1

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. OF 2022

(ARISING OUT OF SLP (C) Nos. 3384-3386 OF 2017)

CHANDRA PRAKASH MISHRA APPELLANT(S)

VERSUS

FLIPKART INDIA PRIVATE LIMITED & ORS. RESPONDENT(S)

JUDGMENT

DINESH MAHESHWARI, J.

Leave granted.

2.In these appeals, the appellant, presently working as Joint

Commissioner, Commercial Tax, Moradabad, has questioned the order

dated 29.02.2016 in Writ Petition Nos. 80 of 2016 and 168 of 2016

as also the order dated 02.08.2016 in Writ Tax No. 546 of 2016, as

passed by the High Court of Judicature at Allahabad.

2.1.The appellant is aggrieved of the orders impugned, insofar as

adverse observations and remarks have been made and directions have

been issued in relation to his acts and omissions while functioning

as the Deputy Commissioner, Commercial Tax, Range-II, Sector-2,

Noida, viz., passing ex parte assessment orders and enforcing

recovery proceedings under the Uttar Pradesh Value Added Tax Act,

2008

1

, concerning the writ petitioner (respondent No. 1 herein)

2

.

3.The impugned orders have otherwise not been challenged by the

State or by the writ petitioner. Therefore, dilation on all the

factual aspects is not necessary. The aspects relevant for the

present purpose are as follows:

1 Hereinafter referred to as ‘the UP VAT Act’.

2 The impugned orders had been passed in the writ petitions filed by the

respondent No. 1. For continuity of narrations and in the given context, the

respondent No. 1 has also been referred to as ‘the writ petitioner’.

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3.1.By way of Writ Petition No. 80 of 2016, the writ petitioner

questioned the recovery proceedings, as taken up against it

pursuant to the ex parte provisional assessment order passed by the

appellant in his capacity as the Assessing Authority. In response

to the said writ petition, it was pointed out on behalf of the

department that an application made by the writ petitioner for

registering the changed address had already been rejected on

02.09.2014 and, therefore, ex parte order had rightly been passed

after taking due steps for service of notice.

3.2.The said order dated 02.09.2014, as passed by the Registering

Authority (not the appellant) rejecting the prayer for registering

the changed address was challenged in the other writ petition

bearing No. 168 of 2016.

3.3.Thus, in sum and substance, the ex parte provisional

assessment order dated 15.12.2015 and the recovery proceedings as

also the order dated 02.09.2014 rejecting the prayer for

registration of the changed address were in challenge before the

High Court in the said writ petitions bearing Nos. 80 of 2016 and

168 of 2016. As noticed, the appellant had been functioning as the

Deputy Commissioner, Commercial Tax, Range-II, Sector-2, Noida and

had passed the aforesaid ex parte order in his capacity as the

Assessing Authority. However, the aforesaid order rejecting the

prayer for registering the changed address was passed by the

Registering Authority, being the Assistant Commissioner, Commercial

Tax, Divison-2, Noida.

4.The issues involved in the said writ petitions were considered

and dealt with by the High Court in its common order dated

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29.02.2016.

4.1.The High Court essentially found that the ex parte order was

passed against the writ petitioner without proper service of

notice. The facts were taken note of that, according to the writ

petitioner, it had shifted its place of business from Noida to

Ghaziabad, which was very much in the knowledge of the department

in view of the applications made and other communications addressed

by it. There was a suggestion on behalf of the State as regards

service of notice at Ghaziabad but, that service was also not taken

as sufficient by the High Court after its interpretation of the

requirements under the rules.

4.2.The High Court, therefore, set aside the ex parte assessment

order dated 15.12.2015 and quashed the recovery proceedings. The

High Court also set aside the order dated 02.09.2014, rejecting the

writ petitioner’s application for registration of the change of

place of business and directed the Registering Authority to process

the application made by the writ petitioner on 05.12.2013 for

change of place of business after permitting the writ petitioner to

deposit the requisite fees.

4.3.The High Court found that a huge amount to the tune of Rs.

