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2012 (9) TMI 853 - HC - VAT and Sales TaxChallenge the functioning of the Appellate Tribunal VAT - that after two members heard the case substantially (in the absence of the third member, who had proceeded on leave) and closed hearings on its behalf, the third member sought join the bench and participate in the proceedings - Held that - VAT Tribunal in the present case; it is a statutory tribunal, tasked with deciding appeals preferred by aggrieved parties against decisions of VAT adjudicatory authorities. Its membership comprises of those who hold or are entitled to hold judicial office; there are Administrative members too. There is a certain formality in the procedure it has to adopt, or follow - A basic component of fair hearing is that a man likely to be affected by a decision, should be heard by an unbiased or impartial tribunal or authority. The corollary to this and perhaps equally so, is that the officer, or authority who hears the litigant or individual, should issue the order. In view of the above discussion, this Court hereby directs the Delhi VAT Tribunal to forbear hearing of Appeal in the composition it had on 29-8-2012 and 7-9-2012, and continue the hearing with the two members (i.e. the Chairman and Mr. D.C. Anand) according to its previous composition, when the matter was part heard, and the petitioner s arguments had been concluded, on 27-8-2012. It is clarified that Ms. Nita Bali, Member (Administrative) shall not participate in the proceedings and she is however entitled to sit and hear all other cases in which she was a participant, either before her leave of absence, or after her re-joining the Tribunal, except in part heard cases or appeals, like in the present instance. The Tribunal shall take up the Petitioner s appeals, subject to the above directions, at its utmost expedience, and decide its merits - Petition allowed.
Issues Involved:
1. The propriety of the third member joining the Tribunal mid-hearing. 2. The legality of the Tribunal's procedure under the Delhi VAT Act. 3. The fairness of the hearing process. Detailed Analysis: 1. Propriety of the Third Member Joining Mid-Hearing: The petitioner challenged the procedure of the Appellate Tribunal, Value Added Tax, where a third member, who was on leave during the initial hearings, joined the bench mid-way through the proceedings. The petitioner argued that this was improper and denied a fair hearing, as the third member had not heard the substantial arguments already presented. The Tribunal initially consisted of two members, the Chairman and a Judicial Member, who heard the case on multiple dates. The third member, an Administrative Member, joined only after the petitioner had concluded their arguments. The petitioner objected to this, stating that the hearing should continue with the two original members to maintain consistency and fairness. 2. Legality of the Tribunal's Procedure under the Delhi VAT Act: The petitioner argued that the Delhi VAT Act does not authorize a procedure where a member who has not heard a matter can join and participate mid-way. The Tribunal's procedure was claimed to be unsupported by law and unreasonable. The respondents countered that the Delhi VAT Act and the VAT Tribunal Regulations, 2005, require the entire Tribunal to hear cases together, and the Chairman does not have the authority to constitute benches or hear appeals with fewer than the full membership. They cited Section 73 of the Act and Regulation 35, which suggest that the Tribunal should function with all its members unless a member has a conflict of interest. 3. Fairness of the Hearing Process: The court emphasized that a fundamental premise of the legal system is that no one should suffer an adverse order without a fair hearing. It noted that the VAT Tribunal, being a statutory body tasked with judicial functions, must adhere to principles of fairness and impartiality. The court referenced precedents which state that the authority hearing a matter must be the one to issue the order, ensuring that the decision is based on a full understanding of the arguments presented. The court found that allowing the third member to join mid-hearing would undermine public confidence in the Tribunal's fairness and impartiality. Conclusion: The court directed the Delhi VAT Tribunal to continue hearing the appeals with the original two members who had heard the case substantially. The third member, who joined mid-way, was barred from participating in the part-heard matter but could participate in other cases. The Tribunal was instructed to expedite the hearing of the petitioner's appeals and decide on their merits in accordance with the law. The petition was allowed, and the Tribunal's file was ordered to be returned immediately. Order: The court ordered that the Tribunal should refrain from hearing the appeals with the third member who joined mid-way and continue with the original two members. The petition was allowed, and the Tribunal's file was to be returned forthwith.
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