2011 (4) TMI 1265 - HC - VAT and Sales Tax

Whether no opportunity was granted to the petitioner before the impugned reassessment was made and the same could not have been made without considering that defects in the C forms have since been rectified? Held that - No justification to interfere with the impugned order of reassessment as it is the assessee who failed to effectively respond within reasonable time even after receipt of the show-cause notice where the defects in the C forms were specified. No justification to interfere with the impugned order of reassessment as it is the assessee who failed to effectively respond within reasonable time even after receipt of the show-cause notice where the defects in the C forms were specified. Against assessee.

Summary

Issues:
Assessment based on rejected C forms, validity of reassessment, opportunity granted to the assessee, maintainability of the writ petition.

Assessment based on rejected C forms:
The petitioner, a registered dealer under the AGST Act and CST Act, supplied life-saving drugs to distributors in northeastern states. The assessment for the year 2000-01 granted exemption benefits based on C forms submitted by registered dealers. However, a show-cause notice was issued later questioning the validity of six C forms due to irregularities. The petitioner responded belatedly, assuring to collect fresh C forms, but failed to do so. Subsequently, fresh assessment was made, rejecting the C forms and declaring the petitioner liable to pay tax under the AGST Act and CST Act.

Validity of reassessment:
The petitioner's counsel argued that the C forms should not have been rejected as the defects were rectified, and tax exemption should be allowed. The counsel contended that reassessment was improper without granting an opportunity to rectify the defects. Reference was made to a case where the High Court allowed rectification of defects in C forms before assessment completion. However, the court noted that the petitioner failed to rectify the defects despite receiving a show-cause notice specifying the issues with the C forms.

Opportunity granted to the assessee:
The court compared the present case with precedents where rectification of defects in C forms was allowed before assessment completion. In those cases, the assessing authority did not consider corrected C forms despite being tendered before assessment. Unlike those cases, the petitioner in this case failed to rectify the defects even after receiving a show-cause notice detailing the issues with the C forms. The court emphasized that the Revenue cannot be faulted for the assessee's lapses in responding to the notice within a reasonable time.

Maintainability of the writ petition:
The respondent contended that the writ petition was not maintainable as the petitioner should have approached the appellate authority before invoking the writ jurisdiction. The court agreed, stating that the petitioner had not exhausted the statutory remedy provided to an aggrieved assessee under the AGST Act. Therefore, the court found no justification to interfere with the reassessment order and dismissed the writ petition.

In conclusion, the court upheld the reassessment order, emphasizing that the petitioner failed to respond effectively within a reasonable time despite receiving a show-cause notice. The court also noted that the petitioner had not exhausted the alternate remedy provided under the AGST Act, leading to the dismissal of the writ petition.