2003 (11) TMI 572 - HC - VAT and Sales Tax

Summary

Issues involved: Violation of audi alteram partem rule in a case under the Central Sales Tax Act, 1956 due to non-service of a revised notice leading to assessment orders with significant penalties.

Analysis:

The High Court of MADRAS heard a writ appeal concerning a matter under the Central Sales Tax Act, 1956. The Court, led by Chief Justice Subhashan Reddy, emphasized the importance of the audi alteram partem rule. The appellant contended that a revised notice from November 13, 2002, was not served on him. Upon examination, it was found that the notice had not been served as claimed. While previous notices were served in person, the crucial notice was only affixed on the door of the business premises by an office assistant, contrary to the requirement of sending it by registered post with acknowledgment due (RPAD). The tax amount and penalty imposed were substantial, totaling Rs. 26,47,585.

The Court expressed strong disapproval of the flagrant violation of the audi alteram partem rule. In light of the circumstances, the writ appeal was allowed, annulling the assessment orders based on the flawed notice. The matter was remitted back to the first respondent for a fresh inquiry after providing the appellant with a proper opportunity to present his case. To expedite the process, the Special Government Pleader was instructed to provide a copy of the revised notice to the appellant's counsel present in court, dispensing with the need for personal service on the appellant. The appellant was granted 15 days to submit an explanation, following which the inquiry would be conducted, and subsequent actions taken in accordance with the law. No costs were awarded, and the appeal was closed.