2014 (7) TMI 1009 - HC - VAT and Sales Tax

Exemption on sales in the course of import - Satisfactory document not filed - Assessee contends that that factual conclusions have been arrived at in the assessment orders and penalty orders without disclosing those facts to the petitioner - Held that - exhibits P9 and P9(a) notices issued under sections 25(1) and 67(1) of the KVAT Act show that in both these notices, the petitioner was called upon to file objections and was also offered an opportunity of hearing. In response to these notices, the petitioner submitted the relevant bills of lading. On receipt of these bills, all that the first respondent has done is that he has gone through the documents produced by the petitioner, checked the transaction with the KAVATIS and has come to his conclusions which are stated in these orders. Similar is the case with the other factual conclusions stated in these orders - Thus, the conclusions arrived at in the impugned orders are based on the documents produced by the petitioner. For arriving at such conclusions, I do not think it was necessary for the respondent to have issued notice other than the notices issued under sections 25(1) and 67(1) of the KVAT Act - Hence, the remedy available to the petitioner is not in a proceeding under article 226 of the Constitution of India, but she has to seek statutory remedies available under the Act - Decided against assessee.

Summary

Issues:
Exemption claim on sales in the course of import for the years 2009-10, 2010-11, and 2011-12; Assessment and penalty notices issued under sections 25(1) and 67(1) of the KVAT Act; Challenge to factual conclusions in assessment and penalty orders; Violation of principles of natural justice in passing exhibits P1 to P6 orders.

Analysis:
The petitioner, a dealer under the Kerala Value Added Tax Act, claimed exemption on sales in the course of import for specific years. The respondent issued notices to complete assessment and levy tax at four percent due to the lack of satisfactory documents supporting the exemption claim. Similar notices proposing penalty under section 67 were also sent, but they were returned as unclaimed by postal authorities. The petitioner later received the notices, submitted bill of entries, and did not request a hearing before the assessment was completed, resulting in penalty orders (exhibits P1 to P6).

The main argument raised was that the assessment and penalty orders lacked disclosure of factual conclusions to the petitioner, alleging a violation of natural justice principles. However, it was noted that the notices under sections 25(1) and 67(1) of the KVAT Act provided the petitioner with the opportunity to file objections and have a hearing. The conclusions in the impugned orders were based on documents submitted by the petitioner, such as bills of lading, without the need for additional notices or hearings. The court concluded that there was no violation of natural justice principles in the orders challenged in the writ petition, suggesting that statutory remedies under the Act should be sought instead of constitutional remedies.

In light of the above analysis, the court dismissed the writ petition, indicating that the orders were not vitiated by a breach of natural justice principles. The judgment emphasized the importance of utilizing statutory remedies available under the Act in similar situations instead of pursuing constitutional avenues.