2019 (8) TMI 947 - HC - VAT and Sales Tax

Validity of assessment order - Principles of natural justice - orders are ex-parte because petitioner did not respond to the notice - Bihar VAT Act - HELD THAT - There is no dispute that the petitioner was served through e-mail in compliance of the provision present in rule 50(1)(d) of the Rules framed under the Act which, inter alia, also provides other forms of service. It is again not in dispute that there is no physical service of notice as per the other modes so prescribed under the Rules . It is also not borne from the records that the petitioner was deliberately avoiding a service of notice. We have thus, no reasons to disbelieve the petitioner of having overlooked his e-mail because it has only enhanced his taxing liability. The case in hand is with an exception because in the present case, form C was available with the petitioner and it is but for the ex parte hearing, that the assessee could not produce the required form C in support of his plea of inter-State sales - While thus noting the submission of Mr. Vikash Kumar that it is in the circumstances as existing on the date of passing of the assessment order that the taxable turnover was assessed, we are yet persuaded to quash the said assessment orders not because it suffers from any infirmity on merits because we have not examined the assessment order on merits rather because of the availability of the form C and which requires to be taken into account before the assessment orders are passed. Petition allowed.

Summary

Issues:
Assessment order passed by assessing authority challenged in two writ petitions for the periods 2016-17 and 2017-18, Ex-parte orders due to non-response to notice by e-mail, Validity of service by e-mail, Availability of form C to support inter-State sales, Right of due representation, Remand for fresh consideration by assessing authority.

Analysis:

1. Ex-parte Orders and Service by E-mail:
The judgment concerns two writ petitions challenging assessment orders for the periods 2016-17 and 2017-18, which were passed ex-parte due to non-response to notice by e-mail. The petitioner, represented by counsel, admitted to the alternative remedy and service by e-mail. The State contended that the orders were ex-parte as the petitioner did not respond to the e-mailed notice, which was considered valid under the Bihar Value Added Tax Act, 2005. The court acknowledged the ex-parte nature of the orders but noted that the petitioner's failure to respond to the e-mail notice was not deliberate avoidance.

2. Availability of Form C for Inter-State Sales:
The petitioner's counsel argued that the petitioner could have explained the inter-State sales with the aid of form C if given the opportunity. The court observed that the petitioner's failure to produce form C during the ex-parte proceedings was due to overlooking the e-mail, which could have reduced the tax liability. The court upheld the contention that there was no deliberate laches or avoidance on the petitioner's part regarding the notice of the assessment proceedings.

3. Right of Due Representation and Remand:
The court referred to previous cases and highlighted the importance of due representation before passing ex-parte orders. It emphasized that unless there is deliberate avoidance of service, a casual default should not lead to shutting the doors for representation. The court, considering the availability of form C and principles of substantive justice, remanded the matter for fresh consideration by the assessing authority with due opportunity for the petitioner to present form C and explain the inter-State sales. The judgment cited relevant Supreme Court cases allowing the production of such forms at any stage of proceedings.

4. Quashing of Assessment Orders and Remittal:
Based on the above analysis, the court quashed the assessment orders for the periods 2016-17 and 2017-18 and the impugned demand notices. The matter was remitted to the assessing authority for fresh consideration and passing of a new order in accordance with the law. The petitioner was directed to appear before the assessing authority on a specified date and cooperate in the disposal of the matter. Ultimately, the writ petitions were allowed with the directions and observations provided in the judgment.