2019 (1) TMI 768 - HC - VAT and Sales Tax

Validity if reassessment order - validity of remand order - it was specifically observed by the learned Single Jude that liberty should be given to the petitioner to produce documents on which petitioner intended to rely upon - principles of natural justice - Held that - The appellant would fall under second exception namely there being violation of principles of natural justice namely when matter came to be remanded by the learned Single Judge with a direction to the Assessing Authority to consider the additional documents or additional evidence that would be placed by the assessee it was incumbent upon the Assessing Officer to consider the same by either accepting or rejecting. In fact in the reassessment order dated 22.06.2018 at internal page No.2 we find there is reference to RA bills produced by the assessee for verification on 07.03.2018 and also other documentary evidences. In the absence of such exercise having been undertaken by the assessing officer, we are of the considered view that this would be in clear violation of direction issued by this court or in otherwords there has non consideration of said material while passing the order dated 22.06.2018 and thereby principles of natural justice had been given a complete go-bye and as such order dated 22.06.2018 the first respondent authority would not be sustainable. The matter will have to be remitted back to first respondent authority for redetermination by considering entire material placed by petitioner - appeal allowed by way of remand.

Summary

Issues:
1. Interpretation of directions given by the learned Single Judge in a writ petition.
2. Compliance with the directions by the Assessing Authority in reassessment proceedings.
3. Violation of principles of natural justice in reassessment order.
4. Entitlement to relief in the intra court appeal.

Interpretation of Directions:
The appeal was against an order passed in a writ petition related to reassessment under the KVAT Act. The Single Judge had remitted the matter back to the Assessing Authority with directions for reconsideration. The appellant contended that the Assessing Officer did not comply with the directions and sought to quash the reassessment order. The High Court noted that the Assessing Authority failed to consider additional documents filed by the petitioner as directed by the Single Judge, including running account bills. As a result, the reassessment order was set aside due to non-compliance with the court's directions.

Compliance with Directions:
The High Court emphasized the importance of the Assessing Authority considering additional evidence submitted by the assessee as directed by the court. The court found that the Assessing Authority did not fulfill its obligation to review the documents provided by the petitioner, leading to a violation of the principles of natural justice. The court held that the failure to consider the material while passing the reassessment order amounted to a complete disregard for principles of natural justice. Consequently, the reassessment order was deemed unsustainable, and the matter was remitted back to the Assessing Authority for a fresh determination based on all materials presented by the petitioner.

Violation of Principles of Natural Justice:
In the absence of the Assessing Authority's proper consideration of the additional documents and evidence submitted by the petitioner, the court concluded that there was a clear violation of the principles of natural justice. The court highlighted that the Assessing Authority must have either accepted or rejected the documents provided by the assessee to make an informed decision. As the Assessing Authority failed to undertake this essential review, the court found that the principles of natural justice were compromised, necessitating the setting aside of the reassessment order and a fresh determination based on all materials presented by the petitioner.

Entitlement to Relief:
The High Court ruled in favor of the appellant in the intra court appeal, allowing the writ petition in part. The reassessment order was quashed, and the matter was remitted back to the Assessing Authority for a fresh adjudication while considering all the written submissions and annexures filed by the petitioner. The appellant was directed to appear before the Assessing Authority without further notice, and the reassessment proceedings were to be concluded expeditiously within four weeks from the specified hearing date. The amount deposited by the appellant would be subject to the outcome of the reassessment proceedings.

This detailed analysis of the judgment addresses the issues involved and provides a comprehensive understanding of the legal proceedings and decisions made by the High Court.