FINAL ASSIGNMENT | TAX & REGULATION LITIGATION WORKSHOP

SUBMTTED BY: Nikhil Anand

I. At the stage of show cause notice, the Quasi-Judicial authority must act fairly and must
act with an open mind while initiating a show cause proceeding. The Quasi-Judicial
authority acting with an open mind means that the person proceeded against has been
given a reasonable opportunity of making his objection against the proposed charges in
the notice.

To show that the Quasi-Judicial authority while initiating a show-cause notice

have acted with open mind, It becomes pertinent to see a few things.

a. The person proceeded against must be told the charges against him so that he
can take his defence and prove his innocence.
b. At the stage of issuing charge-sheet, the authority cannot, instead of telling him
the charges, confront him with definite conclusion of his alleged guilt.
If these things are not maintained in the notice, the entire proceeding initiated by
the show-cause notice vitiated by the unfairness and bias.

It must be noted that the authority must have to act with utmost fairness, and that
fairness have to be conveyed through the language of the notice.

II. Although, in the case of show-cause notice, the writ court may not exercise its
discretionary jurisdiction in entertaining a writ petition questioning a notice to
show cause, only exception to this would be exercise of wrong or without having
jurisdiction.
However, if the show-cause issued with premeditation, a writ petition would be
maintainable.
The instant show cause notice by the Tax Department of U.P, the statuary
authority has already formed the opinion regarding 5% tax liability of the
Ballbearings India Pvt. Ltd.
 Therefore, I wouldn’t advise Ballbearings to file a writ petition on the grounds
mentioned by Mr. John. I would advise to file the writ petition, that the Tax
authority while issuing the show-cause notice has the element of premeditation, as
in the show cause notice the authority has already decided the 5% tax liability of
Ballbearings India Pvt. Ltd.

III. As per the principle of natural justice, the opportunity of being heard is provided
that the adjudicating authority can duly apply its mind. S. 23 of the Tobacco Act,
1995, provides the opportunity of being heard but not of personal hearing, in
addition the enactment empowers the adjudicating authority to penalize the person
with civil consequences.
As, in the case of Nirma, the supreme court reiterated the principle that
opportunity of being heard is said to be sufficient if the opportunity to submit
written explanation is given, and the regulation does not provide for oral hearings.
The only exception to this, that by not providing oral hearing, there would be
prejudice caused in the case.
In the instant case, the adjudicating authority has prejudice has been caused while
deciding the case, because (i) Even after clear mention of an opportunity to be
heard orally in the reply, the adjudicating authority went ahead with the
adjudication. (ii) and, the consequences arising of not being given opportunity of
oral hearing is much graver, even after an opportunity of submitting the personal
explanation is given in the present case.

IV. In the case VVF Ltd. vs. Union of India, the Supreme Court has correctly relied
on Kasinka Trading. In Kasinka Trading, the Court has said that when the
legislature entrusts the government with regulatory power for public interest and
in the furtherance of that power, the government, acting bonafide, is satisfied that
the “public interest” would be served only if the government regulate certain
sector, it has a free hand to do so.
Further, Motilal Padmapat case is not applicable to the said case in re to public
interest, because similar to Kasinka Trading, VVF LTD, also brings in the
question of “public interest” and the legislature intends that to be decided by the
Government and not the Judiciary.
 Therefore, it would be necessary for the person invoking the principle of
promissory estoppel, to show through its submission that there have been a case of
unjustness against him and there is no public interest behind the impugned
regulation. Therefore, the burden of proof to show that there is no public interest
is on the person invoking the principle of promissory estoppel than that of
government as mentioned in Motilal case.

VII. Mr. Bear’s friend is right in saying that as per the evidentiary principle
encompassed in S. 24 of Evidence Act. Mr. Bear is well within his right to retract
the confession, if there is an element of coercion while making confessional
statement.
But, Mr. Bear’s friend is wrong in saying that the retracted confession bears no
evidentiary value. The Court can rely upon the retracted confession if the veracity
of retracted confession is substantially corroborated by other independent and
cogent evidence.

VIII. The different rules of interpretation that can be applied in interpreting the
mentioned S. 42 & 51 of Covid-19 Act, 2020.

(a) The principle of literal interpretation, where the language of a statute is plain
and clear, the court ought not words to limit or alter the meaning of the statute.
(b) The Purposive interpretation, i.e. the main purpose of the penal provision can’t
be lost sight of and ignored.
(c) Doctrine of Proportionality, i.e. in the penal provisions there can be no
extreme punishments, the penalty should always in proportion of the offending
Act.
There should be different test while applying the rule of interpretation to the
different provisions of similar nature because even after being similar in nature,
the provisions have different ulterior motive. In relation to S. 42, the court should
liberally interpret and cure the manifest arbitrariness, as in no way it can be
analyzed as to whether the movement of vehicle have violated the provision. In
relation to S. 51, the Court should strictly interpret, as the purpose of this
provision is to maintain the social distancing norms in midst of corona pandemic
in the country.
X. Whether the Tribunal erred in imposing a fresh fine which was neither demanded
in the Show Cause Notice nor contained in the original order?
The mentioned question raises a substantial question of law in an appeal to the
High Court because it is evident from the facts mentioned that the Tribunal wasn’t
adjudicating as to whether the GST registration should be cancelled in re to the
non-maintenance of Input Register properly, and the Tribunal decision adversely
impacted the TPL as it wasn’t given adequate opportunity to present its case in re
cancellation of GST license for failure to accurately maintain the records.
Did the tribunal exceeded its jurisdiction by deciding on the issue that wasn’t
raised by any of the party?