2021 (3) TMI 233 - HC - VAT and Sales Tax

Maintainability of petition - alternative remedy of appeal - interstate sales against C Form declarations - violation of principles of natural justice - HELD THAT - In the impugned order, quite a few transactions were held liable to higher rate of tax at 12.5% on the sole ground that annexures were not filed. The petitioner's counsel drew my attention to the materials enclosed along with the reply. It is seen therefrom that the petitioner had given invoice particulars including the date and the amount covered thereby. In the pre-assessment notice, the ground taken by the respondent was that the petitioner has not made available the invoice details. All those details have been made available, when the petitioner submitted his reply. The respondent had casually rejected the same by observing that the annexures have not been filed. The matter is remitted to the file of the respondent to pass order in accordance with law - Petition allowed by way of remand.

Summary

Issues:
Assessment based on defective C Form declarations, Exhaustion of alternative remedy, Violation of principles of natural justice, Refund of already paid tax amount.

Analysis:
The petitioner, an assessee registered with the respondent, received a pre-assessment notice for the assessment year 2010-2011 (CST) due to defective C Form declarations. The respondent proposed to levy tax as the declarations lacked invoice details. The petitioner replied with necessary documents, but the impugned order levied a balance tax of ?64,83,173. The writ petition challenging this order was filed in 2014.

During the hearing, the Government Advocate argued for dismissal citing non-exhaustion of the appeal remedy. However, the judge noted that if violation of natural justice is proven, the appeal remedy can be bypassed. Despite the writ petition being filed in 2014, the tax amount was collected from the petitioner. As the entire tax was paid without prejudice, the judge decided to consider the petitioner's contentions in the writ petition itself.

Upon reviewing the impugned order, the judge found that the respondent had wrongly held transactions liable to higher tax due to missing annexures. The petitioner had indeed provided invoice details in the reply, which the respondent had overlooked. As annexures were filed, the judge quashed the impugned order, allowed the writ petition, and remitted the matter for a fresh order by the respondent, with an opportunity for personal hearing. The decision on refunding the paid tax amount would depend on the respondent's new order. No costs were awarded, and the miscellaneous petition was closed.