limit
was to be reckoned with reference to the period
prescribed in respect of Section 132(5) of the IT
Act. It was noticed that once the order has been
11 All. M/s Ansaldo STS Transport System India Pvt. Ltd. Vs. State of U.P. & Ors.
767
made under Section 132(5) within ninety days,
the aggrieved person has got the right to
approach the notified authority under Section
132(11) within thirty days and that authority can
direct the Income Tax Officer to pass a fresh
order. That is the distinctive feature vis-à-vis
Section 6 of the Act. The Court applied the
principle of waiver and inter alia held that the
period of limitation prescribed therein was one
intended for the benefit of the person whose
property has been seized and it was open to that
person to waive that benefit. It was further
observed that if the specified period is held to be
mandatory, it would cause more injury to the
citizens than to the Revenue. A distinction was
made with statutes providing periods of
limitation for assessment. It was noticed that
Section 132 does not deal with taxation of
income. Considered in that background, ratio of
the decision in Pooran Mal case[(1975) 4 SCC
568 : 1975 SCC (Tax) 346 : (1975) 2 SCR 104]
has no application to the case at hand."

23. That view had been taken by the
Supreme Court in its earlier decision in
Grindlays Bank Limited Vs. ITO (supra) in
the context of a proceeding under the Income
Tax Act, 1961. Therein, after taking note of its
earlier decision in Director of Inspection of
Income Tax (Investigation), New Delhi and
Another Vs. Pooran Mal & Sons (supra), with
reference to an assessment order passed
consequent to an earlier direction issued by the
High Court, in writ jurisdiction, the Supreme
Court reasoned as under:

"7. .........Ordinarily, the High Court
does not substitute its own order for the order
quashed by it. It is, of course, a different case
where the adjudication by the High Court
establishes a complete want of jurisdiction in the
inferior court or tribunal to entertain or to take
the proceeding at all. In that event on the
quashing of the proceeding by the High Court
there is no revival at all. But although in the
former kind of case the High Court, after
quashing the offending order, does not substitute
its own order it has power nonetheless to pass
such further orders as the justice of the case
requires. When passing such orders the High
court draws on its inherent power to make all
such orders as are necessary for doing complete
justice between the parties. The interests of
justice require that any undeserved or unfair
advantage gained by a party invoking the
jurisdiction
of
the
court,
by
the
mere
circumstance that it has initiated a proceeding
in the court, must be neutralised. The simple fact
of the institution of litigation by itself should not
be permitted to confer an advantage on the party
responsible for it. The present case goes further.
The appellant would not have enjoyed the
advantage
of
the
bar
of
limitation
if,
notwithstanding
his
immediate
grievance
against the notice under s. 142(1) of the Income
Tax Act, he had permitted the assessment
proceeding to go on after registering his protest
before the Income Tax Officer, and allowed an
assessment order to be made in the normal
course.
In
an
application
under section
146 against the assessment order, it would have
been open to him to urge that the notice was
unreasonable and invalid and he was prevented
by sufficient cause from complying with it and
therefore the assessment order should be
cancelled. In that event, the fresh assessment
made under section 146 would not be fettered by
the bar of limitation. Section 153(3)(i) removes
the bar. But the appellant preferred the
constitutional jurisdiction of the High Court
under Article 226. If no order was made by the
High Court directing a fresh assessment, he
could contend as is the contention now before
us, that a fresh assessment proceeding is barred
by limitation. That is an advantage which the
appellant seeks to derive by the
mere
circumstance of his filing a writ petition. It will
be noted that the defect complained of by the
appellant in the notice was a procedural lapse at
best and one that could be readily corrected by
768 INDIAN LAW REPORTS ALLAHABAD SERIES
serving an appropriate notice. It was not a
defect effecting the fundamental jurisdiction of
the Income tax Officer to make the assessment.
In our opinion, the High Court was plainly right
in making the direction which it did. The
observations of this court in Director of
Inspection of Income Tax (Investigation), New
Delhi vs. Pooran Mall & Sons are relevant. It
said:

