2013 (5) TMI 1054 - HC - VAT and Sales Tax

Summary

Issues involved: Non-observance of the principle of natural justice in passing assessment orders u/s 40(2) read with Section 35(7) of the Jharkhand Value Added Tax Act, 2005 without affording opportunity of hearing to the writ petitioner.

Judgment Summary:

1. The writ petitions were decided collectively due to the common issue of non-observance of natural justice in passing assessment orders without providing the petitioner an opportunity to be heard. The Assessing Officer created a substantial liability without proper basis, considering market values not reflective of the petitioner's actual situation. The petitioner's contentions regarding pricing discrepancies were not adequately addressed, highlighting a clear violation of natural justice principles.

2. The Officer-in-charge's legal submissions in the affidavit cannot bind the adjudicatory authorities, emphasizing the need for a fair hearing and independent decision-making process. The orders were set aside due to the lack of opportunity given to the petitioner and the improper consideration of materials in the assessment process.

3. As no opportunity of hearing was granted in these matters, the orders dated 9.2.2013 were deemed invalid and the cases were remanded for proper assessment.

4. The Assessing Officer was cautioned to exercise diligence in assessments to avoid errors that could lead to significant revenue losses and legal challenges. An example was cited where incorrect assumptions were made, resulting in a substantial tax liability based on flawed reasoning.

5. The Assessing Officer's methodology in determining market value was questioned, emphasizing the importance of considering actual transaction details rather than relying solely on external benchmarks like IBM rates.

6. The observations made were not on the merit of the case but aimed at highlighting potential flaws in the assessment process that could have been rectified with proper assistance from the petitioner.

7. Officers were reminded of their individual responsibility in conducting assessments fairly and without malice, as any serious faults could lead to personal liability.

8. Reference was made to a Supreme Court judgment, but no specific comments were made as the issues of merit were left for the Assessing Officer to address.

9. The writ petitions were allowed, setting aside the impugned orders and remanding the cases back to the Assessing Officer for proper consideration.

10. A future date was set for the parties to appear before the Assessing Officer, with directions to provide necessary documents, allow evidence presentation, and ensure a fair hearing process. The Commissioner was instructed to circulate the order to all relevant authorities to emphasize the importance of fair and diligent assessment practices.