2020 (7) TMI 582 - HC - VAT and Sales Tax

Principles of Natural Justice - contention urged by the learned counsel for the petitioner is that Exhibit P8 order is bad, since it was issued after the period prescribed under Section 25(1) of the KVAT Act - HELD THAT - As per Section 25(1) of the KVAT Act, the assessing authority can, within five years from the last date of the year to which the return relates, proceed to determine, to the best of its judgment the turnover which has escaped assessment to tax or has been underassessed - In the instant case, the petitioner has not disputed the fact that the assessee was issued with Exhibit P4 notice dated 21.11.2011, which was well within the period prescribed under Section 25(1). The assessing officer having thus proceeded to determine the tax which had escaped assessment, the challenge against Exhibit P8 assessment order on the premise that it was passed after the five year period stipulated in Section 25(1) cannot be countenanced. There is no reason for this Court to interfere with Exhibit P8 order, particularly since the petitioner has approached this Court without exhausting the statutory remedies - petition dismissed.

Issues:
1. Timeliness of assessment order under Section 25(1) of the KVAT Act.
2. Opportunity of personal hearing to the petitioner.
3. Consideration of request for revising return based on audit report.
4. Obligation to file revised annual return along with audit certificate.
5. Adequacy of opportunities granted to the assessee for producing documents.

Analysis:

1. The main contention raised was regarding the timeliness of the assessment order issued under Section 25(1) of the KVAT Act. The petitioner argued that the order was passed after the prescribed period, but the court noted that the notice was issued within the stipulated time frame. The court found that the assessing officer had the authority to determine the tax that had escaped assessment within the specified period, and since the notice was issued timely, the challenge against the assessment order on this ground was not valid.

2. Another issue raised was the lack of opportunity for a personal hearing to the petitioner. The petitioner claimed that despite informing the authority about the death of the assessee and requesting time for document submission, the assessment was finalized without granting further opportunities. However, the court observed that the petitioner was given a chance for a hearing before the order was issued, and the reasons for denying additional time for document submission were provided by the authority.

3. The petitioner also contended that the request for revising the return based on the audit report was not considered by the authority. The court analyzed that as per Section 42(2) of the KVAT Act, it was the dealer's obligation to file a revised annual return along with the audit certificate, which was not done in this case. The court found that since the revised return was not submitted with supporting documents, the authority was not at fault for finalizing the assessment without considering the revision request.

4. The obligation to file a revised annual return along with the audit certificate was emphasized by the learned Senior Government Pleader. It was argued that without fulfilling this requirement, the authority was not bound to consider the revision request. The court agreed with this argument and noted that the failure to submit the revised return with the necessary documentation justified the authority's decision to proceed with the assessment.

5. Lastly, the adequacy of opportunities granted to the assessee for producing documents was discussed. The court observed that despite repeated notices and chances given to the assessee, the necessary documents were not submitted. Therefore, the court found that the authority had provided sufficient opportunities, and the request for further time for document submission could not be accommodated due to the circumstances. Ultimately, the court dismissed the writ petition, stating that the petitioner had not exhausted the statutory remedies before approaching the court.

In conclusion, the court upheld the assessment order, emphasizing the importance of complying with statutory requirements and fulfilling obligations under the KVAT Act.

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