2013 (3) TMI 831 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Validity of Exts.P4 to P7 assessment orders for sales tax dues.
2. Legitimacy of the demand for damages by the Harbour Engineering Department.
3. Royalty demand for granite quarrying.

Summary:

1. Validity of Exts.P4 to P7 Assessment Orders for Sales Tax Dues:
The petitioner contended that Exts.P4 to P7 assessment orders are "non est and void" as they were issued without providing a reasonable opportunity to contest the matter. The assessments were originally set aside by the Commissioner and remitted back for fresh disposal. The petitioner sought adjournment to file an appeal, which was granted an interim stay. However, the department proceeded with the assessments without granting the requested time, leading to the orders being passed on 20/03/2003. The Court found that the petitioner was not given a fair opportunity to adduce evidence, rendering Exts.P4 to P7 liable to be set aside.

2. Legitimacy of the Demand for Damages by the Harbour Engineering Department:
The petitioner argued that the demand for damages due to breach of contract, as per Exts.P8 and P10, was invalid as there was no provision for the department to unilaterally fix liability. The Court referenced the principle that a party to a contract cannot be an arbiter in its own cause, citing precedents such as State of Karnataka v. Rameshwara Rice Mills and Shriram Engineering Construction Co. Ltd. v. K.S.I.D.C. The Court concluded that the Harbour Engineering Department must seek adjudication through a suit rather than unilateral assessment and recovery.

3. Royalty Demand for Granite Quarrying:
The petitioner claimed exemption from royalty for granite quarried for government works, arguing that the same principle should apply to granite from private land. The Court noted that the petitioner's representation for exemption was pending and directed the petitioner to submit a fresh representation. The Government was instructed to dispose of this representation within three months, during which any recovery proceedings would be stayed.

Final Orders:
i) Exts.P4 to P7 assessment orders were set aside.
ii) The 1st respondent was directed to finalize the assessments within three months.
iii) The petitioner was instructed to appear before the assessing authority within six weeks to adduce necessary evidence.
iv) Exts.P8 and P10 were quashed.
v) The petitioner was allowed to submit a fresh representation for royalty waiver, to be disposed of within three months.
vi) Ext.P16 was quashed, allowing revenue authorities to initiate further proceedings post-assessment and Government's decision on royalty.