M/S Hindustan Coco-Cola ... vs State Of U.P. Through Secretary ...
2013 Latest Caselaw 1005 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
 
 

RESERVED
 

 
WRIT PETITION NO.11065 OF 2008 (M/B)
 

 
M/s Hindustan Coca-cola Beverages Private 
 
Limited 						.......... Petitioner
 
Versus
 
State of U.P. and others 			.......... Respondents
 

 
******
 
Hon'ble Rajiv Sharma, J.

Hon'ble Vinay Kumar Mathur, J.

Heard Sri Bharat Ji Agarwal, Senior Advocate, assisted by Sri Rahul Agarwal, appearing on behalf of the petitioner and Sri H.P. Srivastava, Additional Chief Standing Counsel.

Through the instant writ petition under Article 226 of the Constitution of India, the petitioner challenges the notice dated 21.11.2008 issued by the Commissioner, Commercial Tax, U.P., Lucknow, under Section 4-A (3) of the U.P. Trade Tax Act, 1948 [hereinafter referred to as the "Act"]. Further it has been prayed that the Commissioner, Commercial Taxes, U.P., Lucknow be directed to decide the application dated 20.8.2008 filed by the petitioner under Section 42 of the U.P. Value Added Tax and issue Certificate of Entitlement due to the petitioner.

Brief facts, giving rise to the instant writ petition, are that petitioner, namely, M/s Hindustan Coca-cola Beverages Private Limited, is a Private Limited Company registered under Indian Companies Act and is a Dealer within the U.P. Trade Tax (now U.P. Value Added Tax) as well as under Central Sales Tax Act. In order to attract industrial investment within the State of U.P., notifications were issued from time to time under Section 4 (A) of the Act for grant of exemption from payment of Tax.

In the year 1995, notification Nos. 780 and 781 dated 31.3.1995 was issued for granting exemption from payment of sales tax to industrial units in respect of fixed capital investment made by them till the commencement of production. The said notifications provides that units making investment of more than Rs.50 Crores were entitled to 100% exemption for a period of 12 years, 10 years and 8 years depending upon the district in which the unit is situated and also to the extent of 250%, 200% and 175% of the fixed capital investment made upto the time of commencement of production. In the said notification, there is a negative list and the units, which are coming in the negative list, would not be entitled to the incentive.

Subsequently, on 21st February, 1997, the State of U.P. issued another Notification Nos. 640 of 641 under Section 4-A of the U.P. Trade Tax Act and Section 8 (5) of the Central Sales Tax Act, by which the State Government granted exemption to the industrial units making a fixed capital investment of Rs.50 Crores or more within a period of five years from the date of starting production from payment of tax for a period of 12 years, which was subsequently increased to 15 years or to the extent of 250%, 200% and 150%, whichever exhausts earlier, depending upon the district in which the unit was situated. The distinction between notification dated 31.3.1995 and 21.2.1997 is to the effect that under notification dated 31.3.1995, the entire investment was to be made till the date of commencement of production, while under notification dated 21.2.1997, the investment of Rs.50 Crore or more could be made within five years from the date of starting such production. The new units were also required to give the details of additional fixed capital investment made during each of the five assessment years to the assessing authority who had to verify and certify the same as provided under Clause 3 (i) of the notification.

It is said that the petitioner's company established a new unit for the manufacture of Soft Drinks under the name and style of Coca Cola, Fanta, Thumps Up, Limca and also Kinley mineral water, at Village Dasna, Masuri-Gulawthi, Tehsil Hapur, District Ghaziabad, after making an initial fixed capital investment during the Assessment Year 1998-99 on various fixed assets viz. land, building, plant, machinery etc. Thereafter, the petitioner's unit had submitted an application for grant of Eligibility Certificate in the requisite format i.e. Form No. XLVI on 24.3.1999, declaring fixed capital investment of Rs.96,53,11,682/- but subsequently, as the petitioner had invested Rs.1,02,08,99,877/- upto 26.4.1999, he submitted a revised application on 27.3.2000.

According to the petitioner, his established unit at Dasna started production on 19.2.1999 and it made the first sale on 24.3.1999 from the unit established in pursuance of the incentive notification of the State Government and as such, the petitioner submitted a revised application for grant of Eligibility Certificate under Section 4-A of the U.P. Trade Tax Act declaring the fixed capital investment of Rs.1,02,08,99,877 till 26.4.1999. The original application as well as revised application were processed.

