# M/S Flipkart India Pvt. Ltd v. Sate of U.P. & Ors

- **Citation:** (2019) 2 ILRA 1089
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2019-08-28
- **Case number:** Writ Petition (Tax) No. 760 of 2017
- **Bench:** Bharati Sapru, Piyush Agrawal
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-flipkart-india-pvt-ltd-v-sate-of-u-p-ors-44562
- **Pages:** 7

## Headnote

A. U.P. Value Added Tax Act, 2008 - Section
29(6) - U.P. Value Added Tax Rules - Rule 72
- Central Sales Tax Act, 1956 (hereinafter
referred to as 'CST Act').-An order passed in
gross violation of the provision of the Act and
without proper service of notice upon the
petitioner is liable to be set aside-The
petitioner prayed for quashing of the
assessment orders dated 31.03.2017 for
Assessment Years 2012 - 13 and 2013-14
under the U.P. VAT Act as also CST Act, on
the ground that one was passed after the
limitation prescribed and the other, ex-parte
without any opportunity of hearing -
Allowing this petition, the High Court held -
The assessment orders dated 31.03.2017 for
the Assessment Year 2012-13 were beyond
the extended period of limitation prescribed
u/s 29(6). (Para 13, 14 & 15)

B. U.P. Value Added Tax Rules - Rule
72(h) mandates that in addition to
sending
a
personal
notice
through
process server, sending of notice by
registered post is mandatory. Where
notices were not sent by registered post,
presumption of service of notice through
the process server cannot arise. (Para 24)
C. The respondents were aware of the
change in address of the assessee on
account of two prior rounds of litigation with
the petitioner, yet notice by a fixation was
served
at
the
earlier
address.
The
assessment orders were passed without
proper service of notice upon the assessee
and were set-aside. (Para 20, 21, 23, 27 & 29)
Writ
petition
challenges
orders
dated
31.03.2017, for the assessment years 2012-13
and 2013-14.

Writ Petition allowed (E-4)

Precedent followed: -

## Text

2 All. M/S Flipkart India Pvt. Ltd. Vs State of U.P. & Ors.
1089
Apex Court as a relevant consideration.
The enormous recoveries of gold and
silver articles and also that of cash at the
instance of applicant cannot be said to be
either frivolous or planted at least at this
stage. It is not difficult to see that the
involvement of applicant in different
criminal offences over a period of time
speaks
about
the
delinquency
and
depraved nature of the offender and in the
considered opinion of this Court with
such
long
criminal
history
in
the
background, it does not appear judicially
prudent to release the applicant on bail.

7. For all these reasons therefore,
this Court does not see any good fresh
ground to take a different view in the
matter than the one that has already been
taken by this Court earlier.

8. Second bail application thus
stands dismissed.
----------

(2019)10ILR A 1089

ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 28.08.2019

BEFORE

THE HON'BLE BHARATI SAPRU, J.
THE HON'BLE PIYUSH AGRAWAL, J.

Writ Petition (Tax) No. 760 of 2017

M/S Flipkart India Pvt. Ltd. ...Petitioner
Versus
Sate of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Nishant Mishra, Sri Tarun Gulati, Sri
Ravi Kant

Counsel for the Respondents:
C.S.C.

A. U.P. Value Added Tax Act, 2008 - Section
29(6) - U.P. Value Added Tax Rules - Rule 72
- Central Sales Tax Act, 1956 (hereinafter
referred to as 'CST Act').-An order passed in
gross violation of the provision of the Act and
without proper service of notice upon the
petitioner is liable to be set aside-The
petitioner prayed for quashing of the
assessment orders dated 31.03.2017 for
Assessment Years 2012 - 13 and 2013-14
under the U.P. VAT Act as also CST Act, on
the ground that one was passed after the
limitation prescribed and the other, ex-parte
without any opportunity of hearing -
Allowing this petition, the High Court held -
The assessment orders dated 31.03.2017 for
the Assessment Year 2012-13 were beyond
the extended period of limitation prescribed
u/s 29(6). (Para 13, 14 & 15)

B. U.P. Value Added Tax Rules - Rule
72(h) mandates that in addition to
sending
a
personal
notice
through
process server, sending of notice by
registered post is mandatory. Where
notices were not sent by registered post,
presumption of service of notice through
the process server cannot arise. (Para 24)
C. The respondents were aware of the
change in address of the assessee on
account of two prior rounds of litigation with
the petitioner, yet notice by a fixation was
served
at
the
earlier
address.
The
assessment orders were passed without
proper service of notice upon the assessee
and were set-aside. (Para 20, 21, 23, 27 & 29)
Writ
petition
challenges
orders
dated
31.03.2017, for the assessment years 2012-13
and 2013-14.

