2015 (9) TMI 1454 - HC - VAT and Sales Tax

Reassessment - defect in the returns - petitioner submitted that the show cause notice came to be issued without pointing out any discrepancies but simply extracting the report forwarded by the enforcement wing officials. - In reply the petitioner filed detailed objections on 13.07.2015 meeting out each and every aspect of the irregularities pointed out in the show cause notice and also sought for perusal of all the books of accounts as required by the officials. Without considering the same and without affording an opportunity of hearing to the petitioner the impugned orders came to be passed. Hence the petitioner is before this Court seeking for the relief as stated above. - Held that - Court is inclined to set aside the impugned assessment orders and remit the matter to the assessing authority. - Accordingly the impugned assessment orders are set aside and the matter is remitted to the assessing authority for fresh consideration.

Summary

Issues:
1. Assessment proceedings conducted without affording due opportunity of hearing.
2. Failure of the assessing authority to consider objections and provide a reasonable opportunity of hearing.
3. Non-application of mind by the assessing authority in passing assessment orders.
4. Violation of provisions of the Act mandating reasonable opportunity of hearing to the assessee.

Analysis:
Issue 1:
The petitioner, a partnership firm engaged in Civil Construction Works, challenged the assessment orders for the assessment years 2007-08 to 2014-15, claiming that they were completed as deemed assessments without affording an opportunity of hearing. The petitioner contended that the show cause notice was issued without pointing out discrepancies, and objections were filed addressing the irregularities. However, the assessing authority proceeded to pass the orders without considering the objections or providing a hearing, which the petitioner argued was against the law.

Issue 2:
The petitioner argued that the assessment proceedings, being summary in nature, required the production of accounts and relevant records for verification, which the assessing authority failed to request. Despite the petitioner offering to produce the necessary books and details, the authority did not consider the submissions and passed the assessment orders without due consideration. The court noted that the objections were not taken into account, and the methodology adopted by the assessing authority was found to be contrary to the provisions of the Act, emphasizing the necessity of providing a reasonable opportunity of hearing to the assessee.

Issue 3:
The court observed that the assessing authority had acknowledged the objections filed by the petitioner but failed to consider them in passing the assessment orders. It was highlighted that the authority did not apply its mind properly, as evidenced by summarily dismissing the objections without proper evaluation. The court found the manner in which the impugned order was passed to be in violation of the Act's requirement to afford a reasonable opportunity of hearing to the assessee before finalizing the assessment.

Issue 4:
In conclusion, the court set aside the impugned assessment orders and remitted the matter to the assessing authority for fresh consideration. The petitioner was directed to produce the account books and file detailed additional objections within a specified timeframe. The assessing authority was instructed to review the objections, consider the documentary evidence provided, and pass appropriate orders after affording a proper opportunity of being heard to the petitioner, ensuring compliance with the Act's provisions regarding the assessment process.