49,82,01,250/- had been withdrawn by the department from the writ

petitioner’s account without authority of law. Hence, the Deputy

Commissioner, Commercial Taxes, Range-II, Noida was directed to

refund the said amount together with interest as per Section 40 of

the UP VAT Act after adjusting the admitted tax. The High Court, of

course, left it open for the Assessing Authority to make fresh

assessments in accordance with law, after proper service of notice

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upon the writ petitioner and after giving them an opportunity of

hearing.

5.In the aforesaid part of the impugned common order dated

29.02.2016 i.e., upto paragraph 34, the High Court dealt with the

core issues involved in the case and contentions of the respective

parties and, thereafter, passed the orders consequent to its

findings on the material issues that there had not been proper

service of notice upon the writ petitioner and the ex parte orders

were not sustainable.

6.However, before closing the matter, the High Court proceeded

to express its opinion that the impugned actions, leading to ex

parte orders/proceedings without proper service of notice, were of

deliberate attempt on the part of the department against the

interests of the writ petitioner; and the Assessing Authority

adopted unfair tactics in getting the service effected in gross

violation of the applicable rules.

6.1. The High Court, therefore, imposed costs to the tune of Rs.

2,00,000/-, to be paid by the department to the writ petitioner,

and left it open for the Commissioner, Commercial Tax, Lucknow to

institute an inquiry and to fix responsibility on the erring

officer for recovery of the amount of costs. The said part of the

order dated 29.02.2016, which has been questioned by the appellant

in this appeal, reads as under: -

“35. Before parting, we must observe the manner in which

the respondents have proceeded with the assessment and

recovered the amount from the petitioner's Bank account in

haste is deplorable and in gross violation of the

provisions of the Act. We find that for the assessment

years 2011-12, 2013-14 and 2014-15 ex-parte assessment

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orders were made without adequate service of notices upon

the petitioner. These assessment proceedings were set aside

in appeal on the short ground that the service of the

summons were sent at the address where the petitioner was

no longer carrying on its business. Inspite of this

knowledge, the respondents chose deliberately to serve the

notice for provisional assessment for the period April to

October, 2015 upon the petitioner at the Noida address

knowing fully well that the petitioner was not carrying any

business from the Noida address. The respondents knew very

well that the petitioner had shifted its place of business

from Noida to Ghaziabad as they made a futile attempt to

serve the notice at Ghaziabad but later for the reasons

best known to them, chose deliberately to serve the notice

by affixation at the Noida address. Such tactics adopted by

the assessing authority in getting the service effected

upon the petitioner was in gross violation of Rule 72 of

the Rules.

36. We also find that the entire exercise of service was

done within four days without taking recourse to the other

mode of service, namely simultaneously service by

registered post with acknowledgment due. The assessment

order indicates that the first and last date of hearing of

the assessment proceedings was 10.12.2015 and that the

assessment order was passed on 15.12.2015. The counter

affidavit reveals that the assessment order was served by

attachment at the Noida address. This was done deliberately

by the respondents so that the respondents could withdraw

the amount through garnishee notices by exerting pressure

upon the bank authorities. The Court gets an uncanny

feeling that a deliberate attempt was made by the

respondents to withdraw the money from the petitioner's

bank account through dubious mean by passing ex-parte

assessment orders and not allowing it to be served validly

upon the petitioner. If in this cavalier fashion the

Commercial Tax Department functions and withdraws huge sums

of money without valid service, it would be difficult for

big business houses to carry on their business. Such

business houses would be forced to shift their business

outside the State of Uttar Pradesh.

37. Consequently, the petitioners are entitled for cost.

The writ petitions are allowed with cost amounting to

Rs. 2,00,000/- (Rupees two lakhs only), which will be paid

by the Commercial Tax Department to the petitioner within

two weeks from the date of filing of a certified copy of

this order. If the amount is not paid, it would be open to

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the petitioner to move an appropriate application in this

petition.

38. It would be open to the Commercial Tax Commissioner,

Lucknow to institute an enquiry and fix responsibility on

the erring officer for recovery of the said amount.”

7.Even after the order so passed by the High Court, the

appellant, again in his capacity as the Assessing Authority, drew

up another assessment order dated 04.05.2016 against the writ

petitioner. This order was again questioned by the writ petitioner

by way of another writ petition in the High Court, being Writ Tax

No. 546 of 2016. I n this subsequent writ petition, the present

appellant was personally impleaded as respondent No. 1 .

