2019 (1) TMI 612 - HC - VAT and Sales Tax

Principles of natural justice - petitioner is not a registered dealer - opportunity of personal hearing not provided - Held that - Considering the fact that the assessment order was passed based on the reason that the petitioner did not file any reply and further considering the fact that the Assessing Officer imposed penalty, without affording an opportunity of personal hearing, this Court is of the view that interest of both parties will be protected, if the following order is passed in this writ petition by putting the petitioner on some terms - matter is emitted back to the Assessing Officer to redo the assessment - petition allowed by way of remand.

Summary

Issues:
1. Assessment order challenged for lack of opportunity and personal hearing.
2. Allegation of notice served at a closed business location.
3. Dispute over principles of natural justice and partner's responsibility.

Analysis:
The petitioner challenged the assessment order dated 15.10.2018 for the assessment year 2015-2016, alleging lack of opportunity and personal hearing. The main grievance was that being an unregistered dealer, the order was passed without sufficient opportunity to present their case. It was contended that the notice of proposal was served at a location where the petitioner had already closed the business, requesting another chance to be heard. The respondents argued that the notice was served on one of the partners of the petitioner Firm, maintaining that natural justice principles were not violated.

Upon hearing both sides, the court noted that the notice of proposal indicated the petitioner as an unregistered dealer who had vacated the premises, with the notice being served at the same address. Although one partner received the notice, they failed to inform the petitioner firm to respond. As the petitioner did not file a reply before the Assessing Officer, the court refrained from delving into the merits of the case. The assessment order was based on the petitioner's failure to reply and the imposition of a penalty without a personal hearing.

In light of the circumstances, the court set aside the impugned order and remitted the matter back to the Assessing Officer with specific terms. The petitioner was directed to file a reply with 10% tax liability payment within three weeks. Upon receipt, the respondents were to schedule a personal hearing, following which the Assessing Officer would issue the assessment order within six weeks. No costs were imposed, and the connected miscellaneous petition was closed, ensuring the interests of both parties were protected through a fair process.