2019 (10) TMI 766 - HC - VAT and Sales Tax

Principles of Natural Justice - Service of order - impugned assessment order has been passed without the notice having been served upon the petitioner - section 35(1) of the Gujarat Value Added Tax Act, 2003 - HELD THAT - Issue notice, returnable on 24.10.2019. By way of adinterim relief, the operation of the impugned order dated 31.7.2017 (Annexure-A to the petition) is hereby stayed.

Summary

Issues:
1. Assessment order passed without serving notice on petitioner.
2. Impugned assessment order beyond the prescribed time limit under section 35(2) of GVAT Act.
3. Misapplication of section 34(8A) of GVAT Act without pending proceedings.

Analysis:
1. The petitioner contended that the assessment order was passed without serving notice, contrary to the requirements of section 35(1) of the GVAT Act. The respondents claimed to have issued a notice for reassessment under section 35(1), but the notice itself had numerous blank columns, raising doubts about its validity. The petitioner's counsel highlighted this discrepancy to challenge the legality of the assessment process.

2. Another crucial issue raised was the timing of the impugned assessment order in relation to the statutory time limit under section 35(2) of the GVAT Act. The assessment order pertained to the Assessment Year 2008-2009, and as per section 35(2), such orders must be issued within five years from the end of the relevant tax period. However, the impugned order was passed on 31.7.2017, well beyond the prescribed deadline of 31.3.2014. This violation of the statutory time limit was a significant ground for challenging the validity of the assessment order.

3. The petitioner further argued that the respondents incorrectly applied section 34(8A) of the GVAT Act in the absence of any ongoing proceedings under the Act. Section 34(8A) allows for action during the course of GVAT Act proceedings, which was not the case here. Citing a precedent from Dhanani Imp. Exp. Pvt. Ltd. & Anr. vs. State of Gujarat & Anr., the petitioner's counsel emphasized that invoking section 34(8A) without proper procedural grounds was impermissible. This misapplication of the law added another layer of illegitimacy to the assessment order.

4. In light of the arguments presented by the petitioner's counsel, the court issued a notice returnable on a specified date for further proceedings. Additionally, an ad interim relief was granted by staying the operation of the impugned order dated 31.7.2017 until the matter was resolved. This interim measure aimed to prevent any immediate adverse consequences for the petitioner pending the final adjudication of the case.

5. The court also permitted direct service in this matter, ensuring that all relevant parties would be duly informed and involved in the legal proceedings. This step was essential to maintain transparency and facilitate effective communication throughout the case.