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2010 (9) TMI 965 - HC - VAT and Sales Tax
Issues: Challenge to reassessment orders and demand notices based on violation of principles of natural justice.
In this case, the petitioner challenged the reassessment orders and demand notices issued by the third respondent. The petitioner's counsel argued that the notices requiring the petitioner to produce certain documents were served on a day when it was practically impossible to respond within the stipulated time frame due to consecutive holidays. The counsel contended that the third respondent should have waited until the expiry of the seventh day before passing the orders, as per principles of natural justice. The government pleader representing the respondents argued that the petitioner could rectify the situation by making a rectification application. The court held that the reassessment orders and demand notices were indeed in violation of the principles of natural justice due to the impractical time frame provided for response. The court emphasized the importance of fair play and reasonableness in such matters and quashed the impugned orders and notices. The court noted that the consecutive holidays falling within the seven-day period given to the petitioner to respond made it practically impossible for the petitioner to file objections within the stipulated time frame. The court emphasized that the third respondent should have waited until the expiry of the seventh day before passing the orders, even if no objections were received. The failure to do so was considered a violation of natural justice principles. As a remedy, the court directed the petitioner to file its reply/objections within two days, and the third respondent was instructed to consider the petitioner's submissions and pass appropriate orders. Importantly, the court clarified that its decision to quash the orders and notices did not imply any opinion on the petitioner's tax liability. Ultimately, the court allowed the petitions, quashed the impugned orders and notices, and made no order as to costs.
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