L. Hirday Narain v. Income Tax Officer Reported In 1970 (2) Scc

W.P. No.1877/2011, W.P. No.1878/2011 & W.P. No.1879/2011 21.04.2016 Shri A. K. Chitale, learned Senior Counsel with Shri Vijay Tulsiyan, learned counsel for the petitioner. Shri P. Bhargava, learned Dy. A. G. for the respondents – State. Heard. Though these matters has been listed for vacating stay on I.A. No.1831/2016, I.A. No.1830/2016 and I.A. No.1832/2016 but with the consent of learned counsel for the parties, we have heard the matter finally at motion hearing stage. 2.By these writ petitions under Article 226 of the Constitution of India, the petitioner is challenging the assessment order passed by the Mining Officer and Assessing Officer, Rural Infrastructure and Roads Development Tax and demand notices issued under M. P. Gramin Avsanrachana Tatha Sadak Vikas Adhiniyam, 2005 (in short "the Adhiniyam, 2005") for payment of rural infrastructure and roads development tax on the ground that the same is in violation of principles of natural justice as no hearing was accorded nor any reasoned order has been passed by the authority and prayed for their quashment. 3.Learned Senior Counsel has placed reliance on the following decisions :- 1. L. Hirday Narain vs. Income Tax Officer reported in 1970 (2) SCC 3551970 (2) SCC 355 2. State of Kerala vs. K. T. Shaduli Grocery Dealer reported in 1977 (2) SCC 777reported in 1977 (2) SCC 777 3. R. B. Shreeram Durga Prasad vs. Settlement Commission reported in 1989 (1) SCC 628Commission reported in 1989 (1) SCC 628 4. Sangfroid Remedies Limited vs. Union of India reported in 1999 (1) SCC 259in 1999 (1) SCC 259 5. Surya Dev Rai vs. Ram Chandar Rai reported in 2003 (6) SCC 675(6) SCC 675 6. Mardia Chemicals Limited vs. Union of India reported in 2004 (4) SCC 311in 2004 (4) SCC 311 7. Benara Valves Limited vs. Commissioner of Central Excise reported in 2006 (13) SCC 347Excise reported in 2006 (13) SCC 347 8. Ravi Gupta vs. Commissioner of Sales Tax, Delhi reported in 2009 (5) SCC 208reported in 2009 (5) SCC 208 9. Satwati Deswal vs. State of Haryana reported in 2010 (1) SCC 126(1) SCC 126 10.CCT vs. Shukla and Brothers reported in 2010 (4) SCC 785785 11.A. V. Venkateswaran vs. Ramchand Sobhraj reported in AIR 1961 SC 1506AIR 1961 SC 1506 12.Baburam Prakash vs. Antarim Zila reported in AIR 1969 SC 5561969 SC 556 13.Rubber Products vs. Union of India reported in 1995 Vol.75 ELT 280Vol.75 ELT 280 14.Royal Insulation (P) Limited vs. Commercial Tax Officer reported in Madras High Court (DB) 2005 Lawsuit (Mad)866Officer reported in Madras High Court (DB) 2005 Lawsuit (Mad)866 15.M. P. Gramin Avsanrachana Tatha Sadak Vikas Adhiniyam, 2005 (No.7 of 2005) reported in MPLT Vol.47 (2005, Part-IV, Page-17Adhiniyam, 2005 (No.7 of 2005) reported in MPLT Vol.47 (2005, Part-IV, Page-17 16.M. P. Gramin Avsanrachana Tatha Sadak Vikas Niyam, 2005 (No.7 of 2005) reported in MPLT Vol.47 (2005, Part-II, Page-1942005 (No.7 of 2005) reported in MPLT Vol.47 (2005, Part-II, Page-194 17.State of Tripura vs. Manoranjan reported in 2001 (4) SCC 740SCC 740 4.On the other hand, learned counsel for the respondents – State has drawn our attention to the order passed by the Apex Court on 06.12.2010 in Civil Appeal No.4745/2006 (Jai Prakash Associates Ltd. vs. State of M. P. & others) wherein the Apex Court directed the Assessing Officer to complete the assessment by passing a reasoned order in accordance with law. If any adverse order is passed, then the assessee(s) should prefer an appeal in accordance with law. In respect of pending appeal(s), the Appellate Authority was directed to decide the matter in accordance with law. In pending appeal(s), it was directed that every assessee will pay the taxes without prejudice to its rights and contentions in the pending appeal(s). The order dated 06.12.2010 reads as under :- Heard learned counsel on both sides. Court on 06.12.2010 in Civil Appeal No.4745/2006 (Jai Prakash Associates Ltd. vs. State of M. P. & others) wherein the Apex Court directed the Assessing Officer to complete the assessment by passing a reasoned order in accordance with law. If any adverse order is passed, then the assessee(s) should prefer an appeal in accordance with law. In respect of pending appeal(s), the Appellate Authority was directed to decide the matter in accordance with law. In pending appeal(s), it was directed that every assessee will pay the taxes without prejudice to its rights and contentions in the pending appeal(s). The order dated 06.12.2010 reads as under :- Heard learned counsel on both sides. We direct each of the assessees, appearing before us, to file Returns under the relevant Statute. If they have filed the Returns, the Assessing Officer will complete the assessment by a reasoned order in accordance with law. If that order is against the assessee(s), the assessee(s) should prefer an appeal in accordance with law. If any matter is pending before the Appellate Authority in appeal, the Appellate Authority will decide the matter in accordance with law. It is made clear that, pending appeal(s), every assessee will pay the taxes without prejudice to its rights and contentions in the pending appeal(s). The interlocutory applications are, accordingly, disposed of. Place Civil Appeal No.4056-4064 of 1999 and connected matters on 13[th] January, 2011, subject to over-night part-heard, if any. strictly made as per Rule 9 (1) and (2) of the M. P. Gramin Avsanrachana Tatha Sadak Vikas Niyam, 2005 (in short "the Niyam, 2005"). It is also submitted that as per sub-rule 1 and 2 of Rule 9 of the Niyam, 2005, the assessing authority shall assess the amount of tax due from the holder of mineral bearing land on the basis of return filed by the State. No reasoned order is required nor any opportunity of hearing is required. In case the writ petitioner is aggrieved by the order passed by the Assessing Officer, he may challenge the same by filing an appeal and under Rule 11 of the Niyam, 2005 and the Appellate Authority shall entertain the appeal only after deposit of half of the tax assessed and demanded by the assessee. 