2019 (10) TMI 24 - HC - VAT and Sales Tax

Validity of assessment order - ex-parte order - principles of natural justice - HELD THAT - It is not in dispute that Ext.P3 assessment order was one that was passed exparte. It is also not in dispute that the reply that was preferred by the petitioner to the assessment proposals were received by the 1st respondent on 10.12.2018. Inasmuch as the fact of receipt of the reply to the pre-assessment notice on 10.12.2018 would clearly indicate that there was no attempt by the petitioner to protract proceedings, the 1st respondent ought not to have acted in such haste in a matter pertaining to an assessment of the petitioner under the KVAT Act - Ext.P3 assessment order is one that was vitiated by a non-compliance with the rules of natural justice. The 1st respondent is directed to complete the assessment proceedings afresh, after hearing the petitioner - petition allowed.

Summary

Issues involved:
- Ex-parte assessment order passed without considering petitioner's objections
- Dismissal of rectification application without proper consideration
- Violation of natural justice in assessment proceedings

Analysis:
The petitioner, a private limited company, challenged the ex-parte assessment order (Ext.P3) and the dismissal of the rectification application (Ext.P5) in a writ petition. The petitioner contended that the assessment order was passed without considering vital contentions raised in their reply to the assessment proposals. The High Court noted that the assessment order was indeed passed ex-parte, and the reply from the petitioner was received three days before the order was issued. The court found that the haste in passing the assessment order without considering the petitioner's objections violated the rules of natural justice. Consequently, the court quashed the assessment order (Ext.P3) and directed the respondent to conduct fresh assessment proceedings after affording the petitioner an opportunity to be heard.

In addition to setting aside the dismissal order of the rectification application (Ext.P5), the court instructed the petitioner to appear before the respondent for the fresh assessment proceedings. The respondent was directed to complete the assessment within three weeks from the petitioner's appearance. The petitioner was also required to submit a copy of the writ petition and the judgment to the respondent for further action. The court's decision aimed to rectify the procedural irregularities and uphold the principles of natural justice in the assessment proceedings under the Kerala Value Added Tax Act.