"The court in exercising its powers
under Article 226 has to mould the remedy to
suit the facts of a case. If in a particular case a
court takes the view that the Income Tax Officer,
while passing an order under section 132(5), did
not give an adequate opportunity to the party
concerned it should not be left with the only
option of quashing it and putting the party at an
advantage even though it may be satisfied that
on the material before him the conclusion
arrived at by the Income Tax Officer was correct
or dismissing the petition because otherwise the
party would get an unfair advantage. The power
to quash an order under Article 226 can be
exercised not merely when the order sought to
be quashed is one made without jurisdiction in
which case there can be no room for the same
authority to be directed to deal with it. But, in
the circumstances of a case, the court might take
the view that another authority has the
jurisdiction to deal with the matter and may
direct that authority to deal with it or where the
order of the authority which has the jurisdiction
is vitiated by circumstances like failure to
observe the principles of natural justice, the
court may quash the order and direct the
authority to dispose of the matter afresh after
giving the aggrieved party a reasonable
opportunity of putting forward its case.
Otherwise, it would mean that where a court
quashes an order because the principles of
natural justice have not been complied with, it
should not while passing that order permit the
tribunal or the authority to deal with it again
irrespective of the merits of the case."

The point was considered by the
Calcutta High Court in Cachar plywood Ltd. v.
Income Tax Officer and the High court, after
considering the provisions of section 153 of the
Income Tax Act, considered it appropriate,
while deposing of the writ petition, to issue a
direction to the Income Tax Officer to complete
the assessment which, but for the direction of the
High court, would have been barred by
limitation." (emphasis supplied)

24. the Supreme Court in Padma Sundar
Rao (Dead) Vs St. of Tamil Nadu (supra) is
material and pertinent to the facts of the present
case, as well. In the context of an order passed
under Section 32 of the Act, there clearly existed
a remedy of appeal under Section 55 of that Act.
In such appeal (where preferred), by virtue of
Section 55 (5)(b)(ii) of the Act, the appellate
authority would be vested with jurisdiction and
power to set aside the order impugned before it
and to direct the assessing authority to pass a
fresh order, after conducting such inquiry as
may be specified by the appeal authority. For
ready reference, provisions of Section 55 of the
Act may be noticed as under:

Section 55. Appeal

(1) Any dealer or other person
aggrieved by an order made by the assessing
authority, other than an order mentioned in
subsection (7) of section 48 may, within thirty
days from the date of service of the copy of the
order, after serving a copy of appeal memo on
the assessing authority or the Commissioner,
appeal to such authority (hereinafter referred to
as appellate authority), as may be prescribed:

Provided that where due to any
reason, any appellant fails to serve a copy of
appeal memo on the assessing authority before
filing appeal, he may serve copy of such appeal
memo within a time of one week from the date
on which appeal has been filed or within such
11 All. M/s Ansaldo STS Transport System India Pvt. Ltd. Vs. State of U.P. & Ors.
769
further time as the appellate authority may
permit.

(2) Where an appeal has been filed
against an order referred to in subsection (1),
the Commissioner may apply to the appellate
authority to examine the legality and propriety
of such order on such point as may be mentioned
in the application. A copy of such application
shall be served on the appellant and shall be
decided along with the appeal filed by the
appellant:

Provided that no application for
examination of legality and propriety shall be
entertained after the disposal of appeal:

Provided further that where the
Commissioner has filed an application, the
appellant shall not be entitled to withdraw
appeal filed by him.

Explanation For the purposes of this
section
Commissioner
includes
an
officer
authorised to file appeal on behalf of the
Commissioner before the Tribunal under section 57.

(3) No appeal against an assessment
order under this Act shall be entertained unless
the appellant has furnished satisfactory proof of
the payment of the amount of tax or fee due
under this Act on the turnover of sale or
purchase, or both, as the case may be, admitted
by the appellant in the tax returns filed by him
or at any stage in any proceedings under this
Act, whichever is greater.

(4)The
appeal
shall
be
in
the
prescribed form and shall be verified in the
prescribed manner.

