1

Reserved on 03.05.2024
Delivered on 31.05.2024

Neutral Citation No. - 2024:AHC-LKO:41587-DB

A.F.R.

Court No. - 3
Case :- WRIT TAX No. - 114 of 2024
Petitioner :- Eveready Industries India Ltd. Lko. Thru.
Signatory Sh. Sounik Mukherjee
Respondent :- State Of U.P. Thru. Secy. Ministry Finance ,
U.P. Lko. And Another
Counsel for Petitioner :- Atma Ram Verma
Counsel for Respondent :- C.S.C.

Hon'ble Mrs. Sangeeta Chandra,J.

Hon'ble Brij Raj Singh,J.

(Delivered by Hon'ble Mrs. Sangeeta Chandra,J.)

1. Heard Sri Rahul Agarwal alongwith Sri Utkarsh Malviya,

learned counsel for the petitioner and Sri Rajesh Tiwari,
learned Additional Chief Standing Counsel for the State-
respondents.

2. This petition has been filed with the following main

prayers:-
"Issue a Writ, Order or Direction in the nature of Certiorari
quashing the impugned Order passed u/s 74 of the Uttar Pradesh
Goods & Service Tax Act, 2017 bearing Reference
No.ZDO90224180025M dated 19.02.2024 issued in FORM GST
DRC-1 a/w the Rectification Order bearing Ref.
No.ZD0904244094478 dated 27.04.2024 issued in FORM GST
DRC-08, by the Respondent no.2 (Annexure no.1).

(2) Issue a Writ, Order or Direction in the nature of certiorari

quashing the impugned Show Cause Notice issued to the petitioner u/
s 74 of the UPGST Act vide Reference No. ZD090823132533D dated
07.08.2023 issued in FORM GST DRC-01 by Respondent no.2
(Annexure No.2)."
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3. It is the case of the petitioner that the company was

registered under Uttar Pradesh Goods and Services Tax
Act, 2017 (for short 'the Act'). An audit notice was issued
to the petitioner on 05.05.2022 vide FORM GST ADT-01 by
the Joint Commissioner (Tax Audit), Commercial Tax,
Lucknow, requiring the petitioner to produce books of
accounts and present its case regarding due discharge of
tax liabilities. A survey of the premises of the petitioner
was conducted by the Revenue Officials on 11.05.2022.
Another notice was issued in FORM GST ADT-01 to the
petitioner on 05.01.2023 on similar grounds. The
petitioner claims to have complied with all the directions
issued by the respondents, however, it was not given any
information regarding the action taken in furtherance of
audit notices dated 05.05.2022 and 05.01.2023 by the
respondent authorities. As per the provisions of Section
65(4) of the Act, if the respondents failed to complete the
audit exercise after the lapse of three months from the
date of audit, unless the said period has been explicitly
extended, it shall be deemed to have concluded upon
expiration of the said period. No draft audit report was
prepared or issued to the petitioner in FORM GST ADT-02.
A show cause notice was issued to the petitioner on
07.08.2023 relying upon the audit FORM GST ADT-01, that
were issued on 05.05.2022 and on 05.01.2023. No audit
report was ever issued to the petitioner.

4. The impugned show cause notice does not provide

any date, place and time of hearing despite the same
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being mandatory procedure. In the Columns specified for

date, place and time of hearing, the show cause notice
mentions NA (not applicable) thereby denying the
petitioner any opportunity of hearing. The petitioner
submitted its reply on 06.11.2023 and in the said reply,
the petitioner has specifically prayed that it may be given
personal hearing, if the officer is not satisfied with the
written explanation given in reply to the show cause
notice.

5. Learned counsel for the petitioner has argued that

despite the mandate of Section 75(4) of the Act providing
personal hearing and despite the petitioner specifically
asking for personal hearing, no opportunity of personal
hearing was granted and the impugned order was passed
in violation of the settled principles of natural justice.

6. Learned counsel for the petitioner to substantiate his

argument, has read out the provisions of Section 75(4) of
the Act and has placed reliance upon three judgements of
Co-ordinate Benches of this Court in Writ- Tax No.1029
of 2021: Bharat Mint & Allied Chemicals Vs.
Commissioner, Commercial Tax & others, (2022)
Vol.48 VLJ 325, decided on 04.03.2022; Writ Tax
No.551 of 2023: M/s Mohini Traders Vs. State of
U.P. and another, decided on 03.05.2023 and Writ Tax
No.44 of 2024: M/s Mahendra Educational Pvt. Ltd.
Vs. State of U.P., decided on 05.03.2024, copies of such
orders passed by Co-ordinate Benches have been
collectively filed as Annexure No.9 to the writ petition.
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7. Learned Counsel appearing on behalf of the State-

respondents has argued that against the impugned order
of assessment, the petitioner has a statutory remedy
under Section 107 of the Act and all the arguments on the
merits of the case, can be dealt with by the appellate
authority.

