2018 (3) TMI 1852 - HC - VAT and Sales Tax

Validity of assessment proceedings - service of notice of such assessment proceedings - fraud committed by the consultant cocern of petitioner - HELD THAT - Whatever be the differences between the petitioner and the department with respect to service of notices and assessments on the petitioner, it appears that even the department is prima facie convinced that Jignesh Metha had duped the petitioner and other similar traders. This is precisely why criminal prosecution has been launched against him. Under the circumstances, we would allow the petitioner to file appeals against the two orders of assessment. We are informed that the petitioner is already participating in the assessment which is pending for the remaining year. Though initially the petitioner had made a grievance that the orders of assessment were also not supplied by the department along with the reply, copies thereof are produced. The petitioner at least now has the copies of the orders of assessment. It will be open for the petitioner to file appeals against the orders of assessment. If such appeals are filed latest before 20.04.2018, the same shall be entertained on merits ignoring delay, if any, in filing such appeals. Petition disposed off.

Summary

Issues:
Assessment proceedings for the years 2011-12, 2012-13, and 2013-14; Non-participation in assessment proceedings; Allegations of fraud by consultant; Delay in filing appeals against assessment orders; Waiver of pre-deposit requirement; Coercive recovery proceedings; Appellate authority's role in deciding appeals.

The High Court considered a petition involving peculiar facts where the petitioner, an individual running a trading business, alleged that a consultant misused his password to file false returns and open fake bank accounts, leading to assessment proceedings for the years 2011-12, 2012-13, and 2013-14. Despite the department dispatching assessment notices to the petitioner's known address, the petitioner did not participate, resulting in the Assessing Officer passing assessment orders for 2011-12 and 2013-14. The petitioner, facing recovery proceedings, filed the petition, claiming the consultant's fraud. The Court noted the criminal case against the consultant and allowed the petitioner to file appeals against the assessment orders, even waiving the pre-deposit requirement and prohibiting coercive recovery until the appeals' disposal. The Court directed the appellate authority to decide the appeals independently, disregarding the current order's observations.

The Court acknowledged the petitioner's grievances regarding the consultant's fraudulent activities and the department's assessment proceedings. Despite the differences between the petitioner and the department regarding notice service and assessments, both parties agreed on the consultant's fraudulent actions, evident from the criminal prosecution initiated against him. The Court, considering these circumstances, permitted the petitioner to file appeals against the assessment orders for 2011-12 and 2013-14, emphasizing the importance of addressing the petitioner's claims of fraud and ensuring a fair hearing in the appeals process.

In its judgment, the Court provided specific directions to address the petitioner's concerns effectively. It allowed the petitioner to file appeals against the assessment orders, setting a deadline for filing the appeals by 20.04.2018. Notably, the Court waived the pre-deposit requirement for the appeals, enabling the petitioner to proceed without making any payments related to the assessment orders. Additionally, the Court prohibited any coercive recovery actions until the appeals were resolved, ensuring the petitioner's rights were protected during the appellate process. The Court emphasized that the appellate authority should decide the appeals impartially, disregarding any observations made in the current order, to guarantee a fair and unbiased review of the petitioner's claims and the assessment proceedings.