2019 (10) TMI 365 - HC - VAT and Sales Tax

Principles of natural justice - non-speaking order - validity of assessment order - subsection (2) of section 34 of the Gujarat Value Added Tax Act, 2003 - HELD THAT - A perusal of the impugned order reveals that the second respondent has merely recorded that pursuant to the notice issued in Form No.302, the dealer had remained present with the relevant documents. He, thereafter, has merely computed the tax payable by the petitioner and has ordered that a demand notice be issued accordingly. On a plain reading of the impugned order, it is apparent that the same is totally non-speaking order and does not record the reasons for the conclusions arrived by the assessing authority. It is the case of the petitioner that no opportunity of hearing was given to him, inasmuch as, the petitioner had remained present pursuant to the notice issued to it, however, on that date, no hearing had taken place and certain documents were submitted by the petitioner. Thereafter, without giving any notice for hearing to the petitioner, the second respondent has passed the impugned order, which therefore is clearly in breach of the principles of natural justice - Not only that, on a plain reading of the impugned order it is manifest that the same is totally bereft of any reasons. In the absence of any reasons for arriving at his conclusions, it is not possible for an appellate court to ascertain as to what weighed with the second respondent while arriving at his decision. The impugned order being violative of the principles of natural justice as well as being a non-speaking order, cannot be sustained -the matter is restored to the file of the second respondent, who shall decide the same afresh in accordance with law, after affording a reasonable opportunity of hearing to the petitioner and pass a reasoned order thereon - petition allowed -

Summary

Issues:
Challenge to assessment order under GVAT Act for non-speaking order and breach of natural justice.

Analysis:
1. Assessment Order Challenge: The petitioner challenged the assessment order dated 20.8.2019 under section 34 of the Gujarat Value Added Tax Act, 2003, where the petitioner was held liable to pay a certain amount. The petitioner, engaged in sale and resale of goods, had transactions with vendors who faced registration cancellation. The petitioner cooperated with authorities but was surprised by the impugned order without a hearing. The petitioner contended that the order lacked reasons and violated principles of natural justice.

2. Contentions: The petitioner's advocate argued that the impugned order was passed without a hearing and lacked reasoning, thus breaching natural justice. The Assistant Government Pleader contended that the submissions were considered, but couldn't dispute the absence of reasoning in the order.

3. Non-Speaking Order Issue: The impugned order was found to be non-speaking, lacking reasons for the conclusions reached by the assessing authority. Citing legal precedents, the court emphasized the importance of recording reasons in quasi-judicial decisions to ensure justice, transparency, and accountability.

4. Legal Precedents: Referring to the Supreme Court decisions, the court highlighted the significance of reasons in judicial decisions to prevent prejudice, ensure justice, and facilitate judicial review. The absence of reasons in the impugned order hindered the petitioner's ability to understand the basis of the decision and prejudiced the right to a fair hearing.

5. Judgment: The court held that the impugned order violated principles of natural justice and lacked reasoning, rendering it unsustainable. Consequently, the petition was allowed, quashing the order and remanding the matter for a fresh decision with a reasonable opportunity of hearing and a reasoned order in accordance with the law. The rule was made absolute accordingly.