Case Title | M/S K.J. ENTERPRISES vs STATE OF U.P. AND OTHERS |
Court | Allahabad High Court |
Honorable Judges | Justice Shekhar B. Saraf |
Citation | 2024 (02) GSTPanacea 8 HC Allahabad WRIT TAX No. – 1544 of 2022 |
Judgment Date | 01-February-2024 |
Sec. 75(4) mandates the grant of an opportunity of hearing when a written request is received from the person liable for tax or penalty, or when an adverse decision is contemplated against them. A case arose where the Proper Officer issued an Adjudication Order without providing a personal hearing. The assessee appealed, arguing that the appeal rejection without delving into the merits was unjust since no personal hearing was granted. The Department, however, interpreted “OR” in Sec. 75(4) as “AND,” asserting that both conditions must be met.
The court’s perspective, as articulated in Para-6, emphasizes that the use of the word ‘or’ in a statute serves as a disjunctive conjunction, indicating multiple alternatives. Each option should be considered independently, and interpreting it as a conjunctive conjunction would alter its meaning, potentially leading to unreasonable outcomes. In Para-7, the court reinforces the plain meaning rule, highlighting that the disjunctive nature of “or” is consistently upheld in statutory interpretation. This approach ensures fairness, equity, and access to justice by accommodating diverse individual needs and situations through alternative paths or options.
The court’s analysis underscores the importance of interpreting statutes based on their plain and ordinary meaning, aligning with the average person’s understanding. In the context of Sec. 75(4), the flexibility provided by “or” is crucial for upholding principles of fairness, equity, and access to justice, especially in areas of law dealing with rights, benefits, and entitlements. The court rejects the Department’s attempt to read “or” as “AND,” emphasizing the need to adhere to the plain and ordinary meaning to prevent unintended and unjust consequences.
2. This is a writ petition under Article 226 of the Constitution of India wherein the petitioner M/S K.J. Enterprises is aggrieved by the order dated September 26, 2022, passed by the Additional Commissioner, Grade – 2, (Appeals – 1st), Commercial Tax, Agra (hereinafter referred to as the ‘Respondent No. 2’). 3. Factual matrix of the instant case is provided below:
a. Petitioner is a proprietorship firm carrying the business of job work of scrap, selling, and purchasing of iron machinery parts and hardware.
b. The petitioner, during the month of March 2018, purchased inputs from different registered firms, in which ITC claim was made as per the Uttar Pradesh Goods and Services Tax Act, 2017 (hereinafter referred to as the ‘UPGST Act, 2017’).
c. The petitioner also made transactions in the year 2019-20 and in this regard, bills were issued, in which details of the goods were mentioned.
d. On July 24, 2019, an inspection was carried out at the premises of the petitioner and at the time of inspection, the authorities asked the petitioner to deposit the amount in DRC – 03.
e. Thereafter, a summon was issued to the petitioner under Section 70 of the UPGST Act, 2017 directing the petitioner to appear before the concerned authority on August 13, 2019, at 11:00 am along with stock register and other relevant documents for verification.
f. A show cause notice was also issued by the respondents on July 22, 2020, under Section 74 of the UPGST Act, 2017 for tax period 2019-20, alleging that the petitioner wrongly availed
input tax credit amounting to INR 22,00,00,000/- against bogus tax invoices and utilized the same by fraud or misstatement, suppression of facts, etc.
g. Another notice was issued on September 17, 2020, directing the petitioner to furnish a reply on October 6, 2020. Petitioner thereafter furnished reply on October 1, 2020.
h. Deputy Commissioner, State Tax, Sector – 4 (hereinafter referred to as the ‘Respondent No. 3’) rejected the reply of the petitioner vide order dated August 10, 2021, passed under Section 74 of the UPGST Act, 2017 for the A.Y. 2019-20 and imposed tax and penalty, along with interest, upon the petitioner amounting to INR 6,78,12,667.92/-.
i. The petitioner preferred an appeal before the Respondent No. 2 against the aforesaid order passed by the Respondent No.
3. By an order dated September 26, 2022, the Respondent No. 2 upheld the order of Respondent No. 3, and imposed tax and penalty on the petitioner.
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