2019 (10) TMI 675 - HC - VAT and Sales Tax

Rectification of mistake - the figures in respect of sale of products liable to VAT and sale of service liable to service tax had been interchanged inadvertently - principles of natural justice - HELD THAT - It is seen that the Assessing Officer has passed the impugned order after providing sufficient opportunity to the petitioner. Going by the order impugned in this writ petition, it is seen that the petitioner was given several opportunities. However, considering the fact that the claim of the petitioner is that there is a genuine mistake committed in interchanging the figures relating to sale of products as well as sale of service and when such mistake is sought to be rectified and further considering the fact that the petitioner-Company is engaged in rendering maintenance service to highly sophisticated Cancer equipments at the Government Hospitals, this Court is of the view that an indulgence can be shown to the petitioner as a final chance before the Assessing Officer to place all the material documents in support of their contention so as to enable the Assessing Officer to redo the assessment and pass fresh orders. However, such indulgence can be shown only by putting the petitioner on some terms. The matter is remitted back to the Assessing Officer for redoing the assessment.

Summary

Issues involved:
Challenge against assessment order dated 30.07.2019; Rectification of figures in balance sheet; Request for one more opportunity to present case before Assessing Officer.

Detailed Analysis:

1. Challenge against assessment order: The petitioner, an Indian company, challenged the assessment order dated 30.07.2019, which was issued proposing to revise the assessment for the assessment years 2016-2017. The petitioner contended that there was a genuine mistake in the balance sheet where figures for sale of products liable to VAT and sale of services liable to service tax were inadvertently interchanged. The petitioner sought rectification of this mistake.

2. Request for one more opportunity: The petitioner, through their counsel, requested one more opportunity to present their case before the Assessing Officer. The petitioner highlighted the nature of their services, emphasizing the importance of maintenance of Cancer equipments at Government Hospitals. The petitioner argued that if given another chance, they could prove their case with relevant materials.

3. Contentions of both parties: The learned Additional Government Pleader for the respondent contended that the petitioner had been given several opportunities to provide supporting materials but failed to utilize them effectively. Therefore, the respondent opposed granting the petitioner another opportunity as a matter of right.

4. Court's decision and reasoning: After hearing both sides and examining the materials, the Court observed that the Assessing Officer had provided sufficient opportunities to the petitioner before passing the impugned order. However, considering the petitioner's claim of a genuine mistake in the balance sheet and the nature of their services, the Court decided to grant the petitioner a final chance to present all relevant documents before the Assessing Officer for reassessment.

5. Terms and conditions for reassessment: The Court allowed the writ petition, setting aside the impugned order and remitting the matter back to the Assessing Officer for redoing the assessment. The Court imposed specific terms for the reassessment, including the petitioner paying 15% of the tax liability within three weeks, filing necessary documents, attending a personal hearing, and the Assessing Officer passing a fresh order within four weeks after the hearing.

6. Final remarks: The Court clarified that it was not expressing any view on the merits of the petitioner's claim, leaving it to the Assessing Officer to decide. No costs were awarded, and the connected miscellaneous petition was closed, concluding the judgment.

This detailed analysis outlines the issues raised, the arguments presented by both parties, the Court's decision, and the specific terms set for the reassessment process, providing a comprehensive summary of the legal judgment delivered by the Madras High Court.