Case Law Details
Hardcastle Restaurants Pvt. Ltd. Vs Union of India (Bombay High Court)
The main contention of the Petitioner is of violation of the principles of natural justice. Petitioner contends that since the hearing was only by three members and the impugned order is by four members, it is in breach of principles of natural justice. The Petitioner was not afforded an opportunity to present its case before Mr. Amand Shah, the fourth signatory. The Petitioner further contends that the Rules provides that if the difference of opinion occurs, the opinion of the majority is to be considered and, if equality of votes occurs, the Chairman has the casting vote, which implies internal deliberation amongst the members. It is submitted that the impugned order, in as much as relates to Mr. Amand Shah, is passed based on hearsay, and therefore, deserves to be set aside in totality as it is not separable. The Petitioner contends that the proceedings are beyond the jurisdiction of the Authority since the complaints were filed regarding one product, a type of coffee, and could not have been extended all the goods and services of the Petitioners. According to the Petitioner that the Authority has taken such a view in case of other entities. It is contended that sufficient evidence was not available in respect of all the products taken up for scrutiny. The Petitioner further contends that no methodology is framed for determining profiteering and absence of any statutory guideline, the exercise carried out is entirely arbitrary. Thus the order suffers from arbitrariness, perversity and contradictions. The Petitioner further contends that various material facets such as loss of input tax credit during 1 November 2017 to 14 November 2017, incremental input tax credit loss due to branch transfer, input tax credit from 1 July 2017 to 14 November 2017 availed in the subsequent months and increase in the variable costs, were not been considered.
Breach of principles of natural justice are examined in the facts of the case. Certain basic positions of law however are settled. The rule that one who hears must pass the order remains as the basic proposition. In certain circumstances, this rule can be deviated from. None of the decisions relied upon by the Respondents fit the fact situation at hand to justify that deviation. We had adjourned the hearing to enable the Counsel for the Respondents to cite before us any decision where in identical facts courts have permitted the infraction of the basic rule. The Counsel for the Respondents has also fairly accepted that the decisions cited by him can be distinguished on facts, but sought to contend that these decisions lay down certain principles which we must follow. These, according to Respondents, are where an oral hearing is not contemplated; there is no prejudice; is a case of mere irregularity, the court should not interfere. These propositions cannot be accepted from the analysis of the statutory provision which we have undertaken earlier.
We conclude that when the three members of the Authority had heard the Petitioner and participated in the entire hearing, the collectively signed decision, when the fourth member joined only for signing the order has resulted in violation of the principles of natural justice and fairness, and is liable to be set aside.
FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT
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