2020 (9) TMI 114 - HC - VAT and Sales Tax

Validity of assessment order - time limitation - period of limitation for making assessment expired - HELD THAT - Lockdown on account of COVID-19 pandemic commenced in Hyderabad from 21-03-2020 and continued upto first week of July, 2020. These factors undoubtedly disabled the petitioner from filing objections to the show cause notice issued by 1st respondent for production of records and books of accounts - Therefore when the representative of the petitioner met the officials of the 1st respondent on 10-06-2020 requesting further time, the same ought to have been taken into account by 1st respondent and adequate time should have granted to the petitioner to file objections and produce records and books of account. It is unfortunate that even the request of the petitioner through e.mail dt.01-06-2020 to the Office of the Commercial Tax Department requesting them to provide new login credentials in the VAT portal to retrieve the information uploaded by the petitioner such as monthly returns and supporting documents, was not acted upon by the respondents. There has been a gross violation of principles of natural justice, which has caused serious prejudice to the petitioner - the matter is remitted back to the 1st respondent for fresh consideration - Petition allowed by way of remand.

Summary

Issues involved:
Challenging Assessment Order under Telangana VAT Act for the assessment year 2014-15, violation of principles of natural justice, expiry of limitation period for assessment, impact of COVID-19 lockdown on filing objections and producing records.

Analysis:
The petitioner, a registered dealer, challenged Assessment Order No.56555 dated 23-06-2020 passed by the 1st respondent under the Telangana VAT Act for the assessment year 2014-15. The petitioner, engaged in sales and service of Tata cars and accessories, faced difficulties due to the replacement of old staff and COVID-19 lockdown, impacting its ability to compile required data. Despite requests for more time, the 1st respondent issued repeated notices demanding objections and records, leading to the impugned order without considering the petitioner's challenges.

The petitioner highlighted its inability to access the VAT portal due to pandemic-related restrictions and staff changes, requesting new login credentials. The petitioner's representative visited the 1st respondent's office to explain the challenges faced, but was turned away due to COVID-19 sanitization measures. The petitioner emphasized that the impugned order, passed without granting sufficient time or considering the exceptional circumstances, violated principles of natural justice, causing serious prejudice.

The respondents acknowledged the petitioner's business closure and staff changes, along with the impact of the COVID-19 lockdown on operations. The Court noted that the lockdown prevented the petitioner from timely responding to the show cause notice, emphasizing the need for the 1st respondent to consider the challenges faced by the petitioner. The Court criticized the lack of response to the petitioner's requests for new login credentials, further highlighting the gross violation of natural justice principles.

Consequently, the Court allowed the Writ Petition, setting aside the Assessment Order and remitting the matter back to the 1st respondent for fresh consideration. The petitioner was granted six weeks to file objections and produce records, with the respondents directed to provide new login credentials promptly. The petitioner was also ensured a personal hearing, and the 1st respondent was instructed to pass a reasoned order in accordance with the law. No costs were imposed, and pending miscellaneous petitions were closed as a result of the judgment.