2016 (11) TMI 494 - HC - VAT and Sales Tax

Validity of ex-parte order - demand due to denotification of certain sez areas - whether the demand for the interest on tax paid on areas denotified, is justified? - Held that - demand for the interest on the said amount may not be justified, since it is a demand raised on the petitioner as a consequence upon the request for denotification, which is in process - this Court is inclined to grant one more opportunity to the petitioner to go before the Assessing Officer subject to certain conditions - The petitioner is directed to pay 15% of the disputed tax for all the four Assessment Years within a period of two weeks from the date of receipt of a copy of this order. On such remittance, the petitioner is granted 15 days time to submit their objections to the proposal made by the respondent and on receipt of the objections, the respondent shall afford an opportunity of personal hearing and re-do the assessment in accordance with law. Other proceedings also to be re-done taking note of the observation made by this Court - matter remanded back.

Summary

Issues:
- Challenge to assessment orders for multiple years
- Alleged belated payment of tax and levy of penalty
- Receipt of pre-revision and reminder notices
- Justification for completing assessment without referring to notice receipt
- Interest levied on payment due to denotification request
- Opportunity for petitioner to go before Assessing Officer
- Disputed tax payment and objections submission
- Re-doing assessments and setting aside demands

Analysis:
The High Court of Madras addressed various issues in this judgment. Initially, the court considered the challenge to assessment orders for multiple years, specifically focusing on the alleged belated payment of tax and levy of penalty. The court highlighted the importance of the petitioner receiving pre-revision and reminder notices. It questioned whether the assessment could be completed without confirming that the petitioner had indeed received the requisite notices. The court acknowledged that the petitioner had received the notices, but noted discrepancies due to the ex-parte completion of the assessment and the petitioner's request for denotification, leading to interest levied on payments, which was disputed in separate writ petitions.

Regarding the interest demand, the court opined that it might not be justified as it stemmed from the denotification process. The court decided that the issue of interest should be left for the Assessing Officer to decide upon remand. Furthermore, the judgment addressed the petitioner's request for another opportunity to present their case before the Assessing Officer. The court granted this request under certain conditions, directing the petitioner to pay a percentage of the disputed tax within a specified period and allowing time for objections submission.

In conclusion, the court disposed of the writ petitions challenging the assessment orders by granting the petitioner an additional opportunity to present their case. The court set specific directions for the petitioner to follow, including payment of the disputed tax and submission of objections. Additionally, the court ordered a re-doing of assessments for the relevant years, setting aside the impugned demands and remanding the matter to the respondent for further consideration based on the observations made in the judgment. The judgment emphasized the importance of procedural fairness and providing adequate opportunities for the petitioner to address the assessment issues effectively.