8. Learned counsel for the petitioner has argued that the

leading judgment of a Co-ordinate Division Bench in
Bharat Mint & Allied Chemicals (supra) has been relied
upon in the case of M/s Mohini Traders (supra) and M/
s Mahendra Educational Pvt. Ltd. (supra) by two Co-
ordinate Division Benches and he has read out the
judgment of the Division Bench in Bharat Mint & Allied
Chemicals (supra), wherein the Division Bench has
framed two questions to decide; the first related to
whether opportunity of personal hearing is mandatory
under Section 75(4) of the CGST/UPGST Act 2017; and
second question was whether under the facts and
circumstances of the case, the impugned adjudication
order has been passed in breach of principle of natural
justice and consequently, it deserved to be quashed in
exercise of powers conferred under Article 226 of the
Constitution of India.

9. The Co-ordinate Bench dealt with the notice issued to

the petitioner under Section 75(4) of the Act and observed
that under the column meant for the date, time and place
of personal hearing, the officer has noted NA (not
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applicable) and then has quoted the language of Section

75(4) of the Act. To decide the controversy, it is
appropriate to quote the judgement of Bharat Mint &
Allied Chemicals (supra) in extenso :-
"8. Section 75(4) of the Act, 2017 reads as under:-
"An opportunity of hearing shall be granted where a request is
received in writing from the person chargeable with tax or penalty,
or where any adverse decision is contemplated against such
person."
9. From perusal of Section 75(4) of the Act, 2017 it is evident that
opportunity of hearing has to be granted by authorities under the
Act, 2017 where either a request is received from the person
chargeable with tax or penalty for opportunity of hearing or where
any adverse decision is contemplated against such person. Thus,
where an adverse decision is contemplated against the person, such
a person even need not to request for opportunity of personal
hearing and it is mandatory for the authority concerned to afford
opportunity of personal hearing before passing an order adverse to
such person.
10. In the counter affidavit the respondents have taken the stand
that no opportunity of hearing is required before passing the
assessment order. In support of their contention the respondents
have relied upon the judgment of Hon'ble Supreme Court in Union
of India and Others Vs. M/s.Jesus Sales Corporation AIR 1996 SC
1509. Perusal of the judgment in the case of M/s. Jesus Sales
Corporation (supra) shows that the observation was made by
Hon'ble Supreme Court while interpreting 3rd proviso to Section 4
M(1) of the Imports and Exports (Control) Act 1947, which is
reproduced below:
"Provided also that, where the Appellate authority is of opinion
that the deposit to be made will cause undue hardship to the
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appellant, it may, at its discretion, dispense with such deposit either

unconditionally or subject to such conditions as it may impose."
11. The aforequoted 3rd proviso of Section 4 M (1) of the Act 1947
does not contemplate any opportunity of personal hearing in
contrast to the provisions of Section 75(4) of the CGST/UPGST
Act, 2017 which specifically mandates for opportunity of hearing
before passing the order. The counter affidavit has been filed by an
Officer of the rank of Joint Commissioner, Corporate Circle
Commercial Tax, Bareilly who has either not read the aforesaid
judgment of Hon'ble Supreme Court or was not able to understand
it and in a casual manner the counter affidavit has been filed in
complete disregard to the statutory mandate of Section 75(4) of the
Act 2017.
12. It has also been admitted in the counter affidavit that except
permitting the petitioner to reply to the show cause notice,
opportunity of personal hearing has not been afforded to the
petitioner. Thus the legislative mandate of Section 75(4) of the Act
to the authorities to afford opportunity of hearing to the assessee
i.e. to follow principles of natural justice, has been completely
violated by the respondents while passing the impugned order."

10. The Court thereafter observed that the stand taken

by the respondents that the petitioner has alternative
remedy of appeal under Section 107 of the Act cannot be
accepted. Insofar as it is settled law that availability of
alternative remedy, is not a complete bar to entertain a
writ petition under Article 226 of the Constitution of India
and has referred to exceptions that have been carved out
to alternative remedy by the Hon'ble Supreme Court with
regard to three cases i.e. (i) where there is complete lack
of jurisdiction in the officer or authority to take the action
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or to pass the order impugned; or (ii) where vires of an

Act, Rules, Notification or any of its provisions has been
challenged; or (iii) where an order prejudicial to the writ
petitioner has been passed in total violation of principles of
natural justice. There are other exceptions also, which
have been mentioned in sub-clauses (iv) to (xi) of the
Division Bench judgment, which are being quoted herein-
below:-

"(iv) Where enforcement of any fundamental right is sought by the

petitioner.
(v) Where procedure required for decision has not been adopted.
(vi) Where Tax is levied without authority of law.
(vii) Where decision is an abuse of process of law.
(viii) Where palpable injustice shall be caused to the petitioner, if
he is forced to adopt remedies under the statute for enforcement of
any fundamental rights guaranteed under the Constitution of India.
(ix) Where a decision or policy decision has already been taken by
the Government rendering the remedy of appeal to be an empty
formality or futile attempt.
(x) Where there is no factual dispute but merely a pure question of
law or interpretation is involved.
(xi) Where show cause notice has been issued with preconceived or
premeditated or closed mind."

