2019 (8) TMI 949 - HC - VAT and Sales Tax

Principles of natural justice - grievance of the Petitioner is that the impugned orders have been passed in breach of principles of natural justice inasmuch as no sufficient opportunity to present their case was given to the Petitioner - HELD THAT - It is an undisputed position that the Petitioner s documents relating to the period 2014-2015 and necessary for the Petitioner's assessment in particular to support its claim for branch transfer and exhibition activity were in the possession of the department with effect from 18 April 2017. In spite of the Petitioner s seeking copies of the same, the same were not granted by the Assessing Officer, as he did not call for the necessary proceedings and papers from the Assistant Commissioner of Sales Tax, Investigation Branch, Bhayander, who was in possession of the papers relating for the Assessment Year 2014-15 - It was impossible for the Petitioner to establish its claim for branch transfer as also the exhibition activity as the documents relevant, according to the Petitioner, in support of its two claims, were amongst the documents which were in possession of the Assistant Commissioner of Sales Tax, Investigation Branch, Bhayander. This non-giving of documents certainly handicapped the Petitioner in the assessment proceedings - This certainly amounts to a breach of principles of natural justice. There is a flaw in the decision making process which goes to the root of the matter - impugned order set aside - petition allowed.

Summary

Issues:
Challenge to orders under MVAT Act and CST Act for the period 2014-2015; Breach of principles of natural justice; Denial of opportunity to present case; Non-granting of documents for assessment; Flaw in decision-making process.

Analysis:

1. Challenge to Orders under MVAT Act and CST Act:
The petition under Article 226 of the Constitution challenges two orders dated 14 March 2019 passed by the Deputy Commissioner of State Tax under the Maharashtra Value Added Tax Act, 2002 (MVAT Act) and the Central Sales Tax Act, 1956 (CST Act) for the period 2014-2015.

2. Breach of Principles of Natural Justice:
The petitioner's grievance is that the impugned orders were passed in breach of principles of natural justice as they were finalized without giving the petitioner sufficient opportunity to present their case. The petitioner's representative attended a hearing on 11 March 2019, requested an adjournment, and asked for relevant documents which were with the Assistant Commissioner of Sales Tax, Investigation Branch, Bhayander. However, the assessment was completed without providing these documents, denying the petitioner the chance to establish its case.

3. Non-Granting of Documents for Assessment:
The respondents admitted that the petitioner had requested documents necessary for assessment, but the only reason given for not providing them was the assessment getting time-barred. Despite the petitioner's repeated requests since 2017, the necessary documents were not granted, hindering the petitioner from supporting its claims for branch transfer and exhibition activity. This failure to provide crucial documents amounted to a breach of natural justice.

4. Flaw in Decision-Making Process:
The Court found a fundamental flaw in the decision-making process, considering the denial of essential documents as a critical issue. Consequently, the Court set aside the impugned orders under both the MVAT Act and CST Act, directing the restoration of assessment proceedings to the Deputy Commissioner of State Tax for fresh consideration after providing all relevant documents to the petitioner.

In conclusion, the High Court allowed the petition, emphasizing the importance of adhering to principles of natural justice and ensuring that parties have a fair opportunity to present their case. The judgment highlights the significance of providing necessary documents for assessment procedures and the consequences of failing to do so, ultimately leading to a flaw in the decision-making process that warrants setting aside the impugned orders for fresh consideration.