2014 (10) TMI 131 - HC - VAT and Sales Tax

Penalty - Exemption from tax - request to grant 30 days time as against the show cause notice - Violation of principle of natural justice - Held that - Admittedly, as against the show cause notice dated 10.1.2014, the petitioner sent a reply dated 16.1.2014 and 15.2.2014 seeking extension of time. But the respondent, without considering the same, has straightaway passed the impugned order. Further, though the petitioner claims exemption, the same has also not been considered by the respondent - Admittedly, the claim of exemption has to be considered only by the authority. In that context, I am inclined to set aside the impugned order. Accordingly, the writ petition is allowed and the impugned order is set aside. This matter is remitted back to the respondent for fresh consideration on condition that the petitioner, in order to show his bonafide, has offered to deposit 50% of the tax amount on or before 15.7.2014 - Decided in favour of assessee.

Summary

Issues:
Challenge to impugned order under Central Sales Tax Act, principles of natural justice, levy of penalty on tax-exempt items, opportunity for personal hearing, consideration of exemption claim, setting aside of impugned order, remittance for fresh consideration with deposit condition.

Analysis:
The writ petition challenges an order passed by the respondent under the Central Sales Tax Act. The petitioner contends that despite requesting a 30-day extension in response to a show cause notice, the respondent did not respond and issued the impugned order without granting an opportunity for a hearing, violating principles of natural justice. The petitioner also argues against the imposition of a penalty on items exempt from tax.

The Additional Government Pleader argues that the petitioner failed to approach the authority in a timely manner regarding the exemption claim and suggests that the petitioner can have another opportunity by depositing 50% of the tax amount. The judge acknowledges both sides' submissions.

The petitioner's main grievance is the lack of a personal hearing before the impugned order was passed, especially concerning the claim for exemption on certain items. Despite the petitioner's replies seeking an extension and exemption consideration, the respondent proceeded with the order without due consideration.

The judge notes that the authority is responsible for evaluating exemption claims and decides to set aside the impugned order. The writ petition is allowed, and the matter is sent back to the respondent for fresh consideration with a condition that the petitioner must deposit 50% of the tax amount by a specified date. The respondent is directed to review the case, considering the petitioner's documents related to the exemption claim and providing a fair opportunity for the petitioner. No costs are awarded, and related petitions are closed.