During the pendency of both the above applications, State Government issued another two notifications i.e. Notification Nos. 1340 dated 1.7.1999 and 1341 dated 29.9.1999. By the notification dated 1.7.1999, the State Government brought the units manufacturing Cold drinks in the negative list mentioned in the notification Nos. 780 and 781 dated 31.3.1995, whereas vide notification No. 1341 dated 29.9.1999, the State Government by amending the earlier notification Nos. 640 and 641, withdrew the benefit of exemption granted by it to the units manufacturing cold drinks.

According to the petitioner, prior to coming into force of the above notification No. 1341 dated 29.9.1999, a Member of District Industries Centre, Ghaziabad had inspected petitioner's new unit on 23.7.1999 and after due inspection, the District Industries Centre, Ghaziabad forwarded its report to the Divisional Level Committee (Meerut). On receipt of the report, while computing the fixed capital investment of Rs.80,18,50,309/- in place of the certified fixed capital investment of Rs.1,02,08,99,877/-, the Divisional Level Committee (Meerut) granted the Eligibility Certificate to the petitioner on 22.1.2001 under Section 4-A of the U.P. Trade Tax Act. However, since no reasons for reducing the quantum of the fixed capital investment made by the petitioner was mentioned in the Eligibility Certificate, the petitioner preferred an appeal, bearing No. 55 of 2001, under Section 10 of the U.P. Trade Tax Act before the Trade Tax Tribunal, Lucknow [hereinafter referred to as the "Tribunal"]. The Tribunal, vide order dated 16.7.2003, while allowing the appeal partly, remanded the matter to the Divisional Level Committee with a direction to decide the review application of the petitioner where three major points, namely, the curtailment in the Fixed Capital Investment; Ommission/Mistakes in the name of the Company; and the commencement of production in the unit. It was also provided that in case the review application is decided against the petitioner, the Divisional Level Committee in that case too also have to decide the three points again as provided in the remand proceedings after issuing show cause notice and affording the opportunity of hearing to the petitioner while disposing of the matter in issue.

On remand, the Divisional Level Committee issued the amended Eligibility Certificate on 12.12.2003 by increasing the fixed capital investment from Rs.80,15,55,309/- to Rs.94,07,34,979/- but maintained the other conditions of the original Eligibility Certificate. The said amended Eligibility Certificate dated 12.12.2003 has not been ever challenged by the petitioner or the Trade Tax Department and as such, the same has become final. Thereafter, in accordance with para 3 (I) of the Notification dated 21.2.1997 and in accordance with the directions of the Divisional Level Committee, the petitioner submitted to the Assessing Authority the details of the additional fixed capital investment made during the assessment year; every year, the cumulative additional fixed capital investment made after 19.2.1999, till the end of each assessment year as contemplated in para 3 (i) (a) (b) of the notification dated 21.2.1997.

After the end of five years, the Deputy Commissioner (Assessment) Trade Tax, Nazibabad, Bijnore, vide order dated 30.6.2004, included an amount of Rs.50,87,89,611.00/- as additional fixed capital investment made by the petitioner and provided tax exemption/rebate amounting to Rs.76,31,84,417.00 to the petitioner.

On 3.5.2008, the Joint Commissioner (Executive), Commercial Taxes, Nazibabad, Bijnore issued a notice to the petitioner under Section 10-B of the U.P. Trade Tax Act, revising the order dated 30.6.2004 passed by the Deputy Commissioner (Assessment) Trade Tax, Nazibabad, Bijnore. In response to the said notice, the petitioner submitted his reply on 3.5.2008. The Joint Commissioner (Executive), Commercial Taxes, Nazibabad, Bijnore, after considering the matter, has passed an order dated 29.5.2008, excluding the amount of additional fixed capital investment as included by the Deputy Commissioner (Assessment) Trade Tax, Nazibabad vide order dated 30.6.2004 to the eligibility certificate, on the ground that the Divisional Level Committee could not direct him to include this amount and as such, Deputy Commissioner (Assessment), Trade Tax, Nazibabad had no power to include the amount of additional fixed capital investment and accordingly calculated the total monetary limit.

Feeling aggrieved by the order dated 29.5.2008, the petitioner preferred a writ petition, bearing No. 1265 of 2008, before this Court at Allahabad, which, vide interim order dated 4.7.2008, stayed the order dated 29.5.2008 passed by the Joint Commissioner (Executive), Commercial Taxes, Nizibabad, Bijnore. A notice dated 2.8.2007 was issued by the Additional Commissioner, Commercial Taxes, Moradabad to the petitioner requiring him to show cause as to why the entire Eligibility Certificate granted to the petitioner be not cancelled in view of the effect of the notification Nos. 1340 and 1341 by which cold drinks had been placed in negative list. Upon receipt of the said notice dated 2.8.2007, the petitioner filed an interim reply to the same on 29.8.2007 and personally appeared before the Additional Commissioner on 29.9.2007 to make additional submissions. It is alleged that the petitioner did not hear anything from the Additional Commissioner and as such, it was believed that its explanation as contained in the reply submitted to the Additional Commissioner and during the course of personal hearing was found to be satisfactory by the Additional Commissioner.

