2019 (1) TMI 2 - HC - VAT and Sales Tax

Principles of natural justice - failure to consider the objections resulted - opportunity of personal hearing also not provided to the petitioner - Held that - The notices of proposal were sent to the assessee and in response to the notices, the assessee has filed a detailed reply opposing the proposal. The Assessing Officer in fact extracted the entire objections raised by the petitioner in the impugned orders. However, he has not chosen to give his finding as to how those objections are not sustainable - Further in this case, admittedly, the Assessing Officer has not chosen to give an opportunity of personal hearing. In Circular No.7 of 2014, wherein, it is stated that providing such opportunity of personal hearing is mandatory, not withstanding the fact whether such opportunity was sought for by the Assessee or not - Therefore, it is bounden duty of the Assessing Officer to give such opportunity of personal hearing, more particularly, when he is proposing to impose penalty on the assessee. As such opportunity is not given to the petitioner in this case, the impugned orders are liable to be set aside, on this ground as well. The matter is remitted back to the Assessing Officer to redo the assessment, by considering the objections raised by the petitioner and also by providing an opportunity of personal hearing to them - petition allowed by way of remand.

Summary

Issues:
Challenge against assessment orders based on Enforcement Wing report without considering objections and lack of personal hearing opportunity.

Analysis:
The petitioner challenged assessment orders for various assessment years, contending that the Assessing Officer solely relied on the report from Enforcement Wing Officials, ignoring objections raised and violating principles of natural justice. The petitioner argued that failure to consider objections and lack of a personal hearing before imposing penalties rendered the orders unsustainable. The counsel cited a previous court decision to support their argument.

The respondent, through the Additional Government Pleader, acknowledged the petitioner's admission of liability and partial tax payment but did not dispute the Assessing Officer's failure to address objections or provide a personal hearing. Both parties' arguments were heard by the court.

The court noted that the petitioner had responded to the proposal notices with detailed objections, which were not adequately addressed by the Assessing Officer in the impugned orders. The Assessing Officer primarily relied on the petitioner's admission during inspection, disregarding the objections raised. The court emphasized the Assessing Officer's duty to independently assess the situation, uninfluenced by external reports or instructions.

Referring to precedent cases, the court highlighted the quasi-judicial nature of Assessing Officers and their obligation to exercise independent judgment. Failure to provide a personal hearing, as mandated by a circular, further weakened the validity of the impugned orders. Consequently, the court allowed the writ petitions, setting aside the orders and directing a reassessment by considering objections and providing a personal hearing within six weeks.

In conclusion, the court's decision emphasized the importance of due process, independent assessment by Assessing Officers, and the mandatory nature of providing a personal hearing, ultimately leading to the setting aside of the impugned orders for reassessment.