7.1.On 11.07.2016, while initially dealing with the said petition,

Writ Tax No. 546 of 2016, t he High Court referred to the background

aspects, in particular to the aforesaid order dated 29.02.2016 and

then, took exception that the present appellant at all chose to

pass the impugned assessment order on 04.05.2016, which was not in

conformity with what was held in the order dated 29.02.2016. The

High Court, while issuing notice and staying operation of the

impugned assessment order and the consequential notice, observed as

under: -

“1. It is contended that petitioners' registered office

address has been changed to Ghaziabad and Deputy

Commissioner of Commercial Tax, Noida had no jurisdiction

to make assessment and this was also observed by this

Court in its judgment dated 29.02.2016 in Flipkart India

Pvt. Ltd. Vs State of U.P. and others, reported in 2016

NTN (Vol. 60) 313 wherein Court observed that authority

at Noida had no jurisdiction to make assessment after

change of place of business/registered office of

petitioner company at Ghaziabad, still respondent no. 1

has proceeded to serve notice at the supposed address at

Noida and thereafter has passed impugned order.

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2. It is contended that the order impugned is patently

illegal, without jurisdiction and has been passed to

frustrate the judgment of this Court in which serious

strictures had been passed against the officer concerned

and this Court had imposed cost of Rs. Two Lacs.

3. We find it a serious matter. Let respondent 1 himself

appear along with relevant records on 02.08.2016 before

this Court. He shall also file para-wise reply to the

writ petition on the next date.

4. Until further orders, the effect and operation of

impugned assessment order dated 04.05.2016 and notice

dated 07.04.2016 shall remain stayed.”

7.2.When the matter was taken up for further consideration by the

High Court on 02.08.2016, it was submitted by the learned standing

counsel for the department that the impugned assessment orders had

since been withdrawn by the present appellant on 23.07.2016 and,

therefore, the writ petition was practically rendered infructuous.

It was also stated on behalf of the appellant, who was present in

Court, that there had been a mistake on his part and he was

tendering an apology, which could be considered by the Court.

7.3.The High Court, however, viewed the functioning of the

appellant seriously questionable, particularly for his acts and

omissions after the strictures in, and penal costs imposed by, the

order dated 29.02.2016. Thus, while imposing costs of Rs. 50,000/-

personally on the appellant, the High Court made the observations

that departmental action be taken and finalised at the earliest and

the department would also consider as to whether the appellant was

a person fit to be assigned such important quasi-judicial

functions. The relevant part of the order dated 02.08.2016 could be

usefully extracted as under:-

“13. Additional Commissioner, Commercial Tax, Noida,

sought a clarification from Commissioner, Commercial Tax,

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vide letter dated 29.06.2016 whereupon the Commissioner

vide letter dated 20.07.2016 directed the registering

authority to pass appropriate order in accordance with

directions of this Court. The registering authority has

passed an order on 23.07.2016 under Section 17(14)(a) of

the Act transferring the place of business of petitioner

from Noida to Ghaziabad w.e.f. 20.01.2013 and

consequently now the Deputy Commissioner, Commercial Tax,

Sector 7, Ghaziabad becomes Assessing authority of

petitioner w.e.f. 20.01.2013. Pursuant thereto respondent

1 has passed an order on 23.03.2016 ( sic)

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withdrawing

the assessment orders dated 04.05.2016 impugned in this

writ petition.

14. It is admitted that application for transfer of

business address was filed on 05.12.2013 which was

rejected by respondent 1 on 02.09.2014 and the said order

was set aside by this Court vide judgment dated

29.02.2016.

15. Learned Standing Counsel at the outset clearly stated

that since the assessment orders impugned in this writ

petition have now been withdrawn by respondent No. 1 by

order dated 23.07.2016 in substance, writ petition has

rendered infructuous and be dismissed accordingly.

16. We however required him to tell us as to how

respondent 1 could dare to pass further assessment

orders, when earlier orders passed by him were declared

without jurisdiction by this Court by referring to the

similar application of petitioner for change of business

address. In reply thereto a very bulky counter affidavit

has been filed separately by respondent l. Despite he

could not explain as to what was the occasion for any

confusion when the needs were very clearly disclosed and

decided in Courts' judgment dated 29.02.2016 and why

respondent 1 was in so such a hurry so as to pass the

impugned assessment orders on 04.05.2016.