On 1.1.2008, the U.P. Value Added Tax Act was enforced in the State of U.P. by replacing U.P. Trade Tax Act, meaning thereby the U.P. Trade Tax Act continued upon 31.12.2007. According to Section 42 of the U.P. Value Added Tax Act, as amended in July, 2008 with retrospective effect from 1.1.2008, the petitioner was required to deposit monthly trade tax along with the return and then claim refund of the said amount from the respondents after obtaining a certificate of entitlement for the unutilized amount as on 1.1.2008 from the Commissioner. Accordingly, an application under Section 41 of the U.P. Value Added Tax was preferred before the Commissioner, Commercial Taxes, U.P., on 20.8.2008, seeking certificate of entitlement but instead of issuing certificate of entitlement under Section 42 of the U.P. Value Added Tax Act, the Commissioner, Commercial Taxes on 21.11.2008, initiated the impugned proceedings under Section 4 (A) (3), requiring the petitioner to show cause as to why the entire eligibility certificate granted earlier by the Divisional Level Committee to the petitioner be not cancelled on two grounds viz. (i) failure of Divisional Level Committee to consider the effect of the notification denying the benefit of exemption to Cold Drink units at the time it granted the Eligibility Certificate to the petitioner; (ii) the order dated 29.5.2008 passed by the Joint Commissioner, Commercial Taxes, Bijnore excluding the amount of additional fixed capital investment from the Eligibility Certificate granted to the petitioner.

Hence the instant writ petition.

Sri Bharat Ji Agarwal, Senior Advocate, appearing on behalf of the petitioner, while assailing the impugned notice dated 21.11.2008, has vehemently contended that out of the above two grounds mentioned in the impugned notice, the ground about the order under Section 10-B dated 29.5.2008 has ceased to exist in view of the order passed by the Trade Tax Tribunal, Moradabad dated 21.8.2009 setting aside the order passed under Section 10B and in Trade Tax Revision No. 1191 of 2009, this Court has issued a direction that the order of the Tribunal dated 21.8.2009 be given effect to the within one month.

So far the other ground regarding denial of benefit of exemption to the unit manufacturing cold drink is concerned, which was for the first time introduced on 1.7.1999 and again on 29.9.2009 by amending the notifications dated 31.3.1995 and 21.2.1997, Sri Agarwal has contended that the petitioner having acted upon the promise made by the State Government in its incentive notification and having invested more than Rs.100 Crores for establishing its new unit at Dasna, the petitioner is entitled for the benefit of exemption from tax for the period of 15 years and also to the extent of monetary limit of fixed capital investment made upto the date of starting of production as well as investment made within a period of five years from such date of starting production as provided under Clause 3 (a) and 3 (I) of the notification. Thus, the State Government is bound by the principle of promissory estoppel in as much as the petitioner established its new unit much before the coming into force of the notification, wherein the benefit of exemption from tax to the units engaged in manufacturing cold drinks has been denied.

Sri Agrawal submits that at the time when the initial investment at Dasna was being taken, it was clearly understood by the petitioner that in terms of the wording of para 3 (a) of the notification dated 21.2.1997, the petitioner would be entitled to the exemption from tax to the extent of 150% of the entire amount of fixed capital investment made by it in the plant. This amount would include not only the investment made by the petitioner upto the date of production but also the amount invested by the petitioner in the period of 5 years subsequent to the date of commencement of production. He submits that the intention behind such a provision in the notification dated 21.2.1997 to be a rational decision by the State Government to recognize business reality and attract new entrepreneurs in the State of U.P. inasmuch as it is now a matter of common knowledge that industrial units decide to make large scale investment in a unit in staggered manner. The investment so made was in phases, so that the plant may start production with the completion of Phase-I investment and investment in second phase is continued to meet the market demand to ensure commercial viability of entire fixed capital investment. In such cases, usually the revenue coming from investment made in Phase-I of the project is redeployed for making investment in Phase-II of the project. The entire project viability is integrally connected to the successful investment in all the phases. Though the fixed capital investment is conceived at the beginning but making investment in phases in a staggered matter is a business reality, which was very well recognized by the notification Nos. 640 and 641 dated 21.2.1997. In the instant case, the subsequent investment of approximately Rs.51 Crore made by the petitioner is not to be viewed in isolation from the initial investment made by the petitioner in the unit but has to be taken as integral part of the decision taken earlier to invest in the State of U.P. and is squarely covered by the provisions of para 3(a) of the notification dated 21.2.1997.