11. The Division Bench in the case of M/s Mohini

Traders (supra) has placed reliance upon the judgement
rendered in the case of M/s Bharat Mint & Allied
Chemicals (supra) and observed in similar terms in
paragraphs 8 and 9 as follows:-
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"8. Even otherwise in the context of an assessment order creating

heavy civil liability, observing such minimal opportunity of hearing
is a must. Principle of natural justice would commend to this Court
to bind the authorities to always ensure to provide such opportunity
of hearing. It has to be ensured that such opportunity is granted in
real terms. Here, we note, the impugned order itself has been
passed on 25.11.2022, while reply to the show-cause-notice had
been entertained on 14.11.2022. The stand of the assessee may
remain unclear unless minimal opportunity of hearing is first
granted. Only thereafter, the explanation furnished may be rejected
and demand created.
9. Not only such opportunity would ensure observance of rules of
natural of justice but it would allow the authority to pass
appropriate and reasoned order as may serve the interest of justice
and allow a better appreciation to arise at the next/appeal stage, if
required."

12. A coordinate Bench sitting at Lucknow in M/s

Mahendra Educational Pvt. Ltd. (supra) has placed
reliance upon the Division Bench Judgement in the case of
M/s Bharat Mint & Allied Chemicals (supra) and has
quoted the observations made in the case of M/s Mohini
Traders (supra) and observed in paragraph 8 as follows:-

"8. Not only such opportunity would ensure observance of rules of

natural of justice but it would allow the authority to pass
appropriate and reasoned order as may serve the interest of justice
and allow a better appreciation to arise at the next/appeal stage, if
required."
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13. It has been argued on the basis of observations made

by the three Division Benches of this Court that the law is
settled insofar as Section 75(4) of the Act is concerned.
The officer should not only issue a show cause notice, but
also give personal hearing where a request has been
received in writing from the person chargeable with tax or
penalty or where any adverse decision is contemplated
against any such person.

14. Learned counsel for the State-respondents has

pointed out that Section 74 of the Act, which relates to
determination of tax not paid or short paid or erroneously
refunded or input tax credit wrongly availed or utilized by
reason of fraud or any willful- misstatement or
suppression of facts. Section 74 of the Act in its entirety is
quoted below:-

"Section 74. Determination of tax not paid or short paid or

erroneously refunded or input tax credit wrongly availed or utilised
by reason of fraud or any wilful-misstatement or suppression of
facts.
(1) Where it appears to the proper officer that any tax has not been
paid or short paid or erroneously refunded or where input tax
credit has been wrongly availed or utilised by reason of fraud, or
any wilful-misstatement or suppression of facts to evade tax, he
shall serve notice on the person chargeable with tax which has not
been so paid or which has been so short paid or to whom the
refund has erroneously been made, or who has wrongly availed or
utilised input tax credit, requiring him to show cause as to why he
should not pay the amount specified in the notice along with
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interest payable thereon under section 50 and a penalty equivalent

to the tax specified in the notice.
(2) The proper officer shall issue the notice under sub-section (1) at
least six months prior to the time limit specified in sub-section (10)
for issuance of order.
(3) Where a notice has been issued for any period under sub-
section (1), the proper officer may serve a statement, containing the
details of tax not paid or short paid or erroneously refunded or
input tax credit wrongly availed or utilised for such periods other
than those covered under sub-section (1), on the person chargeable
with tax.
(4) The service of statement under sub-section (3) shall be deemed
to be service of notice under sub-section (1) of section 73, subject
to the condition that the grounds relied upon in the said statement,
except the ground of fraud, or any wilful-misstatement or
suppression of facts to evade tax, for periods other than those
covered under sub-section (1) are the same as are mentioned in the
earlier notice.
(5) The person chargeable with tax may, before service of notice
under sub-section (1), pay the amount of tax along with interest
payable under section 50 and a penalty equivalent to fifteen per
cent. of such tax on the basis of his own ascertainment of such tax
or the tax as ascertained by the proper officer and inform the
proper officer in writing of such payment.
(6) The proper officer, on receipt of such information, shall not
serve any notice under sub-section (1), in respect of the tax so paid
or any penalty payable under the provisions of this Act or the rules
made thereunder.
(7) Where the proper officer is of the opinion that the amount paid
under sub-section (5) falls short of the amount actually payable, he
shall proceed to issue the notice as provided for in sub-section (1)
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in respect of such amount which falls short of the amount actually

payable.
(8) Where any person chargeable with tax under sub-section (1)
pays the said tax along with interest payable under section 50 and
a penalty equivalent to twenty-five per cent. of such tax within
thirty days of issue of the notice, all proceedings in respect of the
said notice shall be deemed to be concluded.
(9) The proper officer shall, after considering the representation,
if any, made by the person chargeable with tax, determine the
amount of tax, interest and penalty due from such person and
issue an order.
(10) The proper officer shall issue the order under sub-section (9)
within a period of five years from the due date for furnishing of
annual return for the financial year to which the tax not paid or
short paid or input tax credit wrongly availed or utilised relates to
or within five years from the date of erroneous refund.
(11) Where any person served with an order issued under sub-
section (9) pays the tax along with interest payable thereon under
section 50 and a penalty equivalent to fifty per cent. of such tax
within thirty days of communication of the order, all proceedings in
respect of the said notice shall be deemed to be concluded."

