2006 (4) TMI 531 - HC - VAT and Sales Tax

Summary

Issues:
1. Service of notice upon the petitioner regarding proceedings dated 26.5.1999 before the Assessing Authority.
2. Violation of principles of natural justice due to non-service of notice.
3. Legality of orders passed by the Assessing Authority, First Appellate Authority, and Tribunal.

Analysis:
Issue 1: The primary issue in this case revolves around the service of notice upon the petitioner regarding the proceedings dated 26.5.1999 before the Assessing Authority. The Assessing Authority forwarded a notice dated 21.5.1999 through a process server, who reported that one of the partners of the petitioner firm refused to accept the notice. However, the petitioner contended that the notice was never tendered to the partner, who was ill during the relevant period. The First Appellate Authority rejected the objection raised by the petitioner, citing the absence of a medical certificate. The Court found that the statement made on oath by the partner regarding non-service of notice remained uncontroverted. As no material on record could disprove this statement, the Court accepted it as correct, leading to the conclusion that the service of notice was not valid.

Issue 2: Another aspect raised was the violation of principles of natural justice due to the non-service of the notice. The Court highlighted that the Assessing Authority failed to follow the mandatory procedure of sending a notice by registered post to the recorded address of the petitioner firm before proceeding ex parte. Citing legal precedent, the Court emphasized the necessity of adhering to such procedures. Consequently, the ex parte assessment proceedings were deemed to be non-compliant with the law, rendering the orders passed by the lower authorities illegal.

Issue 3: The final issue pertained to the legality of the orders passed by the Assessing Authority, First Appellate Authority, and Tribunal. The Court concluded that these orders were illegal and quashed them. The matter was remanded to the Assessing Authority for re-assessment in accordance with the order passed by the First Appellate Authority. The Court directed the Assessing Authority to conduct the re-assessment within four months from the date of filing a certified copy of the order, emphasizing the need for expeditious proceedings without unnecessary adjournments.

In summary, the judgment focused on the failure to serve a notice properly, leading to a violation of natural justice principles and subsequent illegality in the assessment proceedings. The Court intervened by quashing the orders and remanding the matter for re-assessment in compliance with the law.