Elaborating his submission, Sri Agarwal has submitted that if the matter is considered in proper perspective, notifications dated 1.7.199 and 29.9.1999 are restricted to the entrepreneurs, who may decide to make fresh investment in the State of U.P., past the date of these notifications, in units manufacturing cold drinks and do not relate to entrepreneurs such as the petitioner who has already taken a decision by acting on the promise understood to it vide notification dated 21.2.1997 by the State Government and also commercial production of goods prior thereto.

In support of the above contentions, Sri Agarwal has relied upon the latest decision of Division Bench of this Court dated 29.3.2010 in writ petition No. 5861 of 2004 : Jaiprakash Associates Vs. State of U.P. and others and also following cases :

"1. Pournami Oil Mills Versus State of Kerala and another [(1987) 65 STC 1];

2.Moilal Padampat Sugar Mills Co. Ltd. Versus State of U.P. & Others [1979 (2) SCC 409];

3.Mahavir Vegetable Oils (P) Ltd. Versus State of Haryana and others [2006 (3) SCC 620];

4.MRF Ltd. Vs. Assistant Commissioner (Assessment) Sales Tax [2007 (5) SCC 447];

5.Southern Petrochemical Industries Co. Ltd. Vs. Electricity Inspector [2007 (5) SCC 447];

6.Pawan Alloys & Castings Pvt. 	Ltd.   	Versus 	UPSEB [1997 (7) 	SCC 	25];
 
7.Brindavan Beverages Ltd. Vs. Trade 	Tax 	Tribunal, [2001 UPTC 	362]
 

 
8.Pepsico India Holdings Pvt. Ltd. 	Versus 	State of Kerala & Ors. 	[2009- TIOL-70-SC- 	ST];
 

 
9.Pepsico India Holdings Ltd. Vs. 	State of 	U.P. and others [2005 	UPTC 591];
 

 
10.State of Bihar Vs. Kalyanpur 	Cement Ltd. 	[2010 (1) JT 225];
 

 
 	Sri Agarwal has further submitted that since the proceedings are absolutely without jurisdiction in view of the law laid down by the Apex Court in the case of Siemens Ltd. Versus State of Maharashtra  2007 (207) ELT 168 (SC) and the decision of this Court in the case of Lipton India Ltd. Versus State of U.P. and others  [writ petition No. 405 (MB) of 1994, decided on 20.11.2008, therefore, the proceedings under Section 4A (3) of the Act are liable to be quashed. 
 
	
 

Refuting the assertions of the petitioner, Sri H.P. Srivastava, learned Additional Chief Standing Counsel, has contended that the writ petition is not maintainable against the show cause notice in view of the law laid down by the Apex Court in the case of Lalji Haridas Vs. Income Tax Officer and another reported in 1961 (43) I.T.R. 387; State of U.P. & others Versus Anil Kumar Ramesh Chandra Glass Works reported in (2005) 11 SCC 451; M/s Ansal Papers, Sikandarabad Versus State of U.P. and others [2008 UPTC 21; Dwarikesh Sugar Industries Ltd. Vs. State of U.P. and another [2009 NTN (Vol.40) 90]; and United Bank of India Vs. Satyawati Tandon and others reported in 2010 (8) SCC 110.

As regard to the other pleas raised by the petitioner, Sri Srivastava has contended that Notification dated 21.2.1997 contained in Annexure No. 1 to the writ petition has provided certain facility for exemption or reduction in the rate of tax in additions to the conditions referred in Section 4-A of the U.P. Trade Tax Act. Condition No.3 (a) of the said notification dated 21.2.1997 provides that the Unit will have a fixed capital investment or Rupees Fifty Crore or more as the new unit or making an additional fixed capital investment of Rupees Fifty Crore or more in expansion, modernization, diversification or backward integration. The fixed capital investment which is made during the period of five years commencing from the first day of such investment in the case of expansion, modernization, diversification or backward integration, and from the date of starting production in the case of new units will be included in fixed capital investment for the purposes of this notification and also for the purpose of exemption from, or reduction in the rate of tax benefit.

