2016 (1) TMI 1218 - HC - VAT and Sales Tax

Validity of assessment order - natural justice - Held that - the assessment order quashed on the ground that the respondent did not consider the documents presented by the petitioner - The respondents without issuing any notice to the petitioner has enhanced substantially the gross turnover. The amount enhanced in the gross turnover is at ₹ 1,05,36,86,782/. For such huge enhancement, SCN must have been given. It ought to have been kept in mind by the respondents authorities that typographical error of assessee cannot be encashed by the State respondents. At least, a notice ought to have been issued by the respondents giving opportunity to the petitioner to explain the error committed by the assessee, especially, when the assessee is wholly owned by the Central Government as a Central Government Undertaking/Public Sector Undertaking - the impugned order of assessment is in violation of principles of natural justice. Petition allowed - assessment to be redone - matter on remand.

Summary

Issues:
Challenge to assessment order for the year 2010-11 and consequential demand notice.

Analysis:
The petitioner challenged the assessment order for the year 2010-11 passed by the Assessing Officer, claiming that the respondents did not consider the additional documents provided by the petitioner. The petitioner argued that no notice was given before enhancing the gross turnover substantially. The respondents failed to point out any notice given to the petitioner before the assessment order was passed. The counsel for the respondents mentioned that an appeal was dismissed due to non-deposition of the required amount, but reassessment proceedings were initiated. The High Court considered the arguments from both sides and decided to quash and set aside the assessment order and the demand notice issued by the respondents.

The High Court found that the petitioner had supplied all necessary documents to the assessing officer for the assessment year 2010-11, including the gross turnover mentioned in the book of accounts. It was noted that the respondents substantially enhanced the gross turnover without issuing any notice to the petitioner. The Court highlighted the typographical error in one of the documents, emphasizing that such errors should not be used against the petitioner without providing an opportunity to explain. The assessment order was deemed to be in violation of principles of natural justice due to the lack of notice and consideration of the documents provided by the petitioner.

As a result of the above findings, the High Court quashed and set aside the assessment order, the consequential demand notice, and the appellate order. The Court directed the petitioner to cooperate in the reassessment proceedings initiated by the respondents, ensuring that the reassessment is conducted in accordance with the law and after providing a fair opportunity for the petitioner to be heard. The writ petition was allowed and disposed of in favor of the petitioner.