2011 (3) TMI 1522 - HC - VAT and Sales Tax

Summary

Issues: Challenge to assessment order under KVAT Act for assessment year 2007-08 without statutory appeal, violation of mandatory procedure under section 25(1) of KVAT Act, violation of principles of natural justice.

In this judgment, the assessment order finalized under section 25(1) of the Kerala Value Added Tax Act, 2003 (KVAT Act) for the assessment year 2007-08 is challenged without resorting to the remedy of statutory appeal. The petitioner argues that the assessing authority violated the mandatory procedure under section 25(1) of the KVAT Act and principles of natural justice. The petitioner contends that after submitting objections to the proposal notice, they were not given an opportunity of hearing, and the assessing authority unilaterally dismissed the objections without following the prescribed procedure.

Upon reviewing the impugned order, it is observed that the petitioner had submitted detailed objections to the proposal notice. However, the assessing authority did not reflect any consideration of those objections in the final assessment order. The petitioner's objections were summarily rejected without proper consideration, leading to a unilateral finalization of the assessment. The petitioner argues that the opportunity of hearing under section 25(1) is not a mere formality, and non-compliance with this procedure renders the assessment order invalid. Citing a previous court decision, the petitioner asserts that the assessment was done without due consideration of their contentions and without proper application of mind.

The court finds that the assessment was indeed finalized unilaterally without adequate consideration of the objections raised, and no opportunity of hearing was provided after receiving the objections. The Government Pleader representing the respondents fails to counter these factual circumstances. Consequently, the court deems the assessment order unsustainable in the eyes of the law. As a result, the writ petition is allowed, and the exhibit P3 assessment order is quashed. The first respondent is directed to reconsider the matter and finalize the assessment after giving the petitioner a proper opportunity of hearing. The petitioner is to be allowed to produce documents and books of accounts in support of their contentions. The fresh assessment orders are to be issued promptly, within a month from the date of receipt of the judgment copy.