Sri Srivastava has further submitted that Section 4-A (6) of the U.P. Trade Tax Act provides that where the State Government is of the opinion that the purposes for which the facility of exemption from or reduction in the rate of tax was granted under Section 4-A of the U.P. Trade Tax Act has been fulfilled or that the conditions of such facility is no longer in public interest or opposed to the public interest, it may, by notification, withdraw such facility granted to any industry, dealer or class of dealers. He submits that in view of Notification No. 2008 dated 29.9.1999 and Notification No. 2009 dated 29.9.1999, the petitioner, who had filed an application under Section 4-A of the Act for exemption on 26.4.1999 could not have been granted the eligibility certificate vide order dated 22.1.2001 by the Divisional Level Committee to the petitioner for a period of fifteen years w.e.f. 24.3.1999 to 23.3.2014 or to the production of articles 'non-alcoholic Beverages Waters including mineral waters and aerated waters containing added sugar and other sweating matter of flavoured and mineral waters and aerated waters only' as prior to 29.9.1999. The petitioner's application for exemption under Section 4-A of the Act had not been considered by the Divisional Level Committee and on the date of grant of eligibility certificate, the cold drinks had already been placed under prohibitory list, and the principle of promissory estoppel is not applicable in the matter of the petitioner in view of the decisions of the Apex Court in S.B. International Ltd. and others Vs. Assistant Director General of Foreign Trade and others [(1996) 2 SCC 439] and M/s P.R. Fuels Pvt. Ltd. Varanasi Vs. Commissioner of Trade Tax U.P. [2010 U.P.T.C. 105].

Sri Srivastava has contended that while issuing the eligibility certificate to the petitioner's unit on 22.1.2001 under Section 4-A of the Act, the intent and purpose of the said Notification Nos. 2008/2009 dated 29.9.1999 had not been considered by the Divisional Level Committee, though the Divisional Level Committee discussed the Notification Nos. 1340 and 1341 dated 1.7.1999, which are not related to the units, who applied for exemption in response to the Notification dated 21.2.1997. In the instant case, the petitioner has relied upon the Notification No. 1340/1341 dated 1.7.1999, which are not related in the present case. More so, the aforesaid Notification Nos. 1340/1341 dated 1.7.1999 do not refer to the Notification Nos. 640 and 641 dated 21.2.1997, however, those refer to the Notification Nos. 31.3.1995, as amended from time to time, and in the said notifications, in Annexure-II, after Entry 13 the "Entry 14" have been inserted. In the instant matter, the petitioner was asking exemption in view of the Notification Nos. 640 and 641 dated 21.2.1997 during the tenure of consideration of the matter, the Notification Nos. 2008 and 2009 dated 29.9.1999 were issued in partial modification of aforesaid Notification Nos. 640 and 641 dated 21.2.1997.

Sri Srivastava has further contended that after the end of five years, the Deputy Commissioner (Assessment) Trade Tax, Nazibabad vide order dated 30.6.2004 included an amount of Rs.50,87,89,611.00 as additional fixed capital investment made by the petitioner, and provided tax exemption/rebate amounting to Rs.76,31,84,417.00 to the petitioner. It is submitted that said tax exemption/rebate amounting to Rs.76,31,84,417.00 to the petitioner was based on the order dated 30.6.2004 passed by the Assessing Authority. He further contended that the Assessing Authority/Deputy Commissioner (Assessment) Trade Tax, Nazibabad was/is not the competent authority to issue the eligibility certificate. He submits that as per the provision of Section 4-A of the Act, the authority concerned is also not empowered to amend the eligibility certificate already issued.

Sri Srivastava has further contended that on 3.5.2008, the Joint Commissioner (Executive) Commercial Taxes, Nazibabad issued a notice to the petitioner under Section 10-B of the Act, revising the order dated 30.6.2004 passed by the Deputy Commissioner (Assessment) Trade Tax, Nazibabad, to which the petitioner had submitted its reply. Thereafter, the Joint Commissioner has passed the order dated 29.5.2008, whereby Joint Commissioner excluded the amount of additional fixed capital investment as included by the Deputy Commissioner (Assessment) Trade Tax, Nazibabad vide order dated 30.6.2004 to the eligibility certificate on the ground that the Divisional Level Committee could not direct him to include this amount, therefore, the Deputy Commissioner (Assessment) Trade Tax, Nazibabad had no power to include the amount of additional fixed capital investment and accordingly calculated the total monetary limit. Feeling aggrieved by the order dated 29.5.2008, the petitioner preferred writ petition No. 1265 of 2008 before this Court at Allahabad, wherein in paras 23, 24 and 25, the petitioner admitted the directions mentioned under Section 4-A (3) of the Act by the Commissioner, Trade Tax, U.P., Lucknow. However, this Court, vide order dated 4.7.2008, stayed the order dated 29.5.2008. After lapse of some time, the petitioner withdrew the aforesaid writ petition No. 1265 of 2008 on 13.11.2009 without disclosing any cogent reason. In the meantime, during the pendency of the aforesaid writ petition No. 1265 of 2008, the petitioner has also preferred Appeal No. 002 of 2009 before the Trade Tax Tribunal, Moradabad against the order dated 29.5.2008 passed by the Joint Commissioner, without disclosing about pendency of the writ petition No. 1265 of 2008.