15. The action taken against the petitioner under Section

74(9) of the Act does not provide for personal hearing to
be given to the concerned person chargeable with tax or
penalty. It only states that the proper officer shall after
considering the representation, if any, made by the person
chargeable with tax determine the amount of tax, interest
and penalty due from such person and issue an order.
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16. Learned counsel for the petitioner, however, has

pointed out that Section 75 of the Act which, as has been
published in the text book, is under sub-heading of
"General Provisions Relating to Determination of Tax". It
has been argued that Section 75 of the Act will apply as a
general procedure to be adopted in all actions that are
proposed under Sections 73 and 74 of the Act and the
procedure prescribed under Section 75 of the Act will have
to be followed by the tax authorities even for
determination of tax under Section 74 of the Act.

17. Learned counsel appearing for State-respondents has

referred to Section 75 (2) of the Act and says that the
language of Section 75(2) of the Act is clear that where
any appellate authority or appellate Tribunal or Court
concludes that the notice issued under sub-section (1) of
Section 74 of the Act is not sustainable for the reason that
the charges of fraud or any willful-misstatement or
suppression of fact to evade tax has not been established
against the person to whom the notice was issued, the
proper officer shall determine the tax payable by such
person, deeming as if the notice were issued under sub-
section (1) of Section 73 of the Act.

18. It has been argued that sub-clauses of Section 75 of

the Act relate to the procedure to be followed by the
Officer after remand of the matter by the appellate
authority or tribunal or the court and sub-section (4)
should be read in that context and it requires that an
opportunity of hearing shall be granted where a request is
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received in writing from the person chargeable with tax or

penalty or where an adverse decision is contemplated
against such person.

19. It has however been argued by the learned counsel

for the petitioner that if such an interpretation is given to
Section 75 of the Act and its sub clauses, it would render a
situation anomalous and he has read out sub-sections (5),
(6), (7), (8) and (9) of Section 75 of the Act. Section 75 of
the Act in its entirety is quoted below:-
"Section 75. General provisions relating to determination of tax.
(1) Where the service of notice or issuance of order is stayed by an
order of a court or Appellate Tribunal, the period of such stay shall
be excluded in computing the period specified in sub-sections (2)
and (10) of section 73 or sub-sections (2) and (10) of section 74, as
the case may be.
(2) Where any Appellate Authority or Appellate Tribunal or court
concludes that the notice issued under sub-section (1) of section 74
is not sustainable for the reason that the charges of fraud or any
willful-misstatement or suppression of facts to evade tax has not
been established against the person to whom the notice was issued,
the proper officer shall determine the tax payable by such person,
deeming as if the notice were issued under sub-section (1) of
section 73.
(3) Where any order is required to be issued in pursuance of the
direction of the Appellate Authority or Appellate Tribunal or a
court, such order shall be issued within two years from the date of
communication of the said direction.
(4) An opportunity of hearing shall be granted where a request is
received in writing from the person chargeable with tax or penalty,
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or where any adverse decision is contemplated against such

person.
(5) The proper officer shall, if sufficient cause is shown by the
person chargeable with tax, grant time to the said person and
adjourn the hearing for reasons to be recorded in writing:
Provided that no such adjournment shall be granted for more than
three times to a person during the proceedings. (6) The proper
officer, in his order, shall set out the relevant facts and the basis of
his decision.
(7) The amount of tax, interest and penalty demanded in the order
shall not be in excess of the amount specified in the notice and no
demand shall be confirmed on the grounds other than the grounds
specified in the notice.
(8) Where the Appellate Authority or Appellate Tribunal or court
modifies the amount of tax determined by the proper officer, the
amount of interest and penalty shall stand modified accordingly,
taking into account the amount of tax so modified.
(9) The interest on the tax short paid or not paid shall be payable
whether or not specified in the order determining the tax liability.
(10) The adjudication proceedings shall be deemed to be
concluded, if the order is not issued within three years as provided
for in sub-section (10) of section 73 or within five years as
provided for in sub-section (10) of section 74.
(11) An issue on which the Appellate Authority or the Appellate
Tribunal or the High Court has given its decision which is
prejudicial to the interest of revenue in some other proceedings and
an appeal to the Appellate Tribunal or the High Court or the
Supreme Court against such decision of the Appellate Authority or
the Appellate Tribunal or the High Court is pending, the period
spent between the date of the decision of the Appellate Authority
and that of the Appellate Tribunal or the date of decision of the
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Appellate Tribunal and that of the High Court or the date of the
decision of the High Court and that of the Supreme Court shall be
excluded in computing the period referred to in sub-section (10) of
section 73 or sub-section (10) of section 74 where proceedings are
initiated by way of issue of a show cause notice under the said
sections.
(12) Notwithstanding anything contained in section 73 or section
74, where any amount of self-assessed tax in accordance with a
return furnished under section 39 remains unpaid, either wholly or
partly, or any amount of interest payable on such tax remains
unpaid, the same shall be recovered under the provisions of section
79.
(13) Where any penalty is imposed under section 73 or section 74,
no penalty for the same act or omission shall be imposed on the
same person under any other provision of this Act."

