G.M.A. Industrial and Trading Company, Mangalore vs State of Karnataka

Deepak Verma, J.-Smt. Vani H., Counsel for the petitioner.

After having heard the learned Counsel for the petitioner, we thought it fit that the matter can be heard and disposed of at the admission stage itself. With that view, we requested the Government Advocate Sri Gangadhar Sangolli, to take notice. He was kind enough to take notice. He has accordingly appeared before us. With consent, arguments heard on merits.

The petitioner herein had filed STA No. 750 of 1998 before the Karnataka Appellate Tribunal at Bangalore, challenging the order passed by the Joint Commissioner of Commercial Taxes (Appeals), Bangalore, whereby the appeal preferred by the petitioner was dismissed. It was initially fixed before the Tribunal on 20-6-2007, for which notice was issued to the petitioner. The petitioner appeared along with its Advocate on the said day but, it was adjourned to 28-6-2007. However, the matter could not be taken up for hearing on the said date. In the meanwhile, one of the members of the Tribunal retired. Consequently, for want of bench, the matter could not be heard, even though learned Counsel for the petitioner was keeping track of the dates of hearing given to him. According to petitioner, it was taken up for hearing, without any notice to it on 27-11-2007. As soon as the petitioner came to know that the matter has been taken up in its absence on the aforesaid date, the petitioner applied for affording an opportunity of hearing to it, on the very next day. Unfortunately, the Tribunal was of the opinion that the matter cannot be reopened for hearing, as it has already been closed for passing of the final order. Thus, the matter was heard without any arguments, having been advanced on the part of the petitioner. Thereafter, the impugned order came to be passed on 6-12-2007.

Feeling aggrieved by the order by which the petitioner''s application for rehearing of the matter was rejected, it was constrained to file a W.P. No. 20048 of 2007 (T-CST) in the High Court, which came up for consideration before learned Single Judge on 18-12-2007. On the said date after arguing for a while, learned Counsel for the petitioner sought permission to withdraw the writ petition, with liberty to agitate the matter in accordance with the statutory provisions of the Karnataka Sales Tax Act, 1957. This is how this revision petition has been filed before us under Section 23(1) of the Karnataka Sales Tax Act, 1957.

Learned Counsel for the petitioner contended that the petitioner has been denied right of hearing, even though it had been contesting the matter in right earnest from the very beginning. It was also contended that principles of natural justice require that the petitioner should have been given an opportunity of hearing. Lastly, it was contended that the judgment of the Supreme Court on which reliance has been placed by the Tribunal, while dismissing the appeal, has since been overruled by subsequent judgment of the Constitution Bench of the Supreme Court in Sunrise Associates v Government of NCT of Delhi and Others, 2006(61) Kar. L.J. 8 (SC). Therefore, the impugned order cannot be sustained, even on merits.

However, we are of the opinion that this could have been appreciated in a better way by the Tribunal, if it had been brought to its notice, but unfortunately in the absence of the learned Counsel for the petitioner, the same could not be done. Nevertheless, we are also of the considered opinion that looking to the manner in which the matter was being prosecuted on earlier dates of hearing till 27-11-2007, petitioner should have been afforded and granted one more opportunity, so as to put up its case before it, with all vehemence. Even though the Counsel for the petitioner acted in promptitude by making an application for giving an opportunity of hearing before the Tribunal, the very next day but unfortunately, the same also came to be rejected. Looking to the sequence of events as mentioned hereinabove, we are of the opinion that the petitioner did deserve at least an opportunity of hearing, before the impugned order came to be passed. Fair-play and principles of natural justice require that both the parties should be given not only an adequate but proper opportunity of hearing, so as to put forth their respective contentions. This is the requirement of law and we would like to strictly adhere to the same.

In the light of the aforesaid, we are of the considered opinion that the impugned order passed by the Tribunal on 6-12-2007 cannot be sustained in law. The same is hereby set aside and quashed. The matter is remanded to the Tribunal for fresh hearing, after giving an opportunity of hearing to both sides. Both the parties agree that they would appear before the Tribunal on 3-3-2008, meaning thereby that no notice would be issued to either of the parties. However, we may clarify that since matter is being remanded to the Tribunal for fresh hearing, we have not touched the merits of the case. Parties would be at liberty to agitate on all questions projected before the Tribunal.