2016 (8) TMI 1340 - HC - VAT and Sales Tax

Principles of natural justice - notices were not properly served upon petitioner and exparte orders were passed - Held that - here is a forced litigation by unmindful illegal act on the part of respondent 1 and realizing the same he has also withdrawn the impugned orders and also considered the fact he is an authority which was already adversely commenced by this Court in its order dated 29.02.2016 still he did not care to such observations. It is again a fit case where respondent 1 himself would be saddled with cost by this litigation. Since the impugned order of assessment have already been recalled by order dated 23.07.2016 in this regard no further order is required but we hold that respondent 1 being guilty of compelling and forcing second round of litigation upon petitioner must be saddled with cost which we quantify to ₹ 50,000/ - petition disposed off.

Summary

Issues:
1. Jurisdiction of the Assessing Authority to pass assessment orders.
2. Compliance with court directions regarding change of business address.
3. Validity of assessment orders passed despite earlier court judgment.
4. Apology and cost imposition on the Assessing Authority.

Issue 1: Jurisdiction of the Assessing Authority to pass assessment orders
The petitioner, an online agency engaged in marketing and selling consumer goods, filed a writ petition challenging assessment orders passed by the Assessing Authority. The court held that the Assessing Authority at Noida lacked jurisdiction to summon or serve notices outside his territorial jurisdiction. Despite the petitioner's request for a change of address, the Assessing Authority proceeded to make assessment orders and exerted pressure on the petitioner, which was deemed illegal. The court imposed a cost of Rs. Two Lacs on the Commercial Tax Department and directed for the refund of the amount already recovered.

Issue 2: Compliance with court directions regarding change of business address
The court emphasized that for a change of business address, a registered dealer must file an application under the relevant rules. The Registering Authority is obligated to carry out the amendment, and any fee non-deposit can be rectified later. The court found that the Assessing Authority did not act in good faith by ignoring the petitioner's request for a change of address and proceeded with assessment orders despite the change in business location.

Issue 3: Validity of assessment orders passed despite earlier court judgment
Despite a previous judgment in favor of the petitioner directing the Assessing Authority to refund the amount and change the business address, the Assessing Authority passed new assessment orders. The court questioned the Assessing Authority's actions and required an explanation for disregarding the court's earlier judgment. The Assessing Authority admitted to the mistake and apologized, leading to the withdrawal of the impugned orders.

Issue 4: Apology and cost imposition on the Assessing Authority
The court noted that the Assessing Authority's actions led to forced litigation and imposed a cost of Rs. 50,000 on the Assessing Authority for compelling a second round of litigation. The court directed the Principal Secretary, Trade Tax, U.P. Government, to investigate the conduct of the Assessing Authority and consider disciplinary action. The court emphasized the importance of adhering to court directions and conducting quasi-judicial functions responsibly.

The writ petition was disposed of, emphasizing the importance of jurisdiction, compliance with court directions, and accountability of the Assessing Authority in conducting assessments.