20. Learned counsel for the petitioner has also argued

that Section 75(4) of the Act would be rendered otiose if
this Court comes to the conclusion that the argument
raised by the learned counsel for the State-respondents is
liable to be accepted as Section 74(1) of the Act also
contemplates issuance of a notice and calling for a reply. It
has been submitted that Sections 73, 74 and 75 of the Act
lay down one integrated scheme regarding imposition of
tax or penalty and the procedure to be followed by the
Taxing Officer.

21. This Court having considered the submissions made

by the learned counsel for the parties has gone through
the leading judgment in the case of M/s Bharat Mint &
Allied Chemicals (supra) and finds that the said
 16

judgment although has read into the language of Section

75(4) of the Act and the right of "personal" hearing, it has
not mentioned any casus omissus on the part of the
legislature reading into the statute words like "personal"
hearing" as the Act itself only states that an opportunity of
hearing shall be given.

22. The golden rule for construing Wills, Statutes, and in

fact, all written instruments has been stated in Grey
versus Pearson (1857) 6 HL cases 61 as: –
“the grammatical and ordinary sense of the words is to be
adhered to, unless that would lead to some absurdity or some
repugnance or inconsistency with the rest of the instrument, in
which case the grammatical and ordinary sense of the words may
be modified, so as to avoid that absurdity and inconsistency, but
no farther”

23. However Jervis, C J, in Abley v Dale, 11, CB 378; as

quoted by the Supreme Court in the case of M/s Trutuf
Safety Glass Industries versus Commissioner of
Sales Tax, UP , 2007 (7) SCC 242, has further observed
that the latter part of this golden rule must, however, be
applied with with much caution. “If the precise words used
are plain and unambiguous, in a statute, we are bound to
construe them in their ordinary sense, even though it
leads in our view of the case, to an absurdity or manifest
injustice. Words may be modified or varied, where their
import is doubtful or obscure. But we assume the
functions of legislators when we depart from the ordinary
meaning of the precise words used, merely because we
 17

see, or fancy, an absurdity, or manifest injustice from an

adherence to the literal meaning”.

24. In Commissioner of Sales Tax versus Parson

Tools and Plants, 1975 (4) SCC 22, the Supreme Court
observed that the will of the legislature is the supreme law
of the land, and demands, perfect obedience. Judicial
power is never exercised for the purpose of giving effect to
the will of the judges; always for the purpose of giving
effect to the will of the legislature; or in other words, to
the will of the law. Therefore, where the legislature clearly
declares its intent in the scheme and language of a
Statute, it is the duty of the Court to give full effect to the
same without scanning its wisdom or policy, and without
engrafting, adding or implying anything which is not
congenial to or consistent with such expressed intent of
the law; if the Statute is a taxing Statute. If the legislature
wilfully omits to incorporate something of an analogous
law in a subsequent Statute, or even if there is casus
omissus in a Statute, the language of which is otherwise
plain and unambiguous, the Court is not competent to
supply the omission by engrafting on it or introducing in it,
under the guise of interpretation, or by implication,
something that it thinks to be a general principle of justice
and equity. To do so, would be entrenching upon the
preserve of the legislature, the primary function of a Court
of law, being jus dicere and not jus dare.

25. In Godrej and Boyce Manufacturing Company

Limited Vs Deputy Commissioner of I.T., Mumbai
 18

and another, 2017 (7) SCC 421; the Supreme Court

had observed that where the words of the Statute are
clear and unambiguous, recourse cannot be had to
principles of interpretation other than the literal rule. It
further observed that it is the bounden duty and obligation
of the Court to interpret the Statue as it is. It further
observed that it is contrary to all rules of construction to
read words into a Statute which the legislature in its
wisdom, has deliberately not incorporated.

26. Lord Hailsham in Pearl Berg versus Varty, (1972) 2

All ER 6; observed in regard to importation of the
principles of natural justice into a Statute, which is a clear
and complete code by itself, thus:–
“it is true, of course that the courts will lean heavily against any
construction of a Statute which would be manifestly unfair. But they
have no power to amend or supplement the language of a Statute,
merely because in one view of the matter, a subject feels himself
entitled to a larger degree of say in the making of a decision than a
Statute awards him. Still less is it the function of the courts to form
first a judgement on the fairness of an act of Parliament and then
to amend or supplement it with new provisions so as to make it
conform to that judgement,– –.”

