2019 (7) TMI 1292 - HC - VAT and Sales Tax

Validity of assessment order - grievance of the petitioner is that the impugned orders both dated 29th March, 2019 are nonspeaking orders - principles of natural justice - HELD THAT - It would be evident that the impugned orders have not dealt with the petitioner's submissions. In the above view, no useful purpose would be served by relegating the petitioner's to file an appeal to the statutory Authorities under the Act. This is so as the decision making process is flawed as it does not consider the petitioner's submissions. Unless the petitioner's submissions are dealt with by the Assessing Officer at the original stage, the petitioner would be handicapped in pleading its case before the Appellate Authority as it would have no clue as to why the submissions of the petitioner were not accepted. Besides, the Appellate Authority would also be at a loss to know the exact reasons which weighed with the original Authority to discard the submissions made by the petitioner. Both the impugned orders set aside - the assessment for the period 2010-11 restored to the Assessing Officer for fresh consideration under the MVAT and CST Act - petition allowed.

Summary

Issues:
Challenge to assessment orders under MVAT Act and CST Act for the year 2010-11. Petitioner's grievance regarding non-speaking orders lacking reasons. Consideration of petitioner's submissions by the Assessing Officer. Adherence to principles of natural justice in assessment process.

Analysis:
The petition challenged two assessment orders dated 29th March, 2019 under the Maharashtra Value Added Tax Act, 2002 (MVAT Act) and the Central Sales Tax Act, 1956 (CST Act) for the year 2010-11. The respondent argued that the court should not entertain the petition due to the availability of a statutory remedy of appeal under the Acts. However, the petitioner contended that the impugned orders were non-speaking as they did not provide reasons for not accepting the petitioner's submissions, thus breaching principles of natural justice.

Upon reviewing the impugned orders, it was noted that the petitioner, an online marketplace, argued that it merely provided a platform for buyers and sellers to transact independently, exempting it from liability under the Information Technology Act, 2002. The impugned orders failed to address these submissions and incorrectly concluded that the company engaged in buying and selling goods, deeming it a dealer under the MVAT Act, 2002. The court found that the decision-making process was flawed as the Assessing Officer did not consider the petitioner's submissions, hindering the petitioner's ability to present its case before the Appellate Authority effectively.

In light of these deficiencies, the court set aside both impugned orders and directed the Assessing Officer to reconsider the assessment for the period 2010-11 under the MVAT and CST Acts, ensuring compliance with the principles of natural justice. The court emphasized the necessity for the Assessing Officer to address and provide reasons for accepting or rejecting the parties' submissions to facilitate a fair and informed appellate process. Ultimately, the petition was allowed in favor of the petitioner, granting relief in the specified terms.