17. Sri S.D. Singh, learned Senior Counsel, representing

respondent 1 who is also present in person before this

Court at the outset stated that there is a mistake on the

part of respondent 1 which cannot be explained

satisfactorily but respondent 1 dedicates apology and

therefore, Court may consider the same and pass

appropriate order.

18. In these facts and circumstances we are satisfied

that here is a forced litigation by unmindful illegal act

3 The date ‘23.03.2016’ is of typographical error. The correct date is

‘23.07.2016’.

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on the part of respondent 1 and realizing the same he has

also withdrawn the impugned orders and also considered

the fact he is an authority which was already adversely

commenced by this Court in its order dated 29.02.2016

still he did not care to such observations. It is again a

fit case where respondent 1 himself would be saddled with

cost by this litigation. Since the impugned order of

assessment have already been recalled by order dated

23.07.2016 in this regard no further order is required

but we hold that respondent 1 being guilty of compelling

and forcing second round of litigation upon petitioner

must be saddled with cost which we quantify to

Rs. 50,000/-.

19. We also direct Principal Secretary, Trade Tax, U.P.

Government to look into the manner in which respondent 1

has functioned in this case and despite strictures and

penal cost imposed by this Court in earlier judgment

dated 29.02.2016 and also directing Commissioner Trade

Tax to get an inquiry conducted against erring officials,

respondent 1 has not cared to mend his ways to conduct

but has proceeded to harass a dealer like petitioner and

appropriate disciplinary action be taken at the earliest

and finalise the same. It may also be considered by

Principal Secretary, Trade Tax, U.P. Government as to

whether, respondent 1 is a person fit to be assigned such

important quasi-judicial functions.

20. A copy of this order shall be communicated forthwith

for communication and compliance of the direction.

21. Writ petition is accordingly disposed of.”

8.Seeking to question the orders aforesaid, insofar they operate

against the appellant, Mr. Pallav Shishodia, learned senior counsel

has submitted that the adverse observations and directions by the

High Court against the appellant were not called for, even if the

orders passed by the appellant in his capacity as the Assessing

Authority were not approved because, there had not been any malice

on the part of the appellant, who only carried out his statutory

duties of timely completing the assessments and taking follow up

actions.

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8.1.Learned senior counsel has forcefully submitted that the

proposition of change of address by the writ petitioner (respondent

No.1) had been suffering from several shortcomings including the

fundamental one that the application made on 05.12.2013 while

alleging the change of business address in the month of January

2013, was not in conformity with the requirement of Section 75 of

the UP VAT Act whereunder, such an application was required to be

made within 30 days of the event.

8.2.Learned senior counsel for the appellant would submit that

when the belatedly filed application had been rejected on

02.09.2014, the appellant, acting as an Assessing Authority, could

have only proceeded on the basis of the registered address

available on the record. Moreover, it is clear that when the

respondent No. 1 was not available at the registered address, the

appellant, acting in bonafide discharge of his duties, even

attempted to get the notices served at Ghaziabad but, the High

Court did not accept that service to be a proper service.

8.3.Learned senior counsel would submit that the appellant as an

Assessing Authority only proceeded in accordance with the facts

available on record and nothing of want of good faith could be

imputed on him. Learned senior counsel has further referred to the

subsequent facts that the application for change of address was

ultimately granted on 22.07.2016 whereby, the department accepted

the change of address with effect from 20.01.2013; and that

immediately after passing of such an order by the Registering

Authority i.e., the Assistant Commissioner, Commercial Tax,

Division-2, Noida, the appellant withdrew the order dated

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04.05.2016 passed by him because with such change of address, he

ceased to be having jurisdiction in the matter. The contention of

the learned senior counsel, however, is that before passing of such

an order by the competent authority, the appellant could have only

proceeded on the basis of position obtainable on record and as

such, want of bonafide cannot be imputed on him. Thus, according to

the learned counsel, the strictures and other observations made in

the orders impugned deserve to be set aside.