27. As a matter of first principle, a casus omissus cannot

be supplied by the Court, unless there is a clear case of
necessity and when reason is found within the Statute
itself.(See Padmasundara Rao (dead) and others Vs State
of Tamil Nadu and others AIR 2002 Supreme Court 1334).
 19

28. In Institute of Chartered Accountants of India

versus M/s Price Waterhouse and another, AIR 1998
Supreme Court 74; the Supreme Court had observed
that the object of interpreting a Statute is to ascertain the
intention of the legislature in enacting it. The intention of
the legislature is primarily to be gathered from the
language used, which means that attention should be paid
to what has been said, and also to what has not been said.
As a consequence, a construction which requires for its
support, addition or substitution of words or which results
in rejection of words as meaningless has to be avoided.
Courts cannot aid the legislature’s defective phrasing of an
Act, we cannot add or mend, and by construction make up
deficiencies which are left there. It is contrary to all rules
of construction to read words into a Statute unless it is
absolutely necessary to do so. Principles of interpretation
do not permit Courts to do so, unless the provision as it
stands is meaningless or of doubtful meaning. Courts are
not entitled to read words into an Act of Parliament, unless
clear reason for it is to be found within the corners of the
Act itself.

29. In D.R. Venkatachalam and others, etc Vs.

Deputy Transport Commissioner and others, AIR
1977 Supreme Court 842, it was observed that courts
must avoid the danger of a priori determination of the
meaning of a provision based on their own preconceived
notions of ideological structure or scheme into which the
provision to be interpreted is somewhat fitted. They are
 20

not entitled to usurp legislative function under the guise of

interpretation.

30. The Supreme Court in the case of Bharat

Aluminium Company vs Kaiser Aluminium Technical
Services Inc., reported in 2012 (9) SCC 552, has held
that the Court must proceed on the footing that the
legislature intended what it has said. Even where there is
a casus omissus, it is for others than the Courts to remedy
the defect. it has quoted the House of Lords in Duport
Steels Ltd Vs. Sirs, 1980, All ER 529 (HL) in observing:-

“– – the role of the Judiciary is confined to ascertain from the

words that Parliament has approved as expressing its intention
what that intention was, and to give effect to it. Where the meaning
of the statutory words are plain and unambiguous, it is not for the
judges to invent fancied ambiguities as an excuse for failing to give
effect to the plain meaning because they themselves consider that
the consequences of doing so would be inexpedient, or even unjust
or immoral. ….,Under our constitution, it is Parliament’s opinion
on these matters that is paramount..”

31. In Canada Sugar Refining Company Limited versus

The Queen (Canada) 1898 AC 735, Lord Davey observed
that “the good expositor of an Act of Parliament should
make construction on all the parts together, and not of one
part only by itself. Every clause of a Statute is to be
construed with reference to the context and other clauses
of the Act, so as, as far as possible, to make a consistent
enactment of the whole Statute …”
 21

32. Two principles of construction, one relating to casus

omissus, and the other in regard to reading the Statute as
a whole, – appear to be well settled. Under the first
principle, the casus omissus cannot be supplied by the
Court, except in the case of clear necessity, and when
reason for it is found in the four corners of the Statute
itself, but at the same time a casus omissus should not be
readily inferred, and for that purpose, all parts of the
Statute or the section must be construed together, and
every clause of a section should be construed with
reference to the context and other clauses thereof, so that
the construction to be put on a particular provision makes
it consistent of the whole Statute. This would be more so if
literal construction of a particular clause leads to
manifestly absurd or anomalous results, which could not
have been intended by the legislature. An intention to
produce an unreasonable result is not to be imputed to a
Statute, if there is some other construction available.
Where to apply words literally would “defeat the obvious
intention of the legislature and produce a wholly
unreasonable result” we must “do some violence to the
words” and so achieve that obvious intention and produce
a rational construction, as per Lord Reid in Luke v. IRC
(1966 AC 557), where it has been observed “this is not a
new problem, though our standard of drafting is such that
itrarely emerges”.

33. In Commissioner of Customs (Import), Mumbai

Versus Dilip Kumar and Company and others, 2018 (9)
 22

SCC page 1, a Constitution Bench of the Supreme Court

was interpreting an exemption clause as per customs
Notification 20 of 1999, relating to concessional rate of
Duty pertaining to prawn feed. The concessional duty was
denied by the department to the respondent, who had
imported a consignment of Vitamin E 50 powder (feed
grade) on the ground that the goods under import
contained chemical ingredients for animal feed, and not
animal feed/prawn feed. The Supreme Court observed that
in the matter of interpretation of charging section of
taxation Statute, this rule of interpretation is mandatory
that if there are two views possible in the matter of
interpretation of the charging section, the one favourable
to the assessee needs to be applied.

