2015 (12) TMI 422 - HC - VAT and Sales Tax

Exemption from payment of advance tax - recovery of any tax under the Punjab Value Added Tax Act, 2005 - Held that - It is neither speaking nor has been passed after affording an opportunity of hearing to the petitioner. Further, it was noticed that after verifying all aspects of the case, as per notification dated 15.11.2013, the petitioner was not eligible for exemption from payment of advance tax. Once respondent No.4 was holding that the petitioner was found not eligible for exemption from payment of advance tax, the same required to be specifically dealt with by respondent No.4 by passing a speaking order and after affording an opportunity of hearing to him. - petitioner shall be entitled to lead any evidence to substantiate his claim before the concerned authority. - Petition disposed of.

Summary

Issues:
Petition under Articles 226/227 for exemption from payment of advance tax and issuance of writs in the nature of certiorari and mandamus.

Analysis:
1. The petitioner, a contractor registered under the Punjab Value Added Tax Act, 2005, sought exemption from payment of advance tax. The petitioner argued that the tax deducted at source along with input tax credit exceeded the total tax liability, justifying the exemption. The Government of Punjab had issued notifications granting exemption to various contractors under similar circumstances.
2. The petitioner filed a representation for exemption, which was rejected by the respondents citing ineligibility based on a notification dated 15.11.2013. The petitioner challenged this rejection through a writ petition, contending that the order lacked reasoning and was issued without a hearing.
3. The High Court found merit in the petitioner's contentions, observing that the impugned order did not meet the requirements of a reasoned and speaking order. Consequently, the court quashed the order and granted the petitioner liberty to submit a detailed representation to the appropriate authority within 15 days.
4. The court directed the authority to decide on the representation within 15 days of receipt, after affording the petitioner an opportunity of hearing. The petitioner was also allowed to present evidence to support the claim. The judgment emphasized the importance of a fair hearing and a reasoned order in such matters.
5. The writ petition was disposed of accordingly, maintaining the petitioner's right to seek exemption from advance tax through due process and fair consideration by the authorities.