2017 (5) TMI 1397 - HC - VAT and Sales Tax

Natural justice - validity of reassessment order - it is the case of the petitioner that the petitioner gave their written submission and wanted personal hearing, but this personal hearing has been denied to them and, therefore, the imposition of liability without granting them opportunity of hearing is unsustainable - Rule 24 of the Rules - Held that - the Rule only contemplates issuance of show cause notice and hearing by granting opportunity of submission of documents. There is nothing in this rule which suggests that a personal hearing as claimed by the petitioner has to be granted - it is not a case where per se on the basis of the material available on record, a categorical finding can be recorded that the petitioner was not granted any opportunity of hearing and ex parte order was passed behind their back. On the contrary, the documents do indicate prima facie that opportunity of hearing was extended to the petitioner and the petitioner through their counsel did avail of this opportunity. This is not a fit case where exercising extra-ordinary jurisdiction of this Court, the matter could be interfered with right away in a petition under Article 226 of the Constitution, instead it is a case where petitioner should take recourse to the statutory remedy of appeal available where all these issues can be sorted out on a decision taken - petition dismissed - decided against petitioner.

Summary

Issues:
Challenging re-assessment orders under Bihar Value Added Tax Act for financial years 2011-12 and 2012-13; Maintainability of writ petition without exhausting appeal remedy; Allegation of lack of opportunity of hearing; Dispute over imposition of tax and penalty; Interpretation of Rule 24 of Bihar Value Added Tax Rules, 2005; Adherence to principles of natural justice.

Analysis:
The judgment pertains to a writ petition challenging re-assessment orders under the Bihar Value Added Tax Act for the financial years 2011-12 and 2012-13. The petitioners contested the imposition of tax and penalty without being granted proper opportunity of hearing, invoking the extra-ordinary jurisdiction of the Court under Articles 226 and 227 of the Constitution. The respondents argued that the petitioners had been given a fair hearing, as evidenced by documents and materials on record, and relied on a Supreme Court judgment to support their stance.

The Court examined Rule 24 of the Bihar Value Added Tax Rules, 2005, which outlines the procedure for hearings under Sections 32 and 33 of the Act. The Rule mandates the issuance of show cause notices and the opportunity for the accused to rebut accusations, without explicitly requiring a personal hearing. The Court scrutinized the proceedings in this case, noting that the petitioners were provided with notices, submitted objections through their counsel, and participated in the hearings. The Court found no merit in the petitioner's claim of lack of opportunity for a hearing.

Despite the petitioner's assertion that they were not served with the assessment orders and were unaware until coercive steps were initiated, the Court observed that the petitioner had acknowledged certain notices and communications. The Court highlighted the petitioner's internal restructuring as a possible reason for misplacing important documents. Ultimately, the Court concluded that the petitioners had been granted an opportunity of hearing and dismissed the writ petition, emphasizing the availability of the statutory remedy of appeal for further redressal.

The Court upheld the respondents' objection regarding the availability of the statutory alternative remedy, affirming that the matter should be addressed through the appeal process. The Court's decision to dismiss the petition was based on the finding that the principles of natural justice had been followed, with a provision for the petitioners to raise objections in the appeal without prejudice. The judgment concluded by dismissing the writ petition while allowing the petitioners to pursue their objections through the statutory appeal process.