Case Title | Shree Sai Palace vs State Of U.P. And 2 Others |
Court | Allahabad High Court |
Honorable Judges | Justice Shekhar B. Saraf |
Citation | 2024 (02) GSTPanacea 42 HC Allahabad WRIT TAX No. – 50 of 2023 |
Judgement Date | 21-February-2024 |
In the matter at hand, the proceedings commenced with the presentation of arguments by the legal representatives of both parties involved. This case pertains to a writ petition filed under Article 226 of the Constitution of India, where the petitioner challenges the order issued on December 16, 2022, by the Additional Commissioner, Grade – 2, (Appeals – 2nd), Commercial Tax, Jhansi, hereinafter referred to as ‘Respondent No. 3’.
The factual background of the case unfolds with the petitioner, who owns a hotel providing banquet and garden services for marriage bookings, being duly registered with the GST department under the Goods and Services Tax Act, 2017, specifically the UPGST Act. The dispute arose when a notice was issued on March 25, 2021, for the period of December 2017, under section 74 of the UPGST Act. The petitioner failed to respond to the notice, leading to an order being passed under section 74(9) of the UPGST Act by respondent No. 2 on July 7, 2021, followed by the issuance of DRC 07 on July 13, 2021.
It is argued by the petitioner that the order passed on July 7, 2021, is in violation of the principles of natural justice as no date, time, and venue for personal hearing were provided. Consequently, the petitioner filed an appeal before respondent No. 3, and also deposited 10% of the disputed tax as a pre-deposit. The impugned order dated December 16, 2022, partly allowed the appeal filed by the petitioner, wherein respondent No. 3 deleted the supply estimated based on catering services during marriages, amounting to 41,85,000/-. However, respondent No. 3 confirmed the levy made by respondent No. 2 based on documents seized during the survey.
The crux of the matter revolves around the violation of the petitioner’s right to a personal hearing, as mandated under Section 75(4) of the UPGST Act. The section stipulates that an opportunity for a hearing must be granted upon a written request from the person liable for tax or penalty, or where any adverse decision is contemplated against such person. It is argued that even in the absence of a written request, if an adverse decision is contemplated, a personal hearing must be provided.
The interpretation of the word ‘or’ in the statute is crucial, as it denotes a disjunctive conjunction, presenting two or more alternatives. Thus, each option outlined in the statute must be adhered to diligently.
In essence, the petitioner contends that the absence of a personal hearing prior to the issuance of the order violates the principles of natural justice and renders the order invalid. This forms the core argument of the petitioner’s case, emphasizing the importance of procedural fairness and adherence to statutory requirements in administrative proceedings.
The interpretation of the word “or” in legal statutes is crucial, as it fundamentally distinguishes it from the conjunctive conjunction “and”. While “and” necessitates the fulfillment of multiple conditions simultaneously, “or” allows for flexibility and choice by permitting compliance with any one of the alternatives presented. Misinterpreting “or” as “and” would alter the intended meaning of a statute, imposing stricter criteria than intended and potentially leading to unreasonable outcomes.
Courts consistently uphold the disjunctive nature of “or” in statutory interpretation, following the principle of giving effect to the plain and ordinary meaning of language in statutes. This principle, known as the plain meaning rule or literal rule, underscores the importance of interpreting statutes based on their plain and ordinary meaning as understood by the average person. Additionally, the disjunctive function of “or” is essential for fairness, equity, and access to justice in law. By providing alternative paths or options, statutes accommodate diverse individual needs and situations, promoting inclusivity and mitigating potential disparities or injustices, particularly in areas concerning rights, benefits, and entitlements.
In legal precedent, such as the case of Commissioner of Sales Tax, Uttar Pradesh vs. The Modi Sugar Mills Ltd., the Supreme Court emphasized that taxing statutes must be interpreted strictly based on the words used, without consideration of equitable concerns or assumptions. This underscores the importance of adhering to the literal language of statutes, without implying or importing provisions not expressly stated.
In the context of Section 75(4) of the UPGST Act, 2017, the word “or” holds significant importance. It indicates legislative intent regarding the necessity of providing an opportunity for personal hearing in tax matters. The inclusion of “or” delineates two distinct scenarios where personal hearing must be afforded: upon application by the individual subject to penalty or tax imposition, or in the event of contemplation of an adverse order. Personal hearing ensures procedural fairness and natural justice, allowing individuals to present their case, respond to allegations, and address concerns directly to decision-makers. This safeguards against arbitrary decisions and reflects an acknowledgment of the complex nature of tax and penalty determinations. Personal hearings enable well-informed and equitable decisions based on comprehensive understanding and exploration of circumstances.
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