2020 (8) TMI 784 - HC - VAT and Sales Tax

Principles of natural justice - enhancement of tax - opportunity of hearing was not given to the assessee before enhancing the tax - sub-section 6 of Section 53 of the Uttarakhand Value Added Tax, 2005 - HELD THAT - The impugned order of the tribunal does not indicate that any opportunity was given to the assessee of being heard before enhancing the tax. Hence, on this point alone and without going into the merits, it would be just and necessary if the statutory requirement of law is complied with by granting an opportunity to the assessee. The order dated 13.09.2011 passed by learned Commercial Tax Tribunal in Second Appeal No. 76 of 2011 is set-aside only to the extent of enhancing the liability. The tribunal shall give an opportunity of hearing to the revisionist with regard to the proposal to increase the tax and thereafter pass an appropriate order, in accordance with law.

Summary

Issues:
1. Determination of taxable turnover based on a survey conducted on the business premises.
2. Whether the assessee was given an opportunity to be heard before the tax liability was enhanced.

Analysis:
1. The case involved a revisionist running a steel fabrication business who was found to have machinery and raw materials during a survey conducted at the business premises. The assessing authority calculated the annual sale turnover based on the survey findings, leading to a tax liability. The first appellate authority declared the assessee as non-taxable, but the tribunal partially allowed the appeal, modifying the tax liability. The revisionist challenged this decision, citing a violation of Section 53 of the Uttarakhand Value Added Tax, 2005, which requires giving the dealer an opportunity to be heard before increasing the tax liability.

2. The revisionist's counsel argued that the tribunal's decision to enhance the tax liability without providing an opportunity to be heard resulted in a miscarriage of justice. The respondent's counsel disputed this claim. The court, after considering the arguments, found that the tribunal failed to grant the revisionist an opportunity to be heard before increasing the tax liability, as mandated by the law. Therefore, the court set aside the tribunal's order to the extent of enhancing the liability and directed the tribunal to provide the revisionist with a hearing regarding the proposal to increase the tax. The court emphasized the importance of complying with statutory requirements and scheduled a hearing for the revisionist to present their case before the tribunal.