Sri Srivastava has, thus, submitted that two simultaneous proceedings can not go on in two different forums, but the petitioner not feeling confident about the success of the writ petition No. 1265 of 2008 after filing of the counter affidavit filed the aforesaid appeal No. 002/2009 before the Trade Tax Tribunal, Mordabad against the order dated 29.5.2008 passed by the Joint Commissioner (Executive), Commercial Taxes, Nazibabad, Bijnore under Section 10-B of the Act and after obtaining the order dated 21.8.2009 from the Tribunal through which the Tribunal partly set-aside the order dated 29.5.2008 passed by the Joint Commissioner under Section 10-B of the Act, the petitioner withdrew the writ petition No. 1265 of 2008 thereby the petitioner abused the process of law.

Sri Srivastava has further submitted that neither Section 14-A of the Act nor Rule 25 of the Act contemplate the delegation of power to the Assessing Authority, therefore, neither the Divisional Level Committee could have directed the assessing authority to include the additional fixed capital investment between 24.3.1999 to 18.2.2004 in the eligibility certificate nor the assessing authority i.e. Deputy Commissioner (Assessment), Commercial Taxes, Nazibabad, Bijnore could have granted exemption. Under Rule 25 of the U.P. Trade Tax Rules, for claiming the benefits of exemption in respect of the additional fixed capital investment an application has to be moved before the Divisional Level Committee, which has to be considered by the Divisional Level Committee in terms of the relevant notification and grant the same, if the conditions are fulfilled.

We have heard heard learned Counsel for the parties and perused the records.

First we would like to deal the question regarding maintainability of the writ petition, which has been filed against the show cause notice. There are plenty of decisions in which the Apex Court has reiterated that the writ jurisdiction under Article 226 of the Constitution of India should not be exercised in the matters where the petitions are filed against the show cause notice as the person to whom the show cause notice is issued has ample opportunity to raise the plea before the authority, which has issued the show cause notice.

In State of U.P. and another Versus Anil Kumar Ramesh Chandra Glass Works and another; 2005 (11) SCC 451, the Apex Court reiterated its earlier principle that Article 226 should not be permitted to be invoked in order to challenge show cause notices unless accepting the facts in the show cause notices to be correct, either no offences is disclosed or the show cause notice are ex facie without jurisdiction.

The question of maintainability came up for consideration before the Constitution Bench of the Apex Court in the case of Lalji Haridas Versus R.H. Bhatt and another; 1965 (55) I.T.R. 415, wherein the Apex Court has held that the jurisdiction conferred on the High Court under Article 226 is not intended to supersede the jurisdiction and authority of the Income Tax Officers to deal with the merits of all the contentions that the assessee may raise before them and so it would be entirely inappropriate to permit an assessee to move the High Court under Article 226 and contend that a notice issued against him is barred by time. That is a matter which the Income Tax Authorities must consider on the merits in the light of the relevant evidence.

In Titaghur Paper Mills Co. Ltd. Versus State of Orissa; 1983 (2) SCC 433, the Apex Court considered the question whether a petition under Article 226 of the Constitution should be entertained in a matter involving challenge to the order of the assessment passed by the competent authority under the Central Sales Tax Act, 1956 and corresponding law enacted by the State Legislature and answered the same in the negative by making the following observations :

"11. Under the scheme of the Act, there is a hierarchy of authorities before which the petitioners can get adequate redress against the wrongful acts complained of. The petitioners have the right to prefer an appeal before the Prescribed Authority under sub-section (1) of Section 23 of the Act. If the petitioners are dissatisfied with the decision in the appeal, they can prefer a further appeal to the Tribunal under sub-section (3) of Section 23 of the Act, and then ask for a case to be stated upon a question of law for the opinion of the High Court under Section 24 of the Act. The Act provides for a complete machinery to challenge an order of assessment, and the impugned orders of assessment can only be challenged by the mode prescribed by the Act and not by a petition under Article 226 of the Constitution. It is now well recognised that where a right or liability is created by a statute which gives a special remedy for enforcing it, the remedy provided by that statute only must be availed of. This rule was stated with great clarity by Willes, J. in Wolverhampton New Waterworks Co. v. Hawkesford; (1859) 6 CBNS 336 in the following passage: (ER p.495)

There are three classes of cases in which a liability may be established founded upon statute. . . . But there is a third class, viz. where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for enforcing it. . .the remedy provided by the statute must be followed, and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to.

