2019 (8) TMI 1229 - HC - VAT and Sales Tax

Principles of natural justice - Service of notice - change of place of business of assessee - ex-parte assessment order - exparte assessment orders were passed for assessment year 2012-13 and 2013- 14 both under Act 2008 and CST Act and the said assessment order have been passed ex-parte without any service of notice upon the petitioner or opportunity of being heard provided therein - expiry of period of limitation prescribed under Section 29 (6) of the Act - assessment year 2013-14 - U.P. Act 2008 and CST Act. HELD THAT - The service of notice has been made by affixation on the earlier address of the petitioner in spite of the fact being within their knowledge that the petitioner have changed the place of business to the new address but still with a mind set of passing the order hurriedly passed an ex-parte order under Act 2008 and CST Act creating huge demand against the petitioner. The record further reveals that the notice by affixation has been made on the earlier address of the petitioner even without satisfying the conditions as mentioned in the Rule. Even after service of notice by affixation, no such report has been brought on record as provided under the Rules - In spite of the fact being within the knowledge of the respondent that the petitioner has changed the place of business to the new address still notice by affixation has been made in the earlier address. The impugned order are hereby set aside - petition allowed.

Summary

Issues Involved:
1. Quashing of ex-parte assessment orders for the assessment years 2012-13 and 2013-14 under U.P. VAT Act and CST Act.
2. Jurisdiction and adherence to the principles of natural justice.
3. Period of limitation for passing assessment orders.
4. Service of notice and compliance with Rule 72 of U.P. VAT Rules.
5. Repeated litigation and imposition of costs on the respondents.

Detailed Analysis:

1. Quashing of Ex-Parte Assessment Orders:
The petitioner sought to quash the ex-parte assessment orders dated 31st March 2017 for the assessment years 2012-13 and 2013-14 under the U.P. VAT Act and CST Act. The court noted that the orders were passed without proper service of notice or an opportunity for the petitioner to be heard, which violated the principles of natural justice.

2. Jurisdiction and Natural Justice:
The petitioner argued that the impugned orders were passed without jurisdiction and in gross violation of the principles of natural justice. The court agreed, emphasizing that the respondents failed to serve notice at the petitioner's new address despite being informed of the change, leading to ex-parte orders.

3. Period of Limitation:
The petitioner contended that the assessment orders for the year 2012-13 were passed beyond the period of limitation prescribed under Section 29(6) of the U.P. VAT Act. The court found that the orders, dated 31st March 2017, were indeed passed after the limitation period ended on 30th September 2016. Consequently, these orders were quashed as they were barred by limitation.

4. Service of Notice and Compliance with Rule 72:
The court scrutinized the service of notice procedures under Rule 72 of the U.P. VAT Rules. It was found that the respondents served notice by affixation at the petitioner's old address, despite knowing the business had moved to a new location. The court highlighted previous judgments where similar issues were raised, emphasizing that the respondents repeatedly ignored the mandatory requirement of serving notice by registered post in addition to personal service.

5. Repeated Litigation and Imposition of Costs:
The court noted that this was the third round of litigation on similar grounds, where previous ex-parte assessment orders were quashed with costs imposed on the respondents. The court criticized the respondents for their persistent disregard of legal procedures and the principles of natural justice, which forced the petitioner into repeated litigation. The court reiterated the need for proper service of notice and adherence to legal provisions, setting aside the impugned orders for the year 2013-14 as well and allowing the respondents to initiate fresh proceedings in accordance with the law.

Conclusion:
The writ petition was allowed, quashing the impugned ex-parte assessment orders for the years 2012-13 and 2013-14. The court underscored the importance of following proper legal procedures and the principles of natural justice, directing the respondents to serve notice at the petitioner's current address if they choose to initiate new proceedings.