2020 (1) TMI 1224 - HC - VAT and Sales Tax

Principles of natural justice - Levy of Turnover tax - inter-state transactions at higher rate of interest of 14.5% - allegation that these transactions were not supported by any documentary evidence/statutory forms - HELD THAT - According to the petitioner, only at that time the petitioner came to know about the impugned assessment order allegedly passed on 31.03.2020 for the period 2015-16 and the petitioner logged on to the web portal of the respondents and accessed the same - Sri J.Anil Kumar, Special Counsel for Commercial Taxes appearing for respondents does not dispute that from 21.03.2020 there was a nationwide lock down imposed by the Statement Government as well as the Union of India owing to COVID-19 Pandemic situation and the petitioner was disabled from appearing on 30.03.2020 for personal hearing. There has been violation of principles of natural justice and that grave prejudice has been caused to the petitioner. The matter is remitted back to the 1st respondent - Petition allowed by way of remand.

Summary

Issues:
Challenge to Assessment Order and Notice for Reassessment under Central Sales Tax Act, 1956; Violation of Principles of Natural Justice.

Analysis:
The petitioner challenged the Assessment Order and Notice for reassessment issued by the 1st respondent under the Central Sales Tax Act, 1956 for the period 2015-2016. The petitioner contended that as a registered dealer under the Telangana VAT Act, engaged in manufacturing poultry and cattle feed, it was exempt from submitting statutory forms for claiming exemption on inter-state transactions. Despite the petitioner's objections and inability to attend a personal hearing due to the COVID-19 lockdown, the 1st respondent passed the assessment order levying tax at a higher rate of interest on interstate sales. The petitioner also argued that the assessment order was hastily passed to meet the limitation deadline. The petitioner discovered the assessment order only after receiving a notice proposing reassessment, which led to the petitioner accessing the order online.

The Special Counsel for Commercial Taxes acknowledged the lockdown situation preventing the petitioner from attending the personal hearing, indicating a violation of natural justice principles and causing significant prejudice to the petitioner. Consequently, the High Court allowed the Writ Petition, setting aside the Assessment Order and the Notice for reassessment issued by the 1st respondent. The matter was remitted back to the 1st respondent, instructing them to provide a personal hearing to the petitioner and allowing the petitioner to present any supporting material. The court directed the respondents to pass a reasoned order in accordance with the law and communicate it to the petitioner. No costs were awarded, and any pending miscellaneous petitions were closed as a result of the judgment.