2019 (4) TMI 1742 - HC - VAT and Sales Tax

Validity of assessment order - section 31 of the Bihar Value Added tax Act, 2005 - service of notice - casual default - principles of natural justice - HELD THAT - section 31 of the Bihar Value Added tax Act, 2005 - HELD THAT - While the records of the proceeding do indicate a service of notice to the petitioner by e-mail, there is no physical service of notice on the petitioner as provided under the Rules. May be the petitioner has his reasons for not checking his email which is a valid form of service but then, unless it is established that the petitioner was deliberately avoiding service, a simple case of a casual default may not be sufficient to shut the doors for such assessee and for proceeding ex parte. Section 31 of the Act has a purpose behind when it allows the assessee to present his case before any such order is passed and obviously an ex parte order passed is an exception to the legislative intent as well as the object behind the principle of due representation. May be, where an assessee continues to default on a notice, the assessing authority has valid reasons to proceed ex parte but a casual default of the present kind may not be sufficient enough to deny the assessee such right of representation. Matter remanded to the assessing authority, i.e., respondent No. 4, Assistant Commissioner of Commercial Taxes, Munger Circle, Munger, to consider the matter afresh and for its disposal in accordance with law with due opportunity of hearing to the petitioner.

Summary

Issues:
Challenge to assessment order under Bihar Value Added Tax Act, 2005 - Validity of notice served via email - Opportunity of hearing to the petitioner - Principle of substantial justice - Remittal of matter to assessing authority.

Analysis:
The petitioner challenged the assessment order passed by the Assistant Commissioner of Commercial Taxes, Munger Circle, Munger under section 31 of the Bihar Value Added Tax Act, 2005, and questioned the demand notice of ?3,39,944. The petitioner contended that the order was ex parte, lacking proper opportunity of hearing and representation. The respondent argued that the notice was validly served via electronic mail as per rule 50(1)(d), even though not physically served. The petitioner acknowledged the default in checking email but cited previous cases where matters were remitted for fresh disposal with an opportunity of hearing, emphasizing the principle of substantial justice.

Upon hearing both parties and examining the records, the court noted the service of notice via email but observed the absence of physical service as required by the Rules. The court recognized the importance of allowing the assessee to present their case before passing any order, highlighting that an ex parte order goes against the legislative intent and due representation principle. The court emphasized that a casual default in checking email may not justify proceeding ex parte unless deliberate avoidance is proven. Citing section 31 of the Act, the court stressed the need for due representation and remitted the matter to the assessing authority for fresh disposal with an opportunity of hearing for the petitioner.

In line with the principles of substantial justice and previous court orders, the court directed the assessing authority to reconsider the matter and provide an opportunity of hearing to the petitioner on a specified date. The court warned that failure to appear on the given date would allow the assessing authority to proceed as per law. Consequently, the assessment order and demand notice were quashed and set aside, and the writ petition was allowed with the given directions.