2014 (9) TMI 667 - HC - VAT and Sales Tax

Re-assessment of proceedings - Section 39 of the Karnataka Value Added Tax Act, 2003 - Held that - Petitioner had in fact sought personal hearing and in the matter, relevant extracts of the reply dated 31/05/2014 are made in the impugned order. However, from the impugned order, it is not forthcoming as to on which date the petitioner appeared through its authorized representative before respondent No.3. No doubt, it is recorded in the last few paragraphs of the impugned order that the petitioner has reiterated its stand in the personal hearing granted to it. But in the absence of there being any personal hearing in the matter, the recording of the fact that there was in fact a personal hearing is incorrect and cannot be accepted. All that the petitioner is seeking is an opportunity of being heard in person so that the case of the petitioner could be explained to respondent No.3 authority and having regard to innumerable details which had to be explained by the petitioner, respondent No.3 ought to have granted a personal hearing to the petitioner. In that view of the matter, the impugned order is set aside, the petitioner is directed to appear before respondent No.3 authority on 04/08/2014 without insisting on any separate notice from that authority. On that date or on any other date ordered by respondent No.3 authority, the petitioner to state its case through its authorised representative. Decided in favour of assessee.

Summary

Issues:
Re-assessment order challenged under Section 39 of the Karnataka Value Added Tax Act, 2003; Allegation of denial of personal hearing violating principles of natural justice; Incorrect dates mentioned in the impugned order; Opportunity for petitioner to be heard in person sought.

Analysis:
The judgment concerns the challenge to a re-assessment order under Section 39 of the Karnataka Value Added Tax Act, 2003. The petitioner filed returns for the assessment year 2007-08, following which re-assessment proceedings were initiated. The petitioner contended that despite seeking personal hearing on 27/05/2014, no such opportunity was granted before the re-assessment order was passed on 31/05/2014. The petitioner alleged a violation of principles of natural justice, arguing that certain dates in the order were incorrect and that the order was not in accordance with the law.

During the proceedings, the petitioner emphasized the importance of a personal hearing to present its case effectively. The respondent authority, on the other hand, argued that the petitioner had ample opportunity to appear and present its case, implying that the petitioner's claim of being denied a chance to establish its case was unfounded. The court examined the impugned order dated 31/05/2014 and noted that while the petitioner had indeed requested a personal hearing, there was no clear indication of the date on which the petitioner appeared before the authority. The court found the recording of a personal hearing in the order to be incorrect due to the absence of such a hearing.

Consequently, the court set aside the impugned order and directed the petitioner to appear before the authority without the need for a separate notice. The petitioner was instructed to present its case through an authorized representative, and the authority was tasked with passing a fresh order in compliance with the law after considering the petitioner's submissions. The judgment emphasized the petitioner's right to be heard in person and the necessity for a proper opportunity to explain the details relevant to the case before the authority.

In conclusion, the court quashed the impugned order, leaving all contentions open for both parties. It was further stated that if the petitioner failed to appear before the authority on the specified date, the impugned order would be given effect. The judgment underscored the significance of providing a fair opportunity for the petitioner to present its case and highlighted the importance of adhering to principles of natural justice in administrative proceedings.