2013 (3) TMI 23 - HC - VAT and Sales Tax

Reopening of assessment - KVAT Act - on receipt of notice, petitioner submitted Ext.P2, requesting the first respondent to allow time for submitting reply which was received by the first respondent on 30.11.2012 but Ext.P3 orders stating tax due assessed and interest thereon were parsed on the next day i.e. 1.12.2012 - Held that - As if the request of the petitioner was impermissible, the respondent ought to have communicated its rejection to the petitioner before making assessment. At any rate Ext.P3 order stating tax due assessed has been passed without allowing the petitioner an opportunity to file his reply or affording him an opportunity of hearing, thus it is untenable and be quashed.

Summary

Issues:
1. Validity of notice issued under Section 25(1) of the KVAT Act for reopening assessment for the year 2010-2011.
2. Challenge to the order assessing tax due and levying interest without allowing the petitioner to submit a reply or have a hearing.
3. Direction for the petitioner to file a reply to the notice within two weeks for fresh orders by the respondent.

Analysis:
1. The petitioner received a notice under Section 25(1) of the KVAT Act to reopen the assessment for the year 2010-2011. In response, the petitioner submitted a request for time to reply until a decision was made by the Government on the issue of discount. However, the assessment was completed without allowing the petitioner an opportunity to file a reply or a hearing. The court found the action of the respondent in passing the order without communication or opportunity for the petitioner as untenable and quashed the order.

2. The court emphasized that if the petitioner's request was impermissible, the respondent should have communicated the rejection to the petitioner. Since the request was received on 30.11.2012 and the assessment was completed on 1.12.2012, there was no opportunity for communication of rejection. The court held that the order assessing tax due and levying interest without affording the petitioner a chance to respond was not valid and quashed the order.

3. The court directed the petitioner to file a reply to the notice within two weeks from the judgment date. It further ordered that if the petitioner complies with filing the reply, the respondent should pass fresh orders in the matter. The writ petition was disposed of with this direction, and the petitioner was instructed to provide a copy of the judgment and the writ petition to the respondent for compliance with the court's orders.