6.He further submitted that in the present case, on 10.03.2011, an ad-interim order has been passed and, therefore, no recovery has been made. The said order is contrary to the dictum of the Apex Court order dated 06.12.2010 and prayed for vacating stay and dismissal of the writ petitions on the ground that alternative remedy of statutory appeal is provided under the Adhiniyam, 2005. 7.On merit, he has submitted that as per Rule 4 of the Niyam, 2005, method has been provided for calculation of annual value of mineral bearing land. The liability to pay tax by the assessee has been accrued from the date of publication of M. P. Gramin Avsanrachana Tatha Sadak Vikas Adhiniyam and Niyam, 2005. In the present case, the dispute is in respect of Assessment Period commencing from 01.04.2005 to 30.06.2010. The total amount 7.On merit, he has submitted that as per Rule 4 of the Niyam, 2005, method has been provided for calculation of annual value of mineral bearing land. The liability to pay tax by the assessee has been accrued from the date of publication of M. P. Gramin Avsanrachana Tatha Sadak Vikas Adhiniyam and Niyam, 2005. In the present case, the dispute is in respect of Assessment Period commencing from 01.04.2005 to 30.06.2010. The total amount of tax in all the three writ petitions comes to around Rs.8,00,00,000/- (Rupees Eight Crores only). It is also alleged that the petitioner has failed to comply with Rule 45 of the Mineral Conservation & Development Rules, 1988, wherein there are monthly, quarterly and yearly returns in Form-8 mentioning pit-mouth and value therein but petitioner's company has failed to do so by not mentioning the pit-mouth value in the prescribed form in the return submitted by them and the petitioner by way of doing so, cannot avail the benefit of his being wrong. As per record, return has been filed on 16.09.2011 by Shri Anoop Mishra, Dy. Director, Mineral Administration, Directorate of Geology & Mining, Bhopal, who is Officer-in-Charge of the case. He along with the return annexed the order dated 06.12.2010 passed by the Apex Court but no application for vacating stay has been filed by him, reasons unknown to this Court. Only on 05.04.2016, an application for vacating stay has been filed by the OIC of the case on the ground that the legality and validity of the Adhiniyam and Niyam, 2005 was challenged before the High Court and after dismissal of the said writ petitions, an SLP was filed before the Apex Court and on 06.12.2010, the Apex Court has clarified the position that the Assessing Officer will complete the assessment and shall pass a reasoned order in accordance with law and if any adverse order is passed against the petitioner, then he shall prefer an appeal before the Appellate Authority. 8.He contended that the petitioner has not filed any appeal and, therefore, the stay be vacated. It is also stated that the assessee has to pay the taxes without prejudice to its rights and contentions made in the appeal. He further submitted that if we read the order of the Apex Court as a whole, then it is clear and specific and no interim relief can be granted in favour of the assessee. It is not disputed by the learned counsel for the parties that in pending assessments, the Apex Court has directed the Assessing Officer to complete the assessment by passing a reasoned order in accordance with law. 9.In the present case, the orders dated 18.01.2011 and 08.02.2011 (Annexure-P/1 & P/2) were passed after the decision of the Apex Court dated 06.12.2010 and, therefore, the Assessing Officer is bound to pass a reasoned order. The order which does not contain reasons is no order in the eye of law and requires to be set aside. Thus, we, without adverting to the merits of the case, quash the impugned assessment order and direct the Assessing Officer to consider the return filed by the petitioner/assessee and pass a reasoned order, as directed by the Apex Court, within a period of four weeks from the date of filing of certified copy of the order. 10.For these reasons, we quash the impugned assessment order and direct the Assessing Officer in all the three writ petitions to consider the return afresh and pass an assessment order, within a period of four weeks from the date of filing of certified copy of the order and file compliance report to the Registrar of this Court. In case, if any adverse order is passed, gp then the petitioners shall prefer an appeal before the Appellate Authority under Rule 11 of the Niyam, 2005, as directed by the Apex Court on 06.12.2010. 11.With the aforesaid, all the writ petitions are allowed in part to the extent as indicated herein above. No order as to costs. (P. K. Jaiswal)(Vivek Rusia)Judge Judge