The rule laid down in this passage was approved by the House of Lords in Neville v. London Express Newspapers Ltd. 1919 AC 368 and has been reaffirmed by the Privy Council in Attorney-General of Trinidad and Tobago v. Gordon Grant & Co. Ltd.; 1235 AC 532 (PC) and Secretary of State v. Mask & Co.; (1939-40) 67 IA 222. It has also been held to be equally applicable to enforcement of rights, and has been followed by this Court throughout. The High Court was therefore justified in dismissing the writ petitions in limine."

The above views expressed in Titaghur Paper Mills (supra) were echoed in Assistant Collector of Central Excise, Chandan Nagar, West Bengal V. Dunlop India Ltd. and others; (1985) 1 SCC 260 in the following words by the Apex Court:

"3.........Article 226 is not meant to short-circuit or circumvent statutory procedures. It is only where statutory remedies are entirely ill- suited to meet the demands of extraordinary situations, as for instance where the very vires of the statute is in question or where private or public wrongs are so inextricably mixed up and the prevention of public injury and the vindication of public justice require it that recourse may be had to Article 226 of the Constitution. But then the Court must have good and sufficient reason to bypass the alternative remedy provided by statute. Surely matters involving the revenue where statutory remedies are available are not such matters. We can also take judicial notice of the fact that the vast majority of the petitions under Article 226 of the Constitution are filed solely for the purpose of obtaining interim orders and thereafter prolong the proceedings by one device or the other. The practice certainly needs to be strongly discouraged."

In Raj Kumar Shivhare V. Directorate of Enforcement and another; (2010) 4 SCC 772, the Apex Court was dealing with the issue whether the alternative statutory remedy available under the Foreign Exchange Management Act, 1999 can be bypassed and jurisdiction under Article 226 of the Constitution could be invoked. After examining the scheme of the Act, the Court observed:

"31. When a statutory forum is created by law for redressal of grievance and that too in a fiscal statute, a writ petition should not be entertained ignoring the statutory dispensation. In this case the High Court is a statutory forum of appeal on a question of law. That should not be abdicated and given a go-by by a litigant for invoking the forum of judicial review of the High Court under writ jurisdiction. The High Court, with great respect, fell into a manifest error by not appreciating this aspect of the matter. It has however dismissed the writ petition on the ground of lack of territorial jurisdiction.

32. No reason could be assigned by the appellant's counsel to demonstrate why the appellate jurisdiction of the High Court under Section 35 of FEMA does not provide an efficacious remedy. In fact there could hardly be any reason since the High Court itself is the appellate forum."

In United Bank of India V. Satyawati Tondon and others; 2010 (8) SCC 110, the Apex Court in para 43 has observed as under :

"43. Unfortunately, the High Court overlooked the settled law that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person and that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. In our view, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc., the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi judicial bodies for redressal of the grievance of any aggrieved person. Therefore, in all such cases, High Court must insist that before availing remedy under Article 226 of the Constitution, a person must exhaust the remedies available under the relevant statute." (emphasis supplied by us)

From the above propositions of law, it is crystal clear that the writ jurisdiction under Article 226 of the Constitution of India should not be exercised in the matters where the petitions are filed against the show cause notice as the person to whom the show cause notice is issued having ample opportunity to address his grievance by submitting his reply to the show cause notice before the authority concerned. In the instant writ petition, impugned show cause notice was issued to the petitioner, requiring him to file his reply but instead of filing the reply to the show cause notice, the petitioner has preferred the instant writ petition, which is not maintainable in the eye of law insofar as the petitioner has got an alternative remedy to file his reply to the show cause notice and this writ petition is liable to be dismissed on this ground alone and the case laws relied upon by the petitioner are of no avail to him.

