2014 (1) TMI 1514 - HC - VAT and Sales Tax

Violation of principle of natural justice - Exercise of Revisional jurisdiction - Opportunity of hearing not granted - Held that - Sub-section 1 of Section 63A of the Act categorically states that before passing any order in exercise of revisional jurisdiction, the person concerned must be given an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment or cancelling the assessment or directing a fresh assessment ought to be ordered - in response to the notice issued by the 1st respondent, the petitioner s representative appeared and sought time for producing the details and records before the authority. It is also noted that 20 days time was granted. But no specific date for producing the necessary documents was fixed. In fact time was granted on 07.10.2013 and the impugned orders have been passed on 29.10.2013 whereas the petitioner had sought time till the end of October 2013 to produce the details and records before the authority. Possibly, if the matter was taken up for consideration on a particular date in October or later, by then, the petitioner would have appeared and produced the materials. As the impugned orders have been passed on 29.10.2013, petitioner was not in a position to put forth his case along with the details and records before the 1st respondent. Therefore, the impugned order have been passed without considering the case of the petitioner and neither looking into the records that were to be submitted by the petitioner and hence would have to be quashed - Decided in favour of assessee.

Issues:
1. Challenge to the orders of the 1st respondent-authority under Section 63A of the Karnataka Value Added Tax Act, 2003 for various tax periods.
2. Allegation of exercising revisional jurisdiction without granting an opportunity to the petitioner.
3. Violation of principles of Natural justice.
4. Interpretation of Section 63A of the Act regarding the opportunity of being heard before passing orders.
5. Quashing of the impugned orders and directing the petitioner to appear with necessary details and records.

Analysis:
1. The judgment deals with the challenge to the orders of the 1st respondent-authority under Section 63A of the Karnataka Value Added Tax Act, 2003 for different tax periods. The petitioner, engaged in the business of leasing motor cars, sale of used motor cars, and fleet management services, was aggrieved by the orders and demand notices issued. The reassessment proceedings initiated earlier were dropped, but the 1st respondent exercised suo moto revisional jurisdiction leading to the impugned orders dated 29.10.2013. The petitioner, feeling aggrieved, filed Writ Petitions challenging the said orders.

2. The main contention raised was that the revisional jurisdiction was exercised without granting the petitioner an opportunity to present their case or produce necessary documents. The petitioner argued that had they been given a chance to be heard, the impugned orders would not have been passed. The petitioner chose a Writ Petition instead of an appeal, alleging a violation of principles of Natural justice. On the contrary, the respondents contended that sufficient opportunity was provided but not availed by the petitioner, justifying the orders passed by the 1st respondent.

3. The Court analyzed Section 63A of the Act, emphasizing the requirement of providing an opportunity of being heard before passing any order in exercise of revisional jurisdiction. The Court noted that although the petitioner's representative sought time for producing details and records, no specific date was fixed for submission. The impugned orders were passed before the petitioner could present their case and records, leading to a lack of consideration of the petitioner's position. Consequently, the Court held that the impugned orders were passed without due consideration and needed to be quashed.

4. Based on the above analysis, the Court quashed the impugned orders and directed the petitioner to appear before the 1st respondent authority with necessary details and records on a specified date. The Court instructed the 1st respondent to consider the case of the petitioner in accordance with the law and dispose of the revision proceedings promptly. The petitioner was also directed to cooperate for the expeditious resolution of the revision proceedings. As a result, the impugned orders and all consequential demand notices were quashed, and the Writ Petitions were disposed of with the given observations and directions.

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