2012 (5) TMI 563 - HC - VAT and Sales Tax

Additional tax including surcharge and imposed - assessee challenged ante-dated order and it was passed without giving an opportunity of hearing to the assessee - Held that - In view of the statement made in counter, it is clear that no notice was ever issued to the assessee communicating the date of proceedings after May 21, 2005. Therefore, the impugned order dated January 21, 2007 was passed without affording opportunity of hearing to the assessee and has been passed without any knowledge of the assessee and hence, liable to set aside on this ground. Thus making an assessment in violation of principles of natural justice by purported order dated January 25, 2007, the assessment order deserves to be set aside and hence set aside. Consequently, the demand notice against the petitioner is also set aside. Appeal allowed.

Summary

Issues:
1. Assessment order challenged by petitioner for the year 2002-03 under Bihar Finance Act, 1981.
2. Allegation of an ante-dated assessment order without opportunity of hearing.
3. Discrepancies in the issuance and service of notices to the assessee.
4. Contention regarding the assessment order being ante-dated and violation of principles of natural justice.
5. Setting aside of the assessment order and demand notice.
6. Refund of any recovered amount along with statutory interest.
7. Permission sought by respondents to initiate fresh proceedings.

Analysis:
1. The petitioner contested the assessment order dated January 25, 2007, under the Bihar Finance Act, 1981, for the year 2002-03. The order imposed a substantial tax liability on the petitioner, including additional tax and surcharge, based on works contracts executed by sub-contractors and tax-paid sales. The petitioner alleged that the order was ante-dated and issued without granting an opportunity of hearing, which is a violation of natural justice principles.

2. The petitioner's counsel argued that the assessment order was ante-dated and highlighted discrepancies in the issuance of notices to the assessee. The petitioner, a Government of India undertaking, claimed that despite continuous representation before the assessing officer, no proper notices were served, and the assessment order was passed without the knowledge of the assessee. The petitioner relied on a previous judgment to support their case.

3. The respondent-Department admitted the lack of evidence regarding the issuance of notices to the assessee after a certain date. However, they contended that since the petitioner's representative regularly appeared before the authority, there was no requirement to serve additional notices. The respondent denied the allegation of an ante-dated order and argued against drawing such an inference.

4. The Court examined the submissions and reviewed the record, including order-sheets and demand notices. It was observed that the petitioner's representative had been appearing before the assessing officer, but there were lapses in scheduling and communication of proceedings. The Court found that the assessment order was indeed passed without affording the assessee an opportunity of hearing, leading to its invalidation.

5. Regarding the petitioner's claim of all order-sheets being ante-dated, the Court acknowledged the possibility given the circumstances surrounding the assessment order. Due to the violation of natural justice principles and discrepancies in the issuance of notices, the Court decided to set aside the assessment order and the demand notice against the petitioner.

6. Consequently, any amount recovered from the petitioner in line with the demand notice was ordered to be refunded, along with statutory interest. The Court emphasized the importance of upholding principles of natural justice in assessment proceedings and ensuring fair treatment of the parties involved.

7. The respondents sought permission to initiate fresh proceedings, which was granted by the Court. The judgment highlighted the significance of procedural fairness and adherence to legal requirements in tax assessment matters to safeguard the rights of the parties involved.