2020 (1) TMI 265 - HC - VAT and Sales Tax

Amnesty Scheme - registration not obtained - It is the case of the petitioners that they bona fide believed that they were selling immovable property and therefore, neither obtained registration under the Gujarat Value Added Tax Act, 2003 nor paid any tax thereunder - HELD THAT - The object of the amnesty scheme is to bring about expeditious and effective resolution of old disputes and recoveries of old outstanding dues of the Government and reduction of administrative costs. Since such scheme is applicable to all pending cases, the officers acting under the relevant statutes are expected to respect the object of the scheme and to ensure that the assessees get the benefit under the scheme. Therefore, when a bona fide request is made by an assessee to adjourn the hearing of a case with a view to enable him to avail the benefit of the scheme, the concerned officer is duty bound to respect such request - Therefore, when in the present case, where the matter had not been taken up for hearing for a considerable period of time, when the petitioners requested the second respondent to keep the assessment proceedings in abeyance as they wanted to avail the benefit of the amnesty scheme, the respondent ought to have respected such request and afforded the petitioners sufficient time to avail the benefit of the amnesty scheme, however, on the contrary, the second respondent, in undue haste, has proceeded to pass an ex parte high pitched best judgment assessment order under section 34(8) of the GVAT Act. Section 17 of the GVAT Act provides for power to transfer proceedings and lays down that the Commissioner may, after due notice to the concerned parties and by an order in writing, transfer any proceedings or class of proceedings under any provision of that Act from himself to any other officer and he may likewise transfer any such proceedings from such officer to another or to himself - In the facts of the present case, on a perusal of the reply received by the petitioners in response to their application under the Right to Information Act, it is evident that the jurisdiction of the petitioners was not transferred to the second respondent - Consequently, the second respondent did not have any jurisdiction to make assessment in the case of the petitioners, which renders the impugned assessment orders null and void as they have been passed by an authority which lacked the jurisdiction to make such orders. Perusal of the paragraph 5(2) of the Amnesty Scheme reveals that the scheme clearly provides for making applications thereunder even in cases where there have been enforcement proceedings. Moreover, the petitioners have asserted that in their case there was no search, which fact is clearly supported by the reply received by them in response to their applications under the Right to Information Act, wherein it has been stated that no search warrant has been issued to Sunflower Developers - the first petitioner in both the petitions. Under the circumstances, prima facie it appears that the case of the petitioners is not a search case. In any event, even otherwise, while making a best judgment assessment under the GVAT Act, it was not permissible for the second respondent to comment on the eligibility or otherwise of the petitioners under the amnesty scheme. Apart from the fact that the second respondent lacked the jurisdiction to make the assessment orders, even otherwise, the second respondent ought to have respected the request of the petitioners to keep the proceedings in abeyance so as to enable the petitioners to avail of the benefit under the amnesty scheme. While it is true that even after the passing of the assessment orders, the petitioners would be entitled to avail of the amnesty scheme, the consequence of the passing of the impugned assessment orders would be that the petitioners would be required to accept the amount assessed under the impugned assessment orders and pay tax accordingly under the amnesty scheme - Thus, the second respondent, by not keeping the proceedings in abeyance, has tried to frustrate the petitioners chances of obtaining the benefit of the amnesty scheme and by making a high pitched best judgment assessment, has attempted to ensure that even if the petitioners decide to avail the benefit of the Amnesty Scheme, they are required to pay a huge amount of tax. This conduct of the second respondent cannot be countenanced. The impugned assessment orders are set aside - petition allowed.

Summary

Issues Involved:
1. Jurisdiction of the assessing authority.
2. Legitimacy of the high-pitched assessment order.
3. Eligibility for the benefit under the Amnesty Scheme.
4. Compliance with principles of natural justice.

Detailed Analysis:

Jurisdiction of the Assessing Authority:
The petitioners challenged the jurisdiction of the Commercial Tax Officer, Range-21, Junagadh, to issue the notice and make the assessment order. According to the petitioners, their jurisdiction was vested with Ghatak-85, and there was no transfer of proceedings to the second respondent as per Section 17 of the GVAT Act. The court found that the second respondent lacked jurisdiction to make the assessment, rendering the impugned orders null and void.

Legitimacy of the High-Pitched Assessment Order:
The petitioners argued that the second respondent made a high-pitched best judgment assessment without considering their request to keep the proceedings in abeyance to avail the Amnesty Scheme. The court noted that the second respondent, in undue haste, passed an ex parte high-pitched best judgment assessment order, which was not justified and breached the principles of natural justice.

Eligibility for the Benefit under the Amnesty Scheme:
The petitioners contended that they were entitled to the benefit of the Amnesty Scheme announced by the Government of Gujarat. The second respondent, however, determined that the petitioners were not eligible for the scheme, labeling their case as an enforcement case. The court observed that the petitioners' case was not a search case and that the Amnesty Scheme allowed applications even in enforcement cases. The second respondent's decision on the petitioners' eligibility under the Amnesty Scheme was unwarranted.

Compliance with Principles of Natural Justice:
The court emphasized that the second respondent failed to respect the petitioners' request to adjourn the hearing to avail the Amnesty Scheme, thus violating principles of natural justice. The second respondent's actions were seen as an attempt to frustrate the petitioners' chances of obtaining the benefit of the Amnesty Scheme by making a high-pitched assessment, which was not permissible.

Conclusion:
The petitions were allowed, and the impugned assessment orders dated 27.9.2019 were quashed and set aside. The respondent authorities were directed to process the petitioners' applications under the Amnesty Scheme in accordance with law. It was clarified that if the petitioners do not avail or are not entitled to the benefit of the Amnesty Scheme, the respondents may initiate assessment proceedings for the period in question.