2019 (9) TMI 744 - HC - VAT and Sales Tax

Principles of Natural Justice - ex parte order - KVAT Act - whether Ext.P3 order satisfies the requirement of providing personal hearing to petitioner while disposing of Ext.P2 appeal or not? HELD THAT - The petitioner, referred to the date of cancellation i.e. 3.7.2015, cannot be presumed to be doing business at the address shown in Ext.P2 appeal. The reason that in spite of affording opportunity, the petitioner did not produce books of account is untenable is liable to be set aside. It is further contended by her that all other covers sent by the department to the address shown in the memorandum of appeal were received and only an excerption to the notice sent by the second respondent is disputed. She presses for dismissing the writ petition. The order in Ext.P3 could be set aside as violative of principles of natural justice. Hence Ext.P3 order is set aside - matter is remitted to the second respondent for consideration and disposal in accordance with law - petition allowed by way remand.

Summary

Issues:
Challenge to orders Exts.P3 and P3(a) as illegal and violative of natural justice under KVAT Act.

Analysis:
The petitioner challenged the orders Exts.P3 and P3(a) issued by the second respondent as illegal and violative of principles of natural justice under the Kerala Value Added Tax (KVAT) Act. The petitioner, dissatisfied with the assessment order for the year 2012-2013, filed a statutory appeal in Ext.P2 before the second respondent. However, the second respondent dismissed the appeal through Ext.P3 order, leading to the filing of a writ petition.

Ex Parte Order Issue:
The petitioner's counsel contended that the order in Ext.P3 was ex parte, emphasizing the petitioner's right to a personal hearing during the appeal process. The counsel pointed out that despite multiple notices sent to the appellant's provided communication address, the appellant did not appear for hearings, leading to the disposal of the case based on merits. The counsel argued that the second respondent should have sent notices to the actual business location instead of the old address, requesting an opportunity for a personal hearing and setting aside the Ext.P3 order for reconsideration.

Violation of Natural Justice:
The petitioner's counsel further argued that sending notices to the old address violated the principles of natural justice, as the appellant had discontinued business and canceled registration at that location. The counsel presented evidence of business discontinuation and registration cancellation, indicating that the address in Ext.P2 appeal was no longer valid for communication. The counsel contended that the petitioner not producing books of account was not a valid reason for an ex parte decision. The petitioner's counsel urged for the dismissal of the writ petition.

Court Decision:
The court acknowledged the petitioner's entitlement to a personal hearing during the appeal process. Considering the evidence of business discontinuation and registration cancellation, the court found the Ext.P3 order to be violative of natural justice. Consequently, the court set aside the Ext.P3 order and remitted the matter back to the second respondent for reconsideration and disposal in accordance with the law. The court directed the petitioner to appear before the second respondent with necessary documents for the appeal process, ensuring a fair opportunity for a hearing. The court instructed the second respondent to expedite the consideration and disposal of the appeal, preferably by a specified date.

This detailed analysis of the judgment highlights the issues raised, arguments presented, and the court's decision, ensuring a comprehensive understanding of the legal aspects involved in the case.