Writ Petition allowed (E-4)

Precedent followed: -

1. Writ Tax No. 80 of 2016, Writ Tax No. 168
of 2016 (Para 20)
2. Writ Tax No. 546 of 2016 (Para 21)
1090 INDIAN LAW REPORTS ALLAHABAD SERIES
3. Shri Balaji Enterprises Vs. C.C.T. U.P.
Lucknow, Sales/Trade Tax Revision No. 496 of
2015, decided on 23.11.2015 (Para 24)
(Delivered by Hon'ble Piyush Agrawal, J.)

1. By means of present writ petition
the petitioner has prayed for quashing of
the orders dated 31st March, 2017 for the
assessment year 2012-13 and 2013-2014
both under U.P. Vat Act as well as under
Central VAT Act.

2. Heard Mr. Ravi Kant, Senior
Advocate assisted by Mr. Nishant Mishra
and Mr. C.B. Tripathi, special counsel for
the State of U.P.

3. The petitioner is a company
incorporated under the provision of Indian
Companies Act, 1956. Petitioner an
online Agency engaged in marketing and
selling of consumer goods is registered
under U.P. Value Added Tax, Act 2008
(hereinafter referred to as 'Act 2008') and
Central Sales Tax Act, 1956 (hereinafter
referred to as 'CST Act'). The business of
petitioner is that it buys goods from
various dealers across the country and
sells the same to other dealers in the State
of U.P. as alleged throughout India. Apart
from business and trading of goods
petitioner is also engaged in providing
warehousing and various other services to
sellers registered on the portal www.
flipkart. com wherein, petitioner manages
inventory, packaging and invoicing for
said sellers.

4. Under the registration documents
of petitioner under Act 2008 and CST Act
his address was mentioned as Cabin No. 2
First Floor, G-50 Sector-3, Noida,.

5. The petitioner have changed its
address from the present address to D510-513, Buffer Godown Compound,
Devi Mandir Road, Dasna, Ghaziabad.

6.

Thereafter,
the
petitioner
intimated
the
respondent
for
change/amendment of the address in the
registration certificate instead of the
amending and passing order on the said
application
and
ex-parti
provincial
assessment orders were passed for the
assessment year 2012-13 (4) U.P. under
Act 2008 and CST Act.

7. On the basis of an ex-parte
assessment order certain amounts were
also withdrawn from the Bank amount of
the petitioner.

8. The petitioner had preferred a writ
petition No. 80 and 168 of 2016 and the
same was allowed and the ex-parte
assessment orders were quashed with
heavy cost of two lac.

9. Thereafter, on 31st March, 2017
again an ex-parte assessment orders were
passed for assessment year 2012-13 and
2013- 14 both under Act 2008 and CST Act
and the said assessment order have been
passed ex-parte without any service of
notice upon the petitioner or opportunity of
being heard provided therein.

10. Learned senior counsel of the
petitioner submits that this is a 3rd round of
litigation forcing the petitioner to approach
this Hon'ble Court as the respondents are
bent upon to serve the notice not on the new
address intimated to them but on the
old/earlier address that too notice by
affixation in gross violation of the provision
of Rule 72 of the U.P. VAT Rules.

11. It is submitted that the impugned
orders
have
been
passed
by
the
2 All. M/S Flipkart India Pvt. Ltd. Vs State of U.P. & Ors.
1091
respondents
are
wholly
without
jurisdiction
and
gross
violation
of
principle of natural justice.

12. It is further argued that the
assessment orders for the assessment year
2012-13 both under Act 2008 and CST
Act are being passed after the expiry of
period of limitation prescribed under
Section 29 (6) of the Act and therefore the
orders are liable to be set aside.

13. Learned counsel further submits
that the normal limitation starts from 31st
March, 2013 which ends on 31st March,
2016 but as per limitation prescribed under
Section 29(6) of the Act ends on 30th
September, 2016. Since, the impugned
orders have been passed on 31st March,
2017 and the assessment orders were
received on 12.10.2017, therefore, the
assessment orders are vitiated and are liable
to be set aside as barred by limitation.