(5)The appellate authority may, after
calling for and examining the relevant records
and after giving a reasonable opportunity of
being
heard
to
the
appellant
and
the
Commissioner

(a) in the case of an order of
assessment and penalty.

(i) confirm or annul such order ; or

(ii)vary such order by reducing or
enhancing the amount of assessment or penalty,
as the case may be, whether such reduction or
enhancement arises from a point raised in the
grounds of appeal or otherwise ; or

(iii) set aside the order and direct the
assessing authority to pass a fresh order after
such inquiry as may be specified; or

(iv) direct the assessing authority to
make such inquiry and to submit its report
within such time as may be specified in the
direction or within such extended time as it may
allow from time to time, and on the expiration of
such time the appellate authority may, whether
the report has been submitted or not decide the
appeal in accordance with the provisions of the
preceding sub-clauses; or

(b) in the case of any other order

(i) confirm, cancel or vary such order;
or

(ii) set aside the order and direct the
assessing authority to pass a fresh order after
such inquiry as may be specified:

Provided
that
nothing
in
this
subsection shall preclude the appellate authority
from dismissing the appeal at any stage with
such observations as it deems fit where the
appellant applies for withdrawal of the same
and no request for examination of legality or
propriety of order under appeal has been made
by the Commissioner.

(6) The appellate authority, may, on
the application of the appellant and after giving
770 INDIAN LAW REPORTS ALLAHABAD SERIES
the Commissioner a reasonable opportunity of
being heard stay, except the operation of order
appealed against, the realisation of the disputed
amount of tax, fee or penalty payable by the
appellant till the disposal of the appeal :

Provided that -

(i) where an order under appeal
involves dispute about tax, fee or penalty, no
stay order shall remain in force after thirty days
from the date on which the same has been
granted, if the appellant does not furnish
security to the satisfaction of the assessing
authority for payment of the amount, the
realisation whereof has been stayed within the
aforesaid period of thirty days;

(ii) no such application shall be
entertained unless it is filed along with the
memorandum of appeal under subsection (1);

(7) Section 5 of the Limitation Act,
1963,
shall
apply
to
appeals or
other
applications under this section.

(8)The appellate authority shall be
under the superintendence and control of the
Commissioner:

Provided that in the exercise of such
superintendence
and
control,
no
order,
instructions or directions shall be given by the
Commissioner so as to interfere with the
discretion of the Appellate Authority in the
exercise of its appellate functions.

(9) For the purposes of this section
service of an order passed by appellate authority
under this section and service of memo of appeal
on the State Representative, as defined in the
rules framed under this Act, shall be deemed to
be service on the Commissioner.

(10) All appeals arising out of the
same cause of action in respect of an assessment
year, as far as possible, shall be heard and
decided together."

25. Thus, it cannot be disputed, the
petitioner had a remedy of appeal against the
orders dated 16.08.2016. Therefore, it also
cannot be further disputed, if those appeals had
been filed, the appellate authority would have
been within its jurisdiction to set aside the orders
dated 16.08.2016 on a reasoning similar to that
adopted by this Court, in its order dated
21.02.2017. The consequence of such a finding
would naturally be - the matter would have been
remitted to the assessing authority to pass a fresh
order. Merely because the petitioner chose to
approach this Court under Article 226 of the
Constitution of India against the order dated
16.08.2016, it can never be said, the petitioner
was entitled to any better or other relief or
rights.

26. It would have been one thing if while
quashing the order dated 16.08.2016, this Court
had found, the said order suffered from an
inherent lack of jurisdiction. In that case, there
would be no question or occasion for any further
proceedings to arise. That is not the case here.
On the contrary, the order dated 21.02.2017
passed by this Court distinctly records - the
order dated 16.08.2016 was laconic on account
of non-compliance of the rules of natural justice.
Logically therefore, that order was found
competent in jurisdiction, but defective on
procedural aspects.

27. Looked in that light, the further
direction issued by the Court requiring the
assessing authority to conduct fresh proceeding
in accordance with law clearly is an order that
drew on the inherent powers of this Court,
consistent to the statutory scheme arising from
the plain language of Section 55 (5)(b)(ii) of the
Act.