2014 (7) TMI 785 - HC - VAT and Sales Tax

Writ petition - Call for records - Violation of principle of natural justice - Held that - assessee has a right to have the material which the revenue has relied upon to arrive at a prima-facie opinion that proceedings should be further proceeded. The question, therefore, of an assessee being entitled to have the copies of the documents being relied upon by the revenue, particularly when the said documents have been seized from its possession, has to be answered in affirmative. - The test of reasonableness and the principles of natural justice also require that if assessee is put to notice he must know about the material being relied upon by the revenue to give an effective reply. There cannot be any doubt whatsoever that principles of natural justice have to be followed and the petitioner is entitled for supply of copies of documents being relied upon by the revenue or at least an inspection thereof - However, the apprehension being expressed by the revenue regarding manipulation in books of account by the petitioner after getting the documents seized also cannot be said to be without any basis. - A reasonable and pragmatic solution to the problem, in our view, is to direct the petitioner to produce the account books and other relevant documents before the authority who may verify the same or obtain copies thereof as he may deem fit and thereafter supply the copy of the documents being relied upon by the revenue. The petitioner after receiving the copies of the documents may file its reply to the notice and thereafter the proceeding may be undertaken in accordance with law - Decided in favour of assessee.

Summary

Issues:
1. Entitlement to copies of seized documents under U.P. Value Added Tax Act, 2008 and Central Sales Tax Act, 1956 for assessment proceedings.
2. Violation of natural justice principles due to non-provision of seized documents.
3. Compliance with legal principles while ensuring equities on both sides in the case.

Analysis:
1. The petitioner, a private limited company, sought writs to obtain copies of seized documents and survey reports under Section 45 of U.P. Value Added Tax Act, 2008. The petitioner emphasized the necessity of these documents for effective compliance with the assessment proceedings for the A/Y 2011-12. The respondent authorities failed to provide the requested documents despite multiple requests from the petitioner, leading to the filing of the writ petition.

2. The petitioner argued that the denial of access to seized documents hindered its ability to respond effectively to show cause notices, thus violating its right and the principles of natural justice. The respondent contended that the petitioner must first produce original account books for verification to prevent manipulation before receiving copies of the seized documents. The court acknowledged the importance of an assessee having access to materials relied upon by the revenue to provide a meaningful reply, emphasizing compliance with natural justice principles.

3. Citing legal precedents, the court highlighted the significance of ensuring reasonableness and adherence to natural justice principles in cases where civil or adverse consequences could impact the party involved. While recognizing the concerns raised by the revenue regarding potential manipulation post-receipt of seized documents, the court balanced the equities by directing the petitioner to submit account books for verification before receiving copies of the documents. This approach aimed to address the rights of the petitioner while mitigating the risks of manipulation, ensuring a fair and lawful progression of the assessment proceedings.

In conclusion, the court disposed of the writ petition by directing the petitioner to provide account books for verification within a specified timeframe. Upon verification, the authority would supply copies of the seized documents to the petitioner for response to the show cause notice. This decision aimed to uphold legal principles, ensure fairness, and facilitate the progression of the assessment proceedings in accordance with the law.