2019 (9) TMI 1212 - HC - VAT and Sales Tax

Principles of natural justice - Service of notice - case of petitioner is that the petitioner was not afforded an opportunity of being heard by the assessing authority - Validity of assessment order - imposition of penalty - KVAT Act - HELD THAT - The notices were sent to the addresses furnished by the consignor, the owner of the vehicle as also the driver of the vehicle. The notices sent to the petitioner, owner of the vehicle and the driver were returned by the postal authorities with the endorsement not known and no such addressee in the door number respectively. This would indicate that the petitioner and the driver of the vehicle had either furnished a wrong address to the department or had since changed their address of residence from what had earlier been furnished to the authorities while obtaining the transit pass. It cannot be said that the authorities had not issued a notice to the address of the petitioner and that the non-receipt of the notice by the petitioner was on account of any latches on the part of the VAT Authority. The impugned orders in Exts.P1 and P2 do not suffer from any violation of the rules of natural justice - Petition dismissed.

Summary

Issues:
1. Non-compliance with the rules of natural justice in passing assessment and penalty orders.

Analysis:
The petitioner challenged the assessment and penalty orders under the Kerala Value Added Tax Act, alleging a lack of opportunity to be heard before the orders were issued. The petitioner, one of the three persons jointly liable, owned the vehicle involved in transporting Liquefied Petroleum Gas for HPCL. The main contention was the violation of natural justice rules due to the absence of a hearing before the orders were passed.

The High Court considered the submissions from both parties. It was noted that notices were sent to the addresses provided by the consignor, the vehicle owner (petitioner), and the driver, but the notices sent to the petitioner and the driver were returned as "not known" and "no such addressee," suggesting incorrect or changed addresses. The court observed that the authorities did send notices to the petitioner's address, indicating no fault on their part for non-receipt.

Consequently, the court held that there was no breach of natural justice rules in the assessment and penalty orders. It was also highlighted that the petitioner had the option to appeal against the orders, making it unnecessary to invoke Article 226 of the Constitution of India. As a result, the writ petition was dismissed. The court directed that recovery actions against the petitioner be stayed for a month to allow time for an appeal to be filed before the Appellate Authority.

In conclusion, the High Court found that the orders did not infringe upon natural justice principles, emphasizing the availability of an appeal as a proper recourse for the petitioner. The judgment underscored the importance of following due process while also recognizing the petitioner's right to challenge the orders through the appropriate legal channels.