Even otherwise, from the perusal of the records, one more aspect of the matter comes into fore touching the conduct of the petitioner. It needs no emphasis to notice that inspite of the fact that the Assessing Authority/Deputy Commissioner (Assessment) Trade Tax, Nazibababd was/is not the competent authority to issue the eligibility certificate under the provisions of 4-A of the U.P. Trade Tax Act, 1948 and further the said authority has no power to amend the eligibility certificate but even then, the Divisional Level Committee had issued the eligibility certificate to the petitioner's unit on 22.1.2001 under Section 4-a of the U.P. Trade Tax Act in utter violation of the Notification No. 2008/2009 dated 29.9.1999. There is no dispute in the fact that on the date of grant of eligibility certificate by the Divisional Level Committee, the Cold Drinks were already placed in the negative list and this very vital fact was not taken into consideration. On coming to the notice of the said facts, the Joint Commissioner (Executive), Commercial Taxes, Nazibabad issued a notice dated 3.5.2008 to the petitioner under Section 10-B of the Act and revised the order dated 30.6.2004 passed by the Deputy Commissioner (Assessment) Trade Tax, to which the petitioner has submitted his reply. Thereafter, an order dated 29.5.2008 was passed by the Joint Commissioner (Executive), Commercial Taxes, excluding the amount of additional fixed capital investment as included by the Deputy Commissioner (Assessment), Trade Tax vide order dated 30.6.2004 to the eligibility certificate. Being aggrieved by the order dated 29.5.2008, the petitioner approached this Court at Allahabad by filing Civil Misc. Writ Petition No. 1265 of 2008, in which, a Division Bench of this Court at Allahabad, vide ad interim order dated 4.7.2008, stayed the order dated 29.5.2008. Counter affidavit was filed on behalf of the State in the above writ petition and the petitioner withdrew the writ petition on 13.11.2009. The petitioner, thereafter, preferred an Appeal, bearing No. 002/2009 before the Trade Tax Tribunal, Moradabad against the order dated 29.5.2008, without disclosing about filing and the pendency of writ petition No. 1265 of 2008. Thereafter, the petitioner has preferred the instant writ petition, challenging the power of Commissioner to cancel the Eligibility Certificate, while in paragraph 25 of the writ petition No. 1265 of 2008 filed by the petitioner before this Court at Allahabad, the petitioner itself had acknowledged the power of Commissioner to cancel/amend/modify the Eligibility Certificate under Section 4 A(3) of the U.P. Trade Tax Act.

The materials on record further reflects that vide order dated 21.8.2009, the Trade Tax Tribunal, Moradabad partly allowed the aforesaid Appeal No. 002/008 preferred by the petitioner and directed the Assessing Authority to submit his comments and recommendations through proper channel to the Divisional Level Committee for issuance of the amended Eligibility Certificate in favour of the petitioner. Being aggrieved by the order dated 21.8.2009, the petitioner preferred a Sales/Trade Tax Revision No. 1191 of 2009 before this Court at Allahabad and vide order dated 15.3.2010, this Court disposed of the aforesaid Trade Tax Revision with a direction that the order passed by the Tribunal may be complied with within a period of one month from the date of production of the certified copy of the order. In compliance of the order dated 15.3.2010 and 21.8.2009, the Assessing Authority submitted his comments and recommendations through proper channel, mentioning that while issuing the eligibility certificate to the petitioner's unit on 22.1.2001, Notification Nos. 2008 dated 29.9.1999 and 2009 dated 29.9.1999 were not considered and the petitioner is not entitled to the benefits of exemptions.

After hearing the parties' counsel, judgment was reserved. Prior to pronouncement of the order/opinion, the petitioner has preferred an application for stay (C.M.Application No. 107227 of 2012), inter alia on the grounds that the question involved in the instant writ petition is also related to the proceedings to the subsequent Assessment Year and the matter is pending before the Full Bench of Commercial Tax Tribunal, U.P. Accordingly, in order to meet the ends of justice and equity, this Court had stayed further proceedings in Second Appeal Nos. 11 of 2011 and 3 of 2010, till delivery of the judgment.

Thus, from the facts averred above, it is crystal clear that the petitioner has not disclosed the above material and full facts while filing the instant writ petition, though the same was already in the knowledge of the petitioner and has approached this Court with unclean hands. Therefore, we feel no hesitation to mention that the instant writ petition has been filed by the petitioner by suppressing and concealing the above vital facts, which go to the core of the matter involve. In Dalip Singh Versus State of Uttar Pradesh and others [(2010) 2 Supreme Court Cases 114], the Apex Court has criticized and deprecated such type of acts. The Courts come to shelter of those, who approach the Court with clean and pious mind disclosing all the relevant and necessary facts irrespective of the fate of the case.

In view of the foregoing discussion, without delving into other grounds of challenge, we decline to interfere with the show cause notice or grant indulgence to the petitioner in exercise of discretionary writ jurisdiction under Article 226 of the Constitution of India. However, in the facts and circumstances of the case, we leave it open to the petitioner to file its reply before the concerned authority raising all such points as may be available under law and if the petitioner approaches the concerned authority, it shall take appropriate decision in accordance with law.

The writ petition is, therefore, dismissed. Interim order stands discharged.

Dated : 17th April, 2013 [Vinay Kumar Mathur, J.] [Rajiv Sharma, J.]

Ajit/-