34. The Supreme Court further observed that the

principles of interpretation of statutes come in handy here.
In spite of the fact that experts in the field assist in
drafting Act and Rules, there are many occasions where
the language used and the phrases employed in the
Statute are not perfect. Therefore, Judges and Courts
need to interpret the words. The purpose of interpretation
is essentially to know the intention of the legislature.
Whether the legislature intended to apply the law in a
given case; whether the legislature intended to give
discretion to enforcing authority or to adjudicating agency
to apply the law, are essentially questions to which
answers can be given only by knowing the intention of
Legislation. Apart from the general principles of
interpretation of statutes, there are certain internal aids
 23

and external aids, which are tools for interpreting the

Statutes. The long title, the preamble, the heading, the
marginal note, punctuation, illustrations, definitions, or
exclusionary clause, proviso to a section, explanation,
examples, a Schedule to the Act, et cetera are internal
aids to construction. The external aids to construction are
Parliamentary debates, history leading to the legislation,
other statutes which have a bearing, dictionaries,
thesaurus etc. It is well accepted that a Statute must be
construed according to the intention of the legislature and
the Courts should act upon the true intention of the
legislation while applying the law and while interpreting
the law. If a statutory provision is open to more than one
meaning, the Court has to choose the interpretation which
represents the intention of the legislature. In other words,
legislative intention i.e. the true or legal meaning of an
enactment is derived by considering the meaning of the
words used in the enactment in the light of any discernible
purpose or object, which comprehends the mischief and its
remedy to which the enactment is directed. The well
settled principle is that when the words in a Statute are
clear, plain and unambiguous and only one meaning can
be inferred, the courts are bound to give effect to the said
meaning irrespective of consequences.
In applying the rule of plain meaning, any hardship
and inconvenience cannot be the basis to alter the
meaning of the language employed by the legislation. This
is especially so in fiscal statutes and penal statutes.
Nevertheless, if the plain language results in absurdity, the
Court is entitled to determine the meaning of the word in
 24

the context in which it is used, keeping in view the

legislative purpose. Not only that, if the plain construction
leads to an anomaly or absurdity, the Court having regard
to the hardship and consequences that flow from such a
provision can even explain the true intention of the
legislation.

35. After referring to Justice GP Singh’s ‘Principles of

Statutory Interpretation’ and several English case laws and
also judgements of the Supreme Court, the Constitution
Bench in paragraph 34 of Commissioner of Customs
(Import), Mumbai Vs. Dilip Kumar and Company and
others, 2018 (9) SCC 1, has observed as under: –
“In interpreting a taxing statute, equitable considerations are
entirely out of place. A taxing statute cannot be interpreted
on any presumption or assumption. A taxing statute has
to be interpreted in the light of what is clearly expressed;
it cannot imply anything which is not expressed; it cannot
import provisions in the statute so as to supply any
deficiency; (ii) Before taxing any person, it must be
shown that he falls within the ambit of the charging section by
clear words used in the section; and (iii) If the words are
ambiguous and open to two interpretations, the benefit of
interpretation is given to the subject and there is nothing
unjust in a taxpayer escaping if the letter of the law
fails to catch him on account of Legislature’s failure to
express itself clearly”

36. When we examine the scheme of Sections 73, 74 and

75 of the Act taken together, we find that under Section
74, the procedure for determination of tax not paid or
 25

short paid or erroneously refunded or input tax credit,

wrongly availed or utilized by reason of fraud or any willful
misstatement or suppression of facts is provided. Under
sub-section (1) and (2) and (3), the proper officer shall
serve a notice on the person chargeable with such tax
requiring him to show cause as to why he should not pay
the amount specified in the notice along with interest
thereon under Section 50 and a penalty equivalent to the
tax specified in the notice.

37. Such notice should be given at least six months prior

to the time limit specified in Section 10 for issuance of
order; along with a statement containing the details of
tax, not paid or short paid or erroneously refunded or
input tax credit wrongly availed.

38. Sub-Section (4) provides that service of statement

under sub-Section (3) shall be deemed to be service of
notice under sub-Section (1) of Section 73.

Under sub-Section (5) of Section 74, the person

chargeable with tax may before service of notice under
sub-Section (1) pay the amount of tax along with interest
payable under Section 50 and a penalty equivalent to 50%
of such tax on the basis of his own ascertainment or as
ascertained by the proper officer and inform him in writing
of such payment. Under sub-Section (6), the proper officer
on receipt of such information shall not serve any notice
under sub-Section (1) in respect of tax payable if he is
satisfied with such payment, however, if he is not satisfied,
 26

then, under Sub-Section (7), he shall proceed to issue

notice as provided for under sub-Section (1) in respect of
such amount, which falls short of the amount actually
payable. This can be deemed to be a second notice, or a
second opportunity given to the assessee in respect of the
amount which falls short of the amount, actually payable.
If on service of such notice, the person chargeable with
Tax pays the tax along with interest under Section 50 and
a penalty equivalent to 25% of such tax, all proceedings in
respect of the said notice shall be deemed to be
concluded. Penalty in sub-Section (8) is equivalent to 25%
of such tax as against penalty, which is payable under sub-
Section (1), which is equivalent to the tax specified in the
notice.

Under sub-Section (9), the proper officer shall after

considering the representation if any, made by the person
chargeable with tax, determine the amount of tax,
interest, and penalty due from such person and issue an
order.

Under sub-Section (10), the limitation is provided

within which the proper Officer shall issue order under
sub-Section (9).