14. Learned counsel for the
respondent could not justify the action of
the respondent passing the orders for the
assessment year 2012-13 both under Act
2008 and CST Act in question after the
expiry of period of limitation as provided
under Section 29(6) of the Act.

15. In view of above mentioned
facts that the limitation as prescribed
under Section 29(6) of Act 2008 for the
assessment year 2012-13 has expired. On
13th September, 2016 and the impugned
orders both under Act 2008 and CST Act
for assessment year 2012-13 have been
passed on 31st March, 2017 which are
apparently much beyond the period of
limitation prescribed therein. Therefore,
the impugned orders for the assessment
year 2012-13 both under Act 2008 and
CST Act are hereby quashed.

16. The learned Senior Counsel now
raised an objection for the order passed
for the assessment year 2013-14 both
under the Act 2008 and CST Act.

17. It is submitted that in spite of the
fact that the petitioner's address have been
changed and the respondent were duly
intimated about the said change of
address, the respondents neither serve the
copy of notice upon the petitioner on its
new address nor any intimation was given
before passing of the impugned order
dated 31st March, 2017 for the disputed
assessment year.

18. It is further argued that even
though the complete procedure have been
prescribed under Rule 72 of U.P. VAT
Rules about the service of notice before
taking any action against the petitioner
but the same has not been complied with
and in gross violation of the said Rule the
notice of assessment in question have
been served by affixation which is not
permissible under the Act 2008 and
Rules.

19. Learned counsel for the
respondents have supported the impugned
order and tried to justify the action of the
respondent in passing the assessment
order.

20. We have perused the record of
the case before proceeding further it may
be pointed out that in earlier two round of
litigation the similar question arose about
the service of notice on the earlier address
and not on the new address from where
the petitioner is doing its business and this
Hon'ble Court has deprecated the method
adopted by the respondent by not only
quashed the orders but also imposed
heavy cost upon the respondent. The
1092 INDIAN LAW REPORTS ALLAHABAD SERIES
Hon'ble Court in the case of petitioner
while allowing the Writ Nos. 80 and 168
of 2016 have observed as under:

"22. The respondents have tried
to
justify
the
assessment
orders
contending that proper service was made
by refusal as well as by affixation and
there was no illegality in the service of the
summons. It was also urged that the
petitioner has a remedy of filing an
appeal against the assessment orders and
that it was not necessary to invoke the
extraordinary jurisdiction of this Court
under Article 226 of the Constitution of
India.
23. Having heard the learned counsel for
the parties, we are of the opinion that the
rule of alternative remedy is not a bar for
entertaining the writ petition. No doubt it
is a rule of discretion but in the instant
case, we are of the opinion that there
would be a travesty of justice if we
relegate the petitioner to the alternative
remedy of an appeal. We are of the
opinion that justice is required to be done
at the earliest. We find that there is a total
abdication by the respondents in adhering
to the process of service of summons
under Rule 72 of the Rules. Rule 72 of the
Rules has been ignored and a procedure
which is not known to law has been
adopted. For facility, the Rule 72 of the
Rules is extracted hereunder:-

24. Rule 72(a) of the Rules
provides that the service of summons is
required to be made on a dealer or a
person concerned in person or his agent.
In the instant case, the report of process
server indicates that there was no Firm at
the Noida address. At the Ghaziabad
address, the process server met one
person, who refused to divulge his name
but clearly indicated as to which person
would receive the notice. The process
server, however, indicates service by
refusal. In our opinion, the report of the
process server is wholly illegal. There is
no finding that the person who refused to
accept the notice was a dealer or a person
concerned
in
person or
an agent
empowered to accept the notice. In the
absence of any report to this effect we are
of the opinion that there is no valid
service by refusal.

29. The recall application for
recall of the assessment order was
rejected by the assessing authority on the
ground that the application was filed
beyond the stipulated period of 30 days
since service of the assessment order by
affixation was made on 17.12.2015 at
Noida. The Assessing Authority had also
rejected the recall application on the
ground that the admitted tax of Rs. 3.3
crore was not deposited which is a
mandatory requirement as per Section 32
of the Act. On this issue, we are of the
opinion
that
Assessing
Authority
committed a manifest error in rejecting
the recall application. For facility, section
32 is extracted hereunder:-

