2017 (3) TMI 1489 - HC - VAT and Sales Tax

Validity of assessment order - natural justice - no Notice of hearing has ever been given and ex-parte order has been passed - Held that - Notice has been served upon the guarantors of the petitioners. Such type of service of Notice is no Notice in the eye of law, especially when tax liability is to be imposed upon the petitioners. The minimum requirement is that Notice of hearing should be served upon the Assessee before passing such order against the assessee - This minimum requirement has not been fulfilled in this case as a result of which work load of this court has unnecessarily been increased and therefore, such type of matters should be remanded - appeal allowed by way of remand.

Summary

Issues:
1. Challenge to order dated 9th September, 2014, Notice of Demand, and Certificate Proceeding due to lack of hearing opportunity.
2. Validity of service of Notice on guarantors instead of the petitioners.
3. Failure to follow due process in imposing tax liability without proper Notice to the Assessee.
4. Remand of the matter for fresh decision by the Deputy Commissioner, Commercial Taxes, Gumla Circle, Gumla.

Analysis:
1. The writ petition challenged the order dated 9th September, 2014, Notice of Demand, and Certificate Proceeding on the grounds of not receiving any Notice of hearing and the ex-parte order being passed without proper proceedings for reassessment. The court noted that the Deputy Commissioner had passed the order without serving Notice on the petitioners but on the guarantors instead, which was deemed insufficient in the eyes of the law, especially when imposing tax liability. The court emphasized the necessity of serving Notice to the Assessee before making any such decision. As a result, the court quashed the order, Notice of Demand, and Certificate Proceeding related to the period 2008-09 and remanded the matter back to the Deputy Commissioner for fresh consideration after providing the petitioners with a proper opportunity to be heard.

2. The court highlighted the importance of following due process in tax matters and ensuring that the Assessee is properly notified and given a chance to present their case before any decision is made. The Deputy Commissioner's failure to adhere to these basic requirements led to the court's decision to set aside the previous order and initiate a fresh decision-making process with full consideration of the Assessee's rights.

3. The court directed the Deputy Commissioner to decide afresh on the tax liability of the petitioners after providing them with a fair opportunity to present their case and submit any evidence in support of their position. The court stressed the need for an independent decision-making process without being influenced by the previous order or proceedings that were quashed by the court. The petitioners were granted the liberty to raise all issues before the Deputy Commissioner and submit any evidence necessary for the proper determination of their tax liability.

4. In conclusion, the court allowed the petition and disposed of it with the direction for the Deputy Commissioner to conduct a fresh assessment considering all relevant factors and ensuring that the petitioners are given a fair chance to be heard and present their case effectively.