2017 (3) TMI 400 - HC - VAT and Sales Tax

Natural justice - validity of assessment order - petitioner s claim that no personal hearing was given and that objections could not be filed within 15 days from the date of receipt of a copy of the pre-assessment notice - Held that - Circular, cannot whittle down the width and amplitude of what the statute provides for. Therefore, the circular will have to be read in consonance with the provisions of the statute, if it is to be sustained. Non-provision of personal hearing impregnates the impugned order with illegality - the impugned order is set aside - petition allowed - decided in favor of petitioner.

Summary

Issues:
Challenging assessment order under Central Sales Tax Act, 1956 due to lack of personal hearing and insufficient time to file objections.

Analysis:
The Writ Petition challenged an assessment order dated 30.09.2016 under the Central Sales Tax Act, 1956. Prior to the assessment order, a pre-assessment notice dated 11.08.2016 was issued to the petitioner, requiring objections and supporting evidence. The assessment concluded that the petitioner did not file the necessary declaration, resulting in additions to the taxable turnover for A.Y. 2015-16. The petitioner contended that the notice was received late, leaving insufficient time to respond. They argued that no personal hearing was granted, emphasizing their status as a 100% Export Oriented Unit with no domestic sales, which could have been clarified with a personal hearing.

The respondents claimed that the petitioner was given an opportunity which was not utilized. They argued that the Circular dated 03.02.2016 required only a reasonable opportunity, which was provided through the pre-assessment notice. The Court noted that the notice was received on 12.09.2016, with the 15-day window ending on 27.09.2016, while the order was passed on 30.09.2016. The petitioner's reasons for the delay in filing objections were supported by an unrebutted affidavit. Additionally, the proviso to Section 22(4) of the 2006 Act mandates a personal hearing, which was not provided in this case.

The Court emphasized that the Circular cannot dilute statutory provisions, especially when it mandates personal hearing irrespective of the dealer's choice. The absence of a personal hearing rendered the order illegal. Consequently, the impugned order was set aside, granting respondent No.1 the liberty to redo the assessment. The petitioner was directed to present objections and relevant material on 01.03.2017, followed by a fresh order with a personal hearing. The Court ordered a speaking order to be provided to the petitioner, disposing of the Writ Petition with no costs.