2010 (6) TMI 677 - HC - VAT and Sales Tax

Whether a composite notice is enough to complete the escaped assessment of turnover under section 25(1) of the Kerala Value Added Tax Act, 2003 inviting objections, if any, and also mentioning about the right to be heard so as to satisfy the requirement under the first proviso to the said provision, is the point of dispute.

Summary

Issues:
1. Whether a "composite notice" is sufficient for completing the escaped assessment of turnover under section 25(1) of the Kerala Value Added Tax Act, 2003?
2. Whether the petitioner was denied the opportunity of being heard before the assessment under section 25(1) was completed?

Analysis:
1. The petitioner challenged the correctness of the order passed by the respondent under section 25(1) of the KVAT Act, claiming that a "composite notice" issued did not provide a proper opportunity for objections and hearing as required by law. The respondent argued that the notice provided the necessary information and opportunity for the petitioner to be heard. The court examined the sequence of events, including the issuance of notices and submissions by the parties, to determine whether the statutory requirement of providing a reasonable opportunity of being heard was met. The court emphasized the importance of a clear and specific notice of hearing to enable the party concerned to present their case effectively. It was concluded that the "composite notice" issued was not sufficient to fulfill the legal requirement of providing an opportunity of hearing as mandated by the statute.

2. The court analyzed the provisions of section 25(1) of the KVAT Act, which require that a dealer be given a reasonable opportunity of being heard before any assessment is made. The court noted that simply providing the opportunity to file objections within a specified period was not equivalent to granting an actual opportunity of being heard. The court highlighted the necessity of specifying the date, time, and place of the hearing in a clear manner to ensure the effective presentation of the party's case. It was emphasized that the purpose of the "proviso" regarding the right to be heard would be defeated if the opportunity provided was vague or ambiguous. Consequently, the court set aside the impugned order and directed the respondent to conduct a fresh assessment after providing a clear notice of hearing to the petitioner, ensuring compliance with the legal requirements within a specified timeframe.

In conclusion, the judgment addressed the issues related to the sufficiency of a "composite notice" for completing an assessment under the KVAT Act and the necessity of providing a proper opportunity of being heard to the concerned party. The court's decision emphasized the importance of clarity and specificity in the notice of hearing to enable effective participation and upheld the requirement of granting a reasonable opportunity of being heard before making any assessment under the relevant statutory provisions.