35. Before parting, we must
observe
the
manner
in which
the
respondents have proceeded with the
assessment and recovered the amount
from the petitioner's Bank account in
haste is deplorable and in gross violation
of the provisions of the Act. We find that
for the assessment years 2011-12, 201314 and 2014-15 ex-parte assessment
orders were made without adequate
service of notices upon the petitioner.
These assessment proceedings were set
aside in appeal on the short ground that
the service of the summons were sent at
the address where the petitioner was no
longer carrying on its business. Inspite of
this knowledge, the respondents chose
deliberately to serve the notice for
2 All. M/S Flipkart India Pvt. Ltd. Vs State of U.P. & Ors.
1093
provisional assessment for the period
April to October, 2015 upon the petitioner
at the Noida address knowing fully well
that the petitioner was not carrying any
business from the Noida address. The
respondents knew very well that the
petitioner had shifted its place of business
from Noida to Ghaziabad as they made a
futile attempt to serve the notice at
Ghaziabad but later for the reasons best
known to them, chose deliberately to
serve the notice by affixation at the Noida
address. Such tactics adopted by the
assessing authority in getting the service
effected upon the petitioner was in gross
violation of Rule 72 of the Rules.

36. We also find that the entire
exercise of service was done within four
days without taking recourse to the other
mode of service, namely simultaneously
service
by
registered
post
with
acknowledgement due. The assessment
order indicates that the first and last date
of hearing of the assessment proceedings
was 10.12.2015 and that the assessment
order was passed on 15.12.2015. The
counter
affidavit
reveals
that
the
assessment
order
was
served
by
attachment at the Noida address. This
was done deliberately by the respondents
so that the respondents could withdraw
the amount through garnishee notices by
exerting
pressure
upon
the
bank
authorities. The Court gets an uncanny
feeling that a deliberate attempt was
made by the respondents to withdraw the
money from the petitioner's bank account
through dubious mean by passing exparte assessment orders and not allowing
it to be served validly upon the petitioner.
If in this cavalier fashion the Commercial
Tax Department functions and withdraws
huge sums of money without valid service,
it would be difficult for big business
houses to carry on their business. Such
business houses would be forced to shift
their business outside the State of Uttar
Pradesh.

37.
Consequently,
the
petitioners are entitled for cost. The writ
petitions are allowed with cost amounting
to Rs. 2,00,000/- (Rupees two lakhs only),
which will be paid by the Commercial Tax
Department to the petitioner within two
weeks from the date of filing of a certified
copy of this order. If the amount is not
paid, it would be open to the petitioner to
move an appropriate application in this
petition."

21. Thereafter, again a writ Petition
No. 546 of 2016 was allowed with a cost
being imposed on respondent of Rs.
50,000/. The Hon'ble Court has observed
us under:

"16. We however required him
to tell us as to how respondent 1 could
dare to pass further assessment orders,
when earlier orders passed by him were
declared without jurisdiction by this
Court
by
referring
to
the
similar
application of petitioner for change of
business address. In reply thereto a very
bulky counter affidavit has been filed
separately by respondent 1. Despite he
could not explain as to what was the
occasion for any confusion when the
needs were very clearly disclosed and
decided
in
Courts'
judgment
dated
29.02.2016 and why respondent 1 was in
so such a hurry so as to pass the
impugned
assessment
orders
on
04.05.2016.

18.
In
these
facts
and
circumstances we are satisfied that here is
a forced litigation by unmindful illegal act
on the part of respondent 1 and realizing
the same he has also withdrawn the
impugned orders and also considered the
1094 INDIAN LAW REPORTS ALLAHABAD SERIES
fact he is an authority which was already
adversely commenced by this Court in its
order dated 29.02.2016 still he did not
care to such observations. It is again a fit
case where respondent 1 himself would be
saddled with cost by this litigation. Since
the impugned order of assessment have
already been recalled by order dated
23.07.2016 in this regard no further order
is required but we hold that respondent 1
being guilty of compelling and forcing
second round of litigation upon petitioner
must be saddled with cost which we
quantify to Rs. 50,000/-.

19. We also direct Principal
Secretary, Trade Tax, U.P. Government
to look into the manner in which
respondent 1 has functioned in this case
and despite strictures and penal cost
imposed by this Court in earlier judgment
dated 29.02.2016 and also directing
Commissioner Trade Tax to get an
inquiry conducted against erring officials,
respondent 1 has not cared to mend his
ways to conduct but has proceeded to
harass a dealer like petitioner and
appropriate disciplinary action be taken
at the earliest and finalise the same. It
may also be considered by Principal
Secretary, Trade Tax, U.P. Government
as to whether, respondent 1 is a person fit
to be assigned such important quasijudicial functions."

