2019 (7) TMI 1122 - HC - VAT and Sales Tax

Principles of Natural Justice - various issues not been considered by the Deputy Commissioner of Sales Tax in his impugned order - HELD THAT - The impugned order dated 28 February 2018 passed by the Deputy Commissioner of Sales Tax does not examine much less discuss any of the above or any issues incidental thereto. In the aforesaid circumstances, it is evident that the aforesaid submissions which are a part of the Petitioner's written submissions dated 27 February 2018 have not been considered as is evident from the impugned order dated 28 February 2018. Thus the impugned order is in breach of principles of natural justice. It is a clear case of a flaw in the decision making process, which compels us to exercise our writ jurisdiction in the present facts and not relegate the Petitioner to an alternative remedy under the MVAT Act, 2002. It would be in the interest of justice that the impugned order dated 28 February 2018 of the Deputy Commissioner of Sales Tax is set aside and he is directed to pass a fresh order after hearing the Petitioner - petition allowed by way of remand.

Summary

Issues:
1. Challenge to assessment order imposing tax
2. Jurisdiction of the State to levy tax under MVAT Act
3. Goods imported from Gujarat for works contract
4. Classification of works contract under residual entry

Analysis:
1. The petitioner challenged the assessment order imposing tax, arguing that the sale of goods in the work contract took place outside Maharashtra, and a substantial portion of goods were imported from Gujarat. The Assessing Officer had not considered these aspects, leading to a breach of natural justice principles. The High Court found the impugned order to be flawed in decision-making, warranting writ jurisdiction intervention. The court set aside the order and directed a fresh hearing for the petitioner, leaving all contentions open for both sides.

2. The High Court noted that the Deputy Commissioner's order did not address the issues of goods sale location, importation from Gujarat, and incorrect classification of the works contract. As a result, the court found a lack of consideration for the petitioner's submissions, indicating a breach of natural justice principles. The court exercised its writ jurisdiction to set aside the order and instructed a fresh decision after hearing the petitioner, emphasizing that the Assessing Officer's adjudication should be based on existing records, with notice required for any new issues raised by the Revenue.

3. The court emphasized that the Deputy Commissioner's order lacked examination and discussion of crucial issues raised by the petitioner, leading to a violation of natural justice principles. Consequently, the court set aside the order and directed a fresh decision after affording the petitioner a hearing. The court clarified that all contentions from both sides should be considered, with any new issues raised by the Revenue requiring notice to the petitioner for a fair opportunity to respond.

4. The High Court found that the Deputy Commissioner's order failed to address key issues raised by the petitioner, indicating a breach of natural justice principles. Consequently, the court set aside the order and directed a fresh decision after allowing the petitioner a hearing. The court specified that the Assessing Officer's adjudication should be based on existing records, with any new issues raised by the Revenue necessitating notice to the petitioner for a fair chance to address them.