Under sub-Section (11), where any person is served

with an order issued under sub-Section (9) and he pays
the tax along with interest payable thereon under Section
50 and a penalty equivalent to 50% of such tax payable
within 30 days of communication of the order, all
 27

proceedings in respect of such notice shall be deemed to

be concluded.

39. It is evident from the scheme of Section 74 that

initially a notice along with a statement of tax payable
along with penalty has to be issued by the proper officer
within the time limit as prescribed, to which a
representation can be made by the assessee in case he is
dissatisfied with such computation of tax and penalty. On
the other hand, in case the assessee pays the amount as
given in the notice along with interest payable thereon and
penalty, then the proper officer may issue orders which
may conclude the proceedings.
It is when the assessee is dissatisfied then, whether
in addition to being given an opportunity for submitting
representation, he is also entitled to personal hearing is
the question that this court has to decide.

40. Section 75 starts with the subheading ‘General

Provisions relating to Determination of Tax’. It has been
argued that Section 75 of the Act will apply as a general
procedure to be adopted in all actions that are proposed to
be taken under Section 73 and 74 of the Act. As against
the argument raised by the learned Standing Counsel
appearing for the State Respondents, that Section 75
deals with the procedure to be followed by the proper
officer after remand of the matter to him by the Tribunal
or the Court; it has been argued that if such an
interpretation is given to Section 75 of the Act, it would
 28

render the situation anomalous as many of the sub-

Sections of Section 75 would become otiose.

41. We have gone through the language of Section 75.

Indeed sub-Section (1), sub-Section (2) and sub Section
(3) relate to determination to be made by the proper
officer after the Court or the Appellate Tribunal quashes
the original order and remands the matter for a fresh
determination to the proper officer. However, from sub-
Section (4) onwards the procedure to be followed by the
proper officer in determination of tax is given in detail.
Sub-Section (4) of Section 75 provides that an opportunity
of hearing shall be granted where a request is received in
writing from the person chargeable with tax or penalty, or
where any adverse decision is contemplated against such
person. Sub-Section (5) provides that if sufficient cause is
shown by the person chargeable with tax, the proper
officer shall grant time to the said person and adjourn
the hearing for reasons to be recorded in writing:
provided that no such adjournment shall be granted for
more than three times to a person during the proceedings.
Sub-Section (6), (7), (8), (9), (10) and (11) of Section 75
relate to the Order to be passed in by the proper officer,
determining the amount of tax, interest, and penalty, in
conformity with the notice issued to the assessee, and also
to nature of the adjudication proceedings and the
limitation for concluding the same.

42. It is evident that Sub-Section (1), (2), (3), (8) and

(11) deal with adjudication by the proper officer after
 29

remand either by the Appellate Tribunal or the Courts,

whereas sub-Sections (4) and (5), (6), (7), (9) and (10),
in Section 75 deal with assessment before the matter is
taken up in appeal and remanded to the proper officer for
reconsideration on merit.

43. If we take recourse to internal aids to construction of

the charging Section then ‘Sub-heading‘ being an internal
aid, can be validly referred to while determining the true
purport of the words ‘opportunity of hearing’. Sub-heading
of Section 75 clearly states that it describes the ‘General
Provisions relating to Determining of Tax’; then most
certainly Section 75 deals with all kinds of hearings for
determining tax, both at the first instance and also on
remand. Also sub-Section (4) is followed by sub-Section
(5), which requires an officer to adjourn a hearing on the
request of the person chargeable to Tax, in case sufficient
cause is shown by such person after recording reasons for
such adjournment in writing. Such words as are used for
granting more time to the assessee and adjourning the
hearing can only be interpreted to mean giving “personal”
hearing. Adjournment is granted in cases where hearing is
continuing. It cannot be said to relate to giving time
extensions for giving written reply to the show cause
notice.

44. Taking into account the settled principles of

interpretation of Statutes, (a) all Sections of a Statue need
to be read together, (b) no words, Section in a Statute can
be rendered otiose, (c) any ambiguity in a charging
 30

Section must be read in favour of the assessee, (d) a

casus omissus can be supplied if the Court, having an
overall view of the scheme of the Statute is convinced that
the legislature did intend a certain manner of conducting
predecisional hearing but draftsman failed to add the
necessary words to make it plain and beyond doubt; we
are of the considered opinion that word “personal” can
easily be construed to have been intended to be added
but has been left out erroneously. We, therefore, are in
respectful agreement with the three Coordinate Bench
decisions cited at the Bar by learned counsel for the
petitioner.

45. The Writ Petition is allowed and the orders dated

19.02.2024 and 27.04.2024 are set aside. The matter is
remitted back to the proper officer to provide opportunity
of personal hearing to the petitioner and then to pass a
fresh order in accordance with statutory provisions.

[Justice Brij Raj Singh] [Justice Sangeeta Chandra]

Order Date :-31/05/2024

Rahul/-

Digitally signed by :-
RAHUL TRIPATHI
High Court of Judicature at Allahabad,
Lucknow Bench