2011 (8) TMI 1049 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Exercise of discretion u/s 32(5) of the Andhra Pradesh Value Added Tax Act, 2005.
2. Denial of personal hearing before passing the revised assessment order.

Summary:

1. Exercise of discretion u/s 32(5) of the Andhra Pradesh Value Added Tax Act, 2005:
The petitioner challenged the impugned order dated July 29, 2011, which revised the tax liability from Rs. 33,78,017 to Rs. 1,19,05,444 for the tax period 2008-09, under section 32(2) of the Andhra Pradesh Value Added Tax Act, 2005 ("the 2005 Act"). The petitioner argued that the first respondent failed to exercise the discretion to defer the revision u/s 32(5) of the 2005 Act, despite the pendency of a related legal issue before the High Court. The court clarified that the discretion to defer revisional proceedings u/s 32(5) is conferred solely on the Commissioner, as defined under section 2(8) and appointed under section 3A of the 2005 Act, and not on other authorities like the Additional Commissioner or Joint Commissioner. The court rejected the petitioner's contention that the power to defer should also be available to other authorized officers exercising revisional powers u/s 32(2).

2. Denial of personal hearing before passing the revised assessment order:
The petitioner repeatedly requested a personal hearing in its representations dated July 2, 2011, July 18, 2011, and July 25, 2011, to clarify objections against the proposed revision. The first respondent, however, did not afford a personal hearing and proceeded to pass the impugned revisional order. The court referred to the precedent set in S. Lalaiah & Co. v. Deputy Commissioner (CT), which held that an order enhancing the assessment cannot be passed without giving the assessee a reasonable opportunity of being heard. Given the significant increase in tax liability and the complexity of the issues involved, the court found no justification for denying a personal hearing. Consequently, the impugned revisional order dated July 29, 2011, was set aside.

Conclusion:
The writ petition was allowed, setting aside the impugned order. The first respondent or any other authorized revisional authority may pass a fresh order in accordance with the law. If the Commissioner revises the assessment, the petitioner may apply for the exercise of discretion u/s 32(5), which the Commissioner should consider appropriately. No order as to costs was made.