2018 (10) TMI 1456 - HC - VAT and Sales Tax

Validity of assessment order - the Assessing Officer has not afforded an opportunity of personal hearing - principles of natural justice - Held that - Admittedly, the petitioner has not filed their reply to the said second notice. However, the reason for not filing the reply within the time is explained in the affidavit filed in support of the writ petition, by stating that during the relevant time, the Managing Director/Designated Partner was suffering from advance stage of cancer and her only son viz., other Director/Designated Partner, who was actually in-charge of the business and over all management, was totally pre-occupied with the treatment of his ailing mother, as a result of which the petitioner was unable to file the reply/objections to the notice of proposal. The petitioner was reasonably prevented from making the reply to the second notice dated 14.11.2017 in time and therefore, such non-filing of reply resulting in passing an adverse order, when found to be with some justifiable cause, this Court is of the considered view that one more opportunity can be given to the petitioner for filing the reply to the said notice dated 14.11.2017, so that the Assessing Officer can pass a fresh order of assessment on merits and in accordance with law, after affording an opportunity of personal hearing to the petitioner. The matter is remitted back to the Assessing Officer to re-do the assessment - petition allowed by way of remand.

Summary

Issues:
Violation of principles of natural justice in assessment order for the assessment year 2012-2013.

Analysis:
The petitioner challenged the assessment order dated 24.01.2018 for the assessment year 2012-2013, primarily on the grounds of a violation of principles of natural justice. The petitioner's counsel argued that the impugned order should be set aside as the respondent failed to consider the reason for not filing a reply to the second notice and also did not provide an opportunity for a personal hearing. On the other hand, the Government Advocate contended that since the petitioner did not respond to the second notice, the Assessing Officer was justified in completing the assessment based on the reply already filed.

The Assessing Officer had issued the first notice of proposal on 05.10.2017, to which the petitioner responded on 16.10.2017. Subsequently, a second notice was issued on 14.11.2017, requesting additional details, to which the petitioner did not reply. The petitioner explained in an affidavit that the delay was due to the Managing Director's illness with cancer and the other Director being preoccupied with her treatment. Supporting documents, like the PET-CT report, were provided to substantiate this claim. The Court found that the petitioner had a justifiable reason for not responding to the second notice within the stipulated time.

In light of the circumstances, the Court allowed the writ petition, setting aside the impugned order. The matter was remitted back to the Assessing Officer with specific conditions: the petitioner was given two weeks to respond to the second notice, following which a personal hearing would be scheduled. The Assessing Officer was directed to pass fresh orders within four weeks after the personal hearing. The Court clarified that it was not expressing any opinion on the assessment's merits, leaving it to the respondent to decide. No costs were awarded, and the connected miscellaneous petition was closed.