8.4.Learned senior counsel for the appellant has also referred to

Section 67 of the UP VAT Act to submit that statutory protection is

available to the officers like the appellant against legal

proceedings in relation to anything done in good faith in discharge

of their duties and jurisdiction.

9.Mr. R. K. Raizada, learned senior counsel appearing for the

State has submitted that the State has proceeded in adequate

compliance of the orders passed by the High Court; and has carried

out inquiry as contemplated by the order dated 29.02.2016 but,

further proceedings are put on hold, in view of the stay order

passed by this Court in this matter on 27.01.2017.

10.Mr. Tarun Gulati, learned senior counsel appearing for the

respondent No. 1 (writ petitioner) has submitted that the

respondent No. 1 had not taken up any personal lis against the

present appellant nor the first two petitions were founded on any

grounds personal to the appellant; and only the action of the State

and its officers were questioned, particularly because of denial of

adequate opportunity of hearing with proper notice.

10.1. Learned senior counsel has further submitted that the High

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Court had rightly disapproved the actions as taken and the orders

as passed ex parte by the present appellant in his capacity as the

Assessing Authority. The other part of the order dated 29.02.2016,

according to the learned counsel, had been based on the views of

the High Court because of the harassment apparently faced by the

respondent No. 1 and because of want of appropriate and lawful

action by the functionaries of the State. The learned counsel would

further submit that in the later writ petition i.e., Writ Tax No.

546 of 2018, the appellant was personally impleaded as a party-

respondent for the reason that he chose to pass the order dated

04.05.2016, rather at conflict with the High Court’s order dated

29.02.2016.

10.2. Learned senior counsel has, however, frankly submitted that

the respondent No. 1 is otherwise carrying no grievance personally

against the appellant; and respondent No. 1 is not keen to even

retain the amount of costs awarded by the High Court and would be

willing to return the same as may be directed by this Court. It has

also been pointed out that the respondent No. 1 has only received

the amount of Rs. 2,00,000/- towards cost, as awarded by the order

dated 29.02.2016; and the other amount of Rs. 50,000/-, as awarded

by the order dated 02.08.2016, has not been received in view of the

stay order passed by this Court.

11.Having given thoughtful consideration to the submissions made

and having examined the material placed on record, we are clearly

of the view that the questioned parts of the orders impugned

deserve to be annulled with appropriate order towards the amount of

Rs. 2,00,000/- awarded as costs, which has been fairly given up by

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the respondent No. 1.

12.So far as the observations and findings in the impugned order

dated 29.02.2016 relating to the merits of the case are concerned,

no comments are required in that relation, for the same having not

been challenged by the State. However, in our view, even when all

the findings of the High Court in the principal part of order dated

29.02.2016 are accepted, they would only lead to the result that

the impugned actions in drawing up ex parte assessment orders and

then seeking to enforce recovery as also the impugned action in

rejecting the application for registration of change of place of

business did not meet with the approval of the High Court. Such

disapproval of the High Court had been essentially based on its

interpretation of the applicable rules as also its analysis of the

factual aspects concerning the issues involved in the writ

petition.

13.Having examined the matter in its totality, we are of the view

that even if the High Court found that the impugned actions of the

authorities concerned, particularly of the appellant, had not been

strictly in conformity with law or were irregular or were illegal

or even perverse, such findings, by themselves, were not leading to

an inference as corollary that there had been any deliberate action

or omission on the part of the Assessing Authority or the

Registering Authority; or that any ‘tactics’ were adopted, as per

the expression employed by the High Court. Every erroneous, illegal

or even perverse order/action, by itself, cannot be termed as

wanting in good faith or suffering from malafide.

14.In the present case, when admittedly the respondent No. 1

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itself had applied for registration of the change of place of

business nearly 11 months after the alleged event; and at the time

of drawing up the assessment orders, the appellant as the Assessing

Authority had no other registered address of the respondent No. 1

on record, his actions of passing ex parte assessment orders could

not have been termed as being deliberate or wanting in good faith,

particularly in view of the facts that attempts were indeed made

from his office to get the notices served on the respondent No. 1

at its registered address and even at its alleged changed address

at Ghaziabad. Even if such attempts, of serving notices, were held

to be illegal or irregular by the High Court, its deduction that

the impugned actions were deliberate or lacking in good faith is

difficult to be endorsed.

