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M/S. New Varanasi Transport Corpn. And Others v. The Asstt. Commissioner, Of Trade Tax, And Others - WRIT TAX No. 855 of 2003 [2007] RD-AH 3291 (27 February 2007)


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Court No.36

Civil Misc. Writ Petition No.855 of 2003

M/s New Varanasi Transport Corporation

and others v. The Assistant Commissioner

of Trade Tax, Sector I, Firozabad and others

Hon'ble R.K.Agrawal, J.

Hon'ble Bharati Sapru, J.

(Delivered by R.K.Agrawal, J.)

By means of the present writ petition filed under Article 226 of the Constitution of India, the petitioners seek quashing of the order dated 30.6.2003 and the amended recovery certificates which are being pressed against the petitioners.

Briefly stated, the facts giving rise to the present petition are as follow:-

The Assistant Commissioner of Trade Tax, Sector I, Firozabad, passed an assessment order on 3.10.2002 in which the firm M/s New Varanasi Transport Corporation was assessed as the sole proprietorship concern of one Sri Sanjay Dixit son of Sri Ram Pal Dixit, resident of Mahavir Nagar, Firozabad. The recovery proceedings were also initiated against Sri Sanjay Dixit. Subsequently, on certain information received by the said Officer, notice was issued to the petitioners on 21.6.2003 calling upon the petitioners to appear before the Assistant Commissioner of Trade Tax, Sector I, Firozabad, respondent no.1, on 30.6.2003 in respect of certain enquiries. According to the petitioners, the said notice was not served and, therefore, none of the petitioners appeared before the respondent no.1. The respondent no.1 proceeded ex parte and vide order dated 30.6.2003 had rectified the assessment order dated 3.6.2002 and in place of Sri Sanjay Dixit, the names of the petitioners have been incorporated as partners of the said firm. Consequently, recovery has also been issued against the petitioners.

We have heard Sri S.D.Singh, learned counsel appearing for the petitioners, and Sri M.R.Jaiswal, learned Standing Counsel appearing for the respondents.

The learned counsel for the petitioner submitted that the respondent no.1 had not issued any show cause notice to the petitioners under Section 22 of the U.P. Trade Tax Act calling upon to show cause as to why the assessment order be not rectified. In the absence of any such show cause notice and any opportunity of hearing having been given to the petitioners against the proposed rectification, the order dated 30.6.2003 is liable to be set aside. He further submitted that in the proceeding under Section 22 of the Act the proprietorship concern cannot be substituted by the partnership firm and it is beyond the scope of the said provision and there must be error apparent on the face of the record.

Sri M.R.Jaiswal, learned Standing Counsel, submitted that as the petitioners have been found to be the partners of the said firm, the respondent no.1 had rightly rectified the assessment order. The petitioners were given notice on 21.6.2003 and as they had not appeared, the respondent no.1 had rightly proceeded to pass the order ex parte.

We have given our anxious consideration to the various pleas raised by the learned counsel for the parties.

We find that it is not in dispute that the only notice which has been issued by the respondent no.1 is dated 21.6.2003, a copy of which has been filed as Annexure 15 to the writ petition. From a reading of the aforesaid notice, we find that there is no mention that the Assistant Commissioner of Trade Tax, Sector I, Firozabad has put the petitioners on notice that he proposed to rectify the assessment order dated 3.10.2002 by incorporating the petitioners' names as partners in place of the said firm being the sole proprietorship concern of Sri Sanjay Dixit. In paragraph 40 of the writ petition, it has been specifically averred by the petitioners that the notice dated 21.6.2003 is not a notice under Section 22 of the Act and it does not disclose or require the petitioners to answer or show cause on the point of rectification.

In the counter affidavit filed by Sri Dharmendra Singh Sachan, Trade Tax Officer, Grade -2, Sector - 1, Firozabad, on behalf of the respondent no.1, the averments made in paragraph 40 of the writ petition has not been specifically denied. It has been dealt with in paragraph 32 of the counter affidavit. A general reply has been given that the contents of the said paragraph are incorrect, misconceived and hence denied and referred to the reply given in paragraph 3 and its sub-paragraphs have been reiterated and re-affirmed. In paragraph 3 and its sub-paragraphs, there is no discussion regarding issuance of the show cause notice under Section 22 of the Act and putting the petitioners to notice for the proposed rectification of the order. Thus, from the record it is established that the petitioners have not been issued any notice under Section 22 of the Act nor they have been put to notice regarding proposed rectification of the assessment order. The Apex Court, in the case of Canara Bank and others v. Debasis Das and others, (2003) 4 SCC 557, has held that adherence to principles of natural justice as recognized by all civilized States is of supreme importance when a quasi-judicial body embarks on determining disputes between the parties, or any administrative action involving civil consequences is in issue. These principles are well settled. The first and foremost principle is what is commonly known as audi alteram partem rule. It says that no one should be condemned unheard. Notice is the first limb of this principle. It must be precise and unambiguous. It should apprise the party determinatively of the case he has to meet. Time given for the purpose should be adequate so as to enable him to make his representation. In the absence of a notice of the kind and such reasonable opportunity, the order passed becomes wholly vitiated. Thus, it is but essential that a party should be put on notice of the case before any adverse natural justice. It is after all an approved rule of fair play.

As the petitioners have neither been given any show cause notice regarding the proposed rectification nor any opportunity of hearing, the order dated 30.6.2003, filed as Annexure 1 to the writ petition, cannot be sustained and is hereby set aside. The consequent amendment of the recovery certificate being pressed against the petitioners pursuant to the assessment order dated 3.10.2003 cannot be sustained and is also hereby set aside. As the petitioners have succeeded on the short point of violation of the principles of natural justice, we are not going into the question as to whether under Section 22 of the Act rectification, if at all, as has been done in the present case, can be resorted to or not. It will be open to the petitioners to take such objections before the respondent no.1 in case the respondent no.1 decides to proceed afresh in accordance with law.

The writ petition succeeds and is allowed with costs.




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