22. Admittedly, the two judgments
shows the working of the departmental
authorities and the manner in which they
are working is not in the interest of either
parties.

23. The case in hand also service of
notice has been made by affixation on the
earlier address of the petitioner in spite of
the fact being within their knowledge that
the petitioner have changed the place of
business to the new address but still with
a mind set of passing the order hurriedly
passed an ex-parte order under Act 2008
and CST Act creating huge demand
against the petitioner.

24. This Hon'ble Court in the case of
Sri. Balaji Enterprises vs. Commissioner
Commertial
Tax
U.P.
Lucknow
Sales/Trade Tax Revision No. 496 of
2015 decided on 23rd November, 2015 to
interpret as to how under Rule 72 the
notice is to be served and held as under:

"The record reveals that a
notice through process server was sent to
the assessee revisionist but the same was
not accepted and the service was deemed
to be sufficient by refusal. However, there
is nothing on record to show that any
notice of the proceedings was sent to the
assessee revisionist by registered post.

Rule 72 of the Rules framed
under the Act provides for the mode of
service of notice of the proceedings under
the Act.

In addition to the service of
notice of the proceedings through process
server Sub-Rule (h) of Rule 72 provides
that the authorities shall simultaneously
issue notice, order or summon for service
by post.

The aforesaid Sub-Rule (h) of
Rule 72 of the Rules clearly envisages
that in addition to the personal service
through process server, sending of notice
by registered post is mandatory.

This mandatory provision has
not been followed in the present case as is
evident from the record produced.

In view of the aforesaid facts
and circumstances, the contention of
assessee revisionist that he was not served
with any notice of the proceedings has
force. Accordingly, as the service of
2 All. Smt. Maya Niranjan Vs Phuleshwar & Anr.
1095
notice by post is mandatory and in
addition to service by process server, the
above question is answered in favour of
the assessee revisionist and against the
revenue holding that the authority was not
competent to cancel the registration of the
assessee/revisionist without issuing notice
to him by registered post simply on the
basis of service of process server by
refusal."

25. The Division Bench judgement
in the case of petitioner itself and Sri
Balaji
Enterprises
(supra)
a
clear
procedure for service on notice has been
prescribed which has not been followed
by the respondent in the case in hand.

26. The record further reveals that the
notice by affixation has been made on the
earlier address of the petitioner even without
satisfying the conditions as mentioned in the
Rule. Even after service of notice by
affixation, no such report has been brought
on record as provided under the Rules.

27. In spite of the fact being within
the knowledge of the respondent that the
petitioner has changed the place of
business to the new address still notice by
affixation has been made in the earlier
address. This fact is also came to the
notice of this Court in earlier two rounds
of litigation filed by the petitioner in Writ
Nos. 80 and 168 of 2016 and Writ No.
546 of 2016 which has been allowed with
the cost of Rs. 2 lac and Rs. 50,000/-.

28. The record further reveals that
the impugned order has been passed in
gross violation of the provision of the Act
and without proper service of notice upon
the petitioner. The said fact could not also
be disputed by the learned counsel for the
respondent.

29. In view of the facts and
circumstances of the case as stated above,
the impugned order dated 31.3.2017 for
the assessment year 2013-14 under the
U.P. Act 2008 and CST Act are hereby set
aside.

30. It is made clear that respondents
are permitted to initiate the proceeding by
issuing notice at the current address of the
petitioner, if any, in accordance with law.

31. The writ petition is accordingly
allowed.
----------

(2019)10ILR A 1095

APPELLATE JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 02.09.2015

BEFORE

THE HON'BLE AMRESHWAR PRATAP
SAHI, J.
THE HON'BLE PRAMOD KUMAR
SRIVASTAVA, J.

Contempt No. 37 of 2006

Smt. Maya Niranjan ...Appellant
Versus
Phuleashwar & Anr. ...Respondents

Counsel for the Appellant:
Sri B.P. Singh, Sri Ram Babu Yadav, Sri
Shashi Nandan

Counsel for the Respondents:
Sri R.B. Tripathi, A.G.A., Sri Krishan Ji
Khare

A. Contempt of Courts Act, 1971- Section
19 - Delay in payments by appellant -
wilfully and deliberately disobeying the
orders of the High Court - the subsequent
payments clearly establish that the said