Court: Supreme Court of India

Citation: Civil Appeal Nos. 2859–2861 of 2022 (Arising out of SLP (C) Nos. 3384–3386 of 2017)

Date: March 30, 2022

Bench: Justices Dinesh Maheshwari and Vikram Nath

Parties:

• Appellant: Chandra Prakash Mishra, Joint Commissioner, Commercial Tax, Moradabad

• Respondent: Flipkart India Pvt. Ltd.

Background:

Chandra Prakash Mishra, while serving as Deputy Commissioner, Commercial Tax,

Noida, passed ex parte assessment orders and initiated recovery proceedings under the Uttar Pradesh Value Added Tax Act, 2008 (2005) (UP VAT Act) against Flipkart India Pvt. Ltd. These actions were challenged by Flipkart in the Allahabad High Court.

• Parties section says: “Appellant: Chandra Prakash Mishra, Joint Commissioner, Commercial Tax, Moradabad”

• Background says: “while serving as Deputy Commissioner, Commercial Tax, Noida…”

✅ Correction: Ensure consistent designation. If he was Deputy Commissioner during the incident and later promoted to Joint Commissioner, clarify this transition:

"Chandra Prakash Mishra, who was then serving as Deputy Commissioner, Commercial Tax, Noida, and later Joint Commissioner, Commercial Tax, Moradabad..."

The High Court found that the service of notices to Flipkart was inadequate, leading to the ex parte assessment orders being set aside. Additionally, the court observed that the actions of the tax authorities were in gross violation of the provisions of the Act and imposed costs of ₹2,00,000 on the department. The court also directed an inquiry into the conduct of the officers involved.

Supreme Court's Judgment:

The Supreme Court, after granting leave to appeal, examined the High Court's judgment. The Court annulled the adverse observations and directions against Chandra Prakash Mishra, emphasizing that procedural errors or mistakes do not inherently imply bad faith or malice. The Court acknowledged the shortcomings in the service of notices but differentiated them from deliberate misconduct. The Court restored the appellant's position and directed appropriate financial remedies.

Multiple Choice Questions (MCQs)

1. What was the primary legal issue in Chandra Prakash Mishra v. Flipkart India Pvt. Ltd.?

a) Violation of Article 14 of the Constitution

b) Improper service of notices under the UP VAT Act

c) Jurisdictional dispute between Noida and Ghaziabad authorities

d) Misuse of the 'latching on' feature by third-party sellers

Answer: b

2. Which provision of the UP VAT Act grants statutory protection to tax officers for actions done in good faith?

a) Section 75

b) Section 67

c) Section 40

d) Section 72

Answer: b Answers - d) Section 72

3. What was the amount of costs imposed by the High Court on the Commercial Tax Department?

a) ₹1,00,000

b) ₹2,00,000

c) ₹5,00,000

d) ₹10,00,000

Answer: b) ₹2,00,000

4. What did the Supreme Court emphasize regarding procedural errors by tax authorities?a) They automatically imply bad faith.

b) They are grounds for immediate dismissal of officers.

c) They do not inherently imply bad faith or malice.

d) They are irrelevant to the legal proceedings.

Answer: c) They do not inherently imply bad faith or malice.

5. Which principle was central to the Supreme Court's judgment in this case?

a) Doctrine of estoppel

b) Principle of natural justice

c) Doctrine of waiver

d) Principle of res judicata

Answer: b