2016 (1) TMI 279 - HC - VAT and Sales Tax

PVAT - validity of exparte assessment - documents were impounded - violation of principles of natural justice without affording an opportunity - Held that - There is force in the submissions of learned counsel for the petitioner, because the impugned order dated 12.6.2015 was passed exparte without supplying the copies of the impounded documents to the petitioner to enable it to submit its effective reply, explaining the entries in the same, despite the fact that it was obligatory upon the respondents under Section 46 of 2005 Act. The concerned Officer could not have legally kept the impounded documents beyond the maximum period of 60 days. In the instant case, the premises of the petitioner was inspected on 22.5.2012, on which date, the documents were impounded. The petitioner was asked to submit its reply and to explain impounded documents which was not possible for it, without seeing them. The concerned Officer of the respondents ought to have supplied the copies of the impounded documents, before asking the petitioner to submit its reply and to explain the same. Accordingly, the order is quashed. The matter is remitted back to the assessing authority to pass a fresh order in accordance with law. - Decided in favor of assessee.

Summary

Issues:
Challenge to exparte assessment order for violation of natural justice principles under Punjab Value Added Tax Act, 2005 and Central Sales Tax Act, 1956.

Analysis:
The petitioner, a registered proprietorship concern under the Punjab Value Added Tax Act, 2005 and Central Sales Tax Act, 1956, challenged an exparte assessment order dated 12.6.2015, alleging it was passed without affording an opportunity and in violation of natural justice principles. The petitioner's business premises were inspected by the respondents, impounding documents for verification. Despite requests for the return or copies of impounded documents, the officer refused, leading to a demand of Rs. 1,93,55,530 under the 2005 Act and Rs. 3,16,529 under the 1956 Act in the impugned order. The petitioner argued that the officer exceeded jurisdiction by not returning the documents within the statutory period, and the assessment order was passed without proper application of mind or confrontation with relevant documents.

The learned counsel for the petitioner contended that the impugned order violated Section 46(3) of the 2005 Act, which mandates the return of impounded documents within specific time frames. The petitioner was not given an opportunity to explain entries in the documents, rendering the order a violation of natural justice. On the other hand, the State counsel did not object to accepting the writ petition and remanding the case by quashing the exparte order dated 12.6.2015.

The court found merit in the petitioner's submissions, noting that the impugned order was passed without providing copies of impounded documents, hindering the petitioner's ability to submit an effective reply. The officer's failure to supply copies within the statutory period of 60 days was deemed unlawful. The court emphasized that the petitioner should have been given access to the impounded documents before being asked to explain them, highlighting a violation of natural justice principles.

Consequently, the court quashed the order dated 12.6.2015 and remitted the matter back to the assessing authority for a fresh order in compliance with the law. The concerned officer was directed to provide copies of the impounded documents to the petitioner to facilitate a proper response and subsequent decision-making process.