2016 (3) TMI 1466 - HC - VAT and Sales Tax

Seeking production of original record relating to the assessment proceedings - proceedings initiated by the Assessing Officer for making a provisional assessment were not correct - violation of principles of natural justice - HELD THAT - The petitioner was directed to file reply by 10th February 2016 which was not possible and accordingly the petitioner rightly applied for adjournment which was granted fixing 15th February 2016. The order sheet shows that the petitioner did not appear on 15th February 2016 but at the same time we find that if on the second date the petitioner did not appear the Assessing Authority had the option to proceed ex-parte or fix another date which in the instant case did not happen. If the Assessing Officer proceeded ex-parte he could have fixed another date for ex-parte hearing or after recording the absence of the petitioner could have proceeded ex-parte and passed an assessment order on that date itself which in the instant case did not happen. Therefore any assessment order made on the next date i.e. on 16th February 2016 becomes erroneous as no date was fixed for 16th February 2016 for making an assessment. Such assessment order passed on 16th February 2016 without due notice is apparently in gross violation of the principles of natural justice. The procedure relating to granting adequate opportunity as provided under Article 25 (1) of the U.P. VAT Act was not followed. Reasonable opportunity of being heard was not given. Proper inquiry was not made and therefore the ex-parte assessment order cannot be sustained - In exceptional and in extraordinary circumstances as has happened in the instant case the Court is of the opinion that a writ of certiorari should be issued in order to dispense justice to the assessee. There has been a gross violation of Article 14 of the Constitution of India. Adequate opportunity of hearing has not been provided nor the sufficient time was given to file objections. In M/S. AROMA CHEMICALS VERSUS UNION OF INDIA OTHERS 2014 (4) TMI 949 - ALLAHABAD HIGH COURT a Division Bench of this Court held that a period of 7 days time given for filing reply to the show cause notice was found to be insufficient and in violation of the principles of natural justice and accordingly the order was quashed. In the instant case provisional notice was issued on 9th February 2016 and an assessment order was passed on 16th February 2016 within a period of one week - undue haste and speed was exercised by the Assessing Officer. The Court fails to fathom as to what was the urgency in proceeding in such a cavalier fashion. There could have been some urgency if the period of limitation was expiring for making an assessment order which in the instant case was not existing. Tthe assessment orders cannot be sustained and are quashed - The writ petition is accordingly allowed at the admission stage.

Summary

Issues Involved:
1. Violation of principles of natural justice in the provisional assessment proceedings.

Detailed Analysis:

Violation of Principles of Natural Justice in Provisional Assessment Proceedings:
The judgment addressed the violation of principles of natural justice in the provisional assessment proceedings conducted by the Assessing Officer. The petitioner, engaged in providing DTH broadcasting services, was subjected to a provisional assessment by the assessing authority. The court observed that the entire assessment process was conducted hastily and in violation of the principles of natural justice enshrined under Article 14 of the Constitution of India and Section 25(1) of the U.P. VAT Act. The court emphasized the importance of providing a reasonable opportunity of being heard to the dealer before making an assessment order. It was noted that in this case, the assessment was carried out without affording the petitioner a proper opportunity to represent and file objections, which is a crucial aspect of natural justice. The court highlighted that the mere issuance and service of notice were not sufficient, and the Assessing Officer failed to adhere to the principles of natural justice throughout the proceedings.

Procedural Irregularities and Hasty Assessment Order:
The judgment pointed out various procedural irregularities in the provisional assessment process, including the issuance of a notice on 9th February, 2016, and the subsequent passing of the assessment order on 16th February, 2016 within a week. The court criticized the undue haste and speed exercised by the Assessing Officer in conducting the assessment without providing a reasonable opportunity for the petitioner to be heard. It was emphasized that the period of one week between the notice and the assessment order indicated a lack of proper inquiry and opportunity for the petitioner to present their case. The court expressed bewilderment regarding the urgency displayed by the Assessing Officer in finalizing the assessment in such a hurried manner, especially when there was no impending deadline or limitation period that necessitated such expeditious action.

Judicial Intervention and Quashing of Assessment Orders:
In light of the procedural irregularities and violation of natural justice principles, the court decided to intervene and quash the assessment orders issued against the petitioner. Despite acknowledging the availability of the appeal remedy under the U.P. VAT Act, the court deemed it inappropriate to compel the petitioner to pursue that route due to the exceptional circumstances and gross violation of constitutional rights observed in this case. Citing precedents where insufficient time for filing replies was deemed a violation of natural justice, the court emphasized the importance of fairness, adequate hearing opportunities, and adherence to due process in administrative proceedings. Consequently, the court allowed the writ petition at the admission stage and directed the assessing authority to conduct a fresh assessment after affording the petitioner a proper opportunity to be heard.

This detailed analysis of the judgment highlights the key issues of violation of natural justice principles in the provisional assessment proceedings and the subsequent quashing of assessment orders due to procedural irregularities and undue haste in the assessment process.