14.1. The appellant, while functioning as an Assessing Authority

could not have kept the assessment proceedings pending for an

indefinite length of time. In this context, the aforementioned

facts relating to shortcomings on the part of the respondent No. 1

in first of all not seeking registration of the changed business

address for nearly 11 months and then, rejection of its belatedly

made prayer by the competent authority (not the appellant) cannot

be ignored altogether.

15. What has been observed hereinabove, with necessary

variations, would equally apply to the later order dated 04.05.2016

passed by the appellant, in his capacity as the Assessing

Authority. Though, in the face of the order dated 29.02.2016, the

appellant could have waited for consideration of the application

for change of address, as directed by the High Court or could have

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taken instructions from the Commissioner but, in any case, even

such mistakes or errors or omissions on his part cannot be

considered as carrying the elements of malice or want of good

faith.

16.In our view, for imputing motives and drawing inference about

want of good faith in any person, particularly a statutory

authority, something more than mere error or fault ought to exist.

Nothing concrete is available on record to impute motives in the

appellant, even if his actions/omissions while functioning as

Assessing Authority otherwise called for disapproval.

17.In the questioned parts of the impugned orders, the High Court

seems to have taken rather a sterner view of the matter, which was

not required in the given set of facts and circumstances.

Noticeably, the appellant was not impleaded personally a party in

the first two writ petitions which were decided by the common order

dated 29.02.2016. The comments or remarks which were to operate

personally against the appellant were not even called for without

the appellant having been joined personally a party and having been

extended an opportunity of hearing and explanation. In the third

writ petition decided by the order dated 02.08.2016, though the

appellant was personally joined as a party-respondent, when he had

withdrawn the order dated 04.05.2016 immediately after registration

of changed address by the registering authority and had tendered an

apology before the High Court, in our view, the matter could have

been closed at that; and there was no necessity of stretching the

matter too far and passing further orders for imposition of costs

and for departmental actions with other comments regarding

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competence of the appellant to discharge quasi-judicial functions

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.

Having said that, we deem it appropriate to close this matter with

annulment of strictures and observations against the appellant in

both the impugned orders dated 29.02.2016 and 02.08.2016.

21.As regards the amount of costs, we appreciate the fair stand

taken on behalf of the respondent No. 1. Having regard to the

circumstances, we deem it appropriate and hence order that the said

amount of Rs. 2,00,000/- shall be deposited by the respondent No. 1

with the Uttar Pradesh State Legal Services Authority.

22. With the requirements aforesaid, the remarks and observations

against the appellant in the impugned orders are expunged; and the

questioned parts of the impugned orders, as reproduced hereinabove,

are annulled and set aside.

23.Needless to observe that any action taken or in contemplation

pursuant to the aforesaid parts of the impugned orders are also

rendered redundant.

24.The appeals stand allowed to the extent and in the manner

indicated above.

……………………………………………J.

(DINESH MAHESHWARI)

……………………………………………J.

(ANIRUDDHA BOSE)

New Delhi;

March 30, 2022.

4 The mistakes, errors or lapses, of course, need to be dealt with by the

persuasive reasoning by the Court and necessary orders are also to be passed as

may be required in the given set of circumstances but, it is not necessary to

‘crack the whip’ on every mistake [vide the observations of this Court in V.K.

Jain v. High Court of Delhi: (2008) 17 SCC 538].

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IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

MISCELLANEOUS APPLICATION NOS.251-253 OF 2023

IN

CIVIL APPEAL NOS.2859-2861 OF 2022

CHANDRA PRAKASH MISHRA APPELLANT

VERSUS

FLIPKART INDIA PRIVATE LIMITED & ORS. RESPONDENTS

O R D E R

Perused the office report.

The paragraph numbering of the judgment dated

30.03.2022 shall stand corrected after paragraph 17 so as

to provide continuity. In other words, the numbers “21,

22, 23 and 24” of the paragraphs shall be read as “18,

19, 20 and 21”.

The miscellaneous applications are disposed of.

...................J.

(DINESH MAHESHWARI)

...................J.

(SANJAY KUMAR)

New Delhi;

February 27, 2023