2009 (4) TMI 860 - HC - VAT and Sales Tax

Stay of collection of the disputed tax seeked - Held that - The mere fact that the revisional order was passed 3 years after the show-cause notice was issued is of little consequence. It is not even the case of the petitioner that the revisional order dated January 31, 2005 is barred by limitation. It is evident from the order of the Deputy Commissioner that the delay in passing the final order was due to numerous opportunities being given to the petitioner to produce his books of account. The petitioner, having failed to produce the books of account despite several opportunities being given to him, cannot now be heard to say that the revisional order should be dismissed for laches. No statutory provision prohibiting a successor-Deputy Commissioner from passing final orders of revision on the basis of a show-cause notice issued by his predecessor in office, has been brought to our notice. It is not even the case of the petitioner that either the Act or the Rules mandate a personal hearing being given to the dealer by the revisional authority. It is also not his case that he had sought for such an opportunity or that the Deputy Commissioner, who had issued the show-cause notice proposing to revise the assessment order passed by the Commercial Tax Officer, had heard him personally. It is well-settled that in cases where no request is made for personal hearing, the final order passed cannot be held to be vitiated on that account. Thus after taking into consideration the points raised, shall not be held to be invalid merely on the ground that no personal hearing had been afforded. Appeal dismissed.

Issues Involved:
1. Legality of the belated finalization of revision proceedings by a successor-Deputy Commissioner.
2. Application of Rule 6(3)(ii) of the Andhra Pradesh General Sales Tax Rules, 1957.
3. Requirement of oral hearing under principles of natural justice.
4. Validity of the exemption disallowed by the revisional authority.
5. Authority of a successor-Deputy Commissioner to pass orders based on a show-cause notice issued by a predecessor.
6. Alleged loss of books of account and its impact on the assessment.

Detailed Analysis:

1. Legality of the Belated Finalization of Revision Proceedings by a Successor-Deputy Commissioner:
The petitioner contended that the finalization of the revision proceedings by the successor-Deputy Commissioner, 3 1/2 years after the show-cause notice was issued by the predecessor-Deputy Commissioner, without an oral hearing, was illegal and violated the principles of natural justice. The court, however, found no statutory provision prohibiting a successor-Deputy Commissioner from passing final orders on a show-cause notice issued by his predecessor. The delay was attributed to numerous opportunities given to the petitioner to produce his books of account. The court held that the mere fact of delay is of little consequence and does not vitiate the revisional order.

2. Application of Rule 6(3)(ii) of the Andhra Pradesh General Sales Tax Rules, 1957:
The petitioner argued that Rule 6(3)(ii) was inapplicable as the accounts contained the elements of labor and material. The court noted that the Deputy Commissioner exercised the power of revision because the Commercial Tax Officer had allowed exemptions without verifying the books of account. Since the books of account were not produced for examination, Rule 6(3)(ii) was correctly applied. The Tribunal's decision to adopt Rule 6(3)(ii) was upheld as the petitioner failed to produce the books for verification.

3. Requirement of Oral Hearing Under Principles of Natural Justice:
The petitioner argued that the principles of natural justice required an oral hearing. The court emphasized that natural justice is flexible and its application depends on the facts and circumstances of each case. There is no statutory mandate for a personal hearing, and the opportunity to be heard can be by written representation. The court found that the petitioner was given ample opportunity to present his case through written objections, and thus, no violation of natural justice occurred.

4. Validity of the Exemption Disallowed by the Revisional Authority:
The petitioner challenged the disallowance of exemptions by the revisional authority. The court observed that the Commercial Tax Officer had allowed exemptions without verifying the books of account or corroborative evidence. The Tribunal found that the exemptions were granted based on information from the Executive Engineer without proper verification. The court upheld the Tribunal's conclusion that the exemptions were incorrectly allowed and the revisional authority rightly disallowed them.

5. Authority of a Successor-Deputy Commissioner to Pass Orders Based on a Show-Cause Notice Issued by a Predecessor:
The petitioner contended that the successor-Deputy Commissioner could not pass a revision order based on a show-cause notice issued by his predecessor. The court rejected this argument, noting that no authority was shown that prohibited such action. The successor-Deputy Commissioner considered the objections and documents before passing the final order, which was not done mechanically or without application of mind.

6. Alleged Loss of Books of Account and Its Impact on the Assessment:
The petitioner claimed that the books of account were lost and this was intimated to the police and through a public advertisement. The court found inconsistencies in the petitioner's statements regarding the loss of books. The Tribunal noted that the petitioner failed to produce evidence supporting the loss of books. The court concluded that the plea of lost books was an afterthought and upheld the application of Rule 6(3)(ii) due to the non-production of books.

Conclusion:
The court dismissed TREVC Nos. 45 and 62 of 2009, finding no merit in the petitioner's contentions. Consequently, W.P. No. 7189 of 2009, seeking a stay of collection of the disputed tax, was also dismissed. The court emphasized that the principles of natural justice were not violated, and the revisional authority acted within its jurisdiction and discretion.

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