2016 (1) TMI 378 - HC - VAT and Sales Tax

Validity of impugned order - Opportunity of hearing not granted - Held that - Documents produced by the petitioner would show that reply was submitted before the office of the 1st respondent only on 04.09.2015. By this time however, the 1st respondent had already passed assessment order, as also issued the notice of demand. Considering the fact that the petitioner had almost two weeks time after the submission of reply and before the 1st respondent passed order, to produce the books of accounts, in order to substantiate his contentions in reply, I am of the view that order of the 1st respondent cannot be faulted on the ground that it was passed in violation of Rules of Natural Justice. The petitioner having chosen not to produce his books of accounts for perusal by the 1st respondent before the assessment, cannot be heard to complain of a violation of the Rules of Natural Justice while passing order - Decided against assessee.

Summary

Issues:
Challenge against Ext.P8 order of assessment under the Kerala Value Added Tax Act for the assessment year 2012-2013. Violation of Rules of Natural Justice in passing Ext.P8 order.

Analysis:
The petitioner challenged the Ext.P8 order of assessment under the Kerala Value Added Tax Act for the assessment year 2012-2013, alleging a violation of the Rules of Natural Justice. The petitioner contended that they were not given an opportunity to be heard or to produce books of accounts before the assessment. The High Court considered the submissions made by both parties and examined the timeline of events leading to the passing of Ext.P8 order.

The petitioner had responded to a notice with Ext.P5 reply, referencing entries in the ledger and other books of accounts but did not make the books of accounts available for perusal by the adjudicating authority. Subsequently, the petitioner submitted Ext.P6 reply requesting an opportunity to produce books of accounts for 2012-2013 along with a personal hearing. However, Ext.P6 reply was submitted after Ext.P8 order was passed by the 1st respondent. The Court noted that the petitioner had almost two weeks between the submission of Ext.P5 reply and the passing of Ext.P8 order to produce the books of accounts to substantiate their contentions.

The Court held that since the petitioner chose not to produce the books of accounts before the assessment, they cannot now complain of a violation of the Rules of Natural Justice in passing Ext.P8 order. Therefore, the challenge against Ext.P8 order failed, and the writ petition was dismissed. The petitioner was granted time to prefer an appeal against Ext.P8 order, with directions to the appellate authority to consider the appeal as duly constituted if filed within two weeks from the date of receipt of the judgment.

In conclusion, the High Court found that the Ext.P8 order of assessment was not passed in violation of the Rules of Natural Justice as the petitioner had the opportunity to produce the books of accounts before the assessment but failed to do so. The Court emphasized the importance of complying with statutory formalities in pursuing the appeal process under the KVAT Act.