2017 (4) TMI 577 - HC - VAT and Sales Tax

Principles of natural justice - materials relied on by the Assessing Authority were not furnished to the petitioner - Held that - when the respondent relied on certain materials collected from import data for passing the assessment, he has to furnish the same to the assessee so that the assessee can file a suitable objection/ reply to the allegations made in the SCN - the impugned orders of assessment cannot be sustained solely on the ground of violation of the principles of natural justice and consequently, the matter has to go back to the Assessing Authority for redoing the assessments once again - petition allowed by way of remand.

Summary

Issues:
Challenging assessment orders for Assessment Years 2014-15 and 2015-16 based on violation of principles of natural justice.

Analysis:
The petitioner, a Private Limited Company engaged in importing and selling products, contested assessment orders due to lack of furnishing materials by the Assessing Authority despite requests. The petitioner sought details from the respondent regarding the basis of the assessment but did not receive them. The respondent issued a notice for a personal hearing without providing the requested details, leading to the passing of the impugned assessment orders.

The respondent argued that the petitioner had been given sufficient opportunities, including a personal hearing, and contended that there was no breach of natural justice principles. However, the petitioner's counsel emphasized that without the necessary materials, the petitioner could not effectively respond to the allegations, stressing the importance of furnishing all relied-upon materials to ensure a fair hearing.

The court acknowledged that the assessment orders were based on import data and highlighted the duty of the Assessing Authority to provide such crucial materials to the assessee for a proper objection. Merely conducting a personal hearing was deemed insufficient; effective compliance with natural justice required furnishing all relevant materials beforehand. Despite the petitioner's prior requests, the respondent failed to provide the necessary details, resulting in the assessment orders being confirmed without the petitioner's access to crucial information.

The court concluded that the impugned assessment orders could not stand due to the violation of natural justice principles. Citing a similar case precedent, the court set aside the orders and directed the matter to be reconsidered by the Assessing Authority after providing the petitioner with the requested materials and conducting a fresh personal hearing. The respondent was instructed to complete this process within eight weeks from the date of the court's order, without imposing any costs on the parties involved.