2022 (1) TMI 504 - HC - VAT and Sales Tax

Validity of assessment order - input tax credit - mismatch in Returns filed by the dealers and information captured by the department - opportunity for personal hearing not provided - violation of the natural justice - HELD THAT - Though the petitioner failed to come and collect the document after notice was issued to the petitioner on 05.08.2021 for the assessment year 2009-2010 and on 29.07.2021 for the assessment year 2014- 15, it was incumbent on the part of the respondent to call upon the petitioner to come for a personal hearing before passing the impugned orders. That apart, the petitioner had already filed W.P.Nos.18107 and 18109 of 2017 before this Court wherein the respective pre-assessment notices issued to the petitioner dated 05.08.2021 and 29.07.2021 were challenged. Since the impugned orders have been passed without calling upon the petitioner to come for a personal hearing and considering the fact that the contents of the circular dated 24.02.2021 has not been fully complied by the respondent before passing the impugned orders, the impugned orders is quashed and cases remitted back to the respondent to pass a fresh order. The impugned orders which stand quashed shall be treated as corrigendum to the pre-assessment notices dated 05.08.2021 and 29.07.2021 for the respective Assessment Years - petition allowed.

Summary

Issues:
Challenge to impugned orders for Assessment Years 2009-10 and 2014-15, Compliance with circular dated 24.02.2021, Denial of opportunity for personal hearing, Violation of natural justice, Delay in assessment, Alternate remedy before Appellate Authority.

Analysis:

Challenge to Impugned Orders:
The petitioner challenged impugned orders for Assessment Years 2009-10 and 2014-15, leading to a series of litigations. Previous writ petitions resulted in orders remitting the assessments back to the Assessing Officer for re-evaluation. The issue of input tax credit due to mismatch in returns was addressed following a specific judgment. Despite circulars and representations, the respondent passed new impugned orders dated 23.08.2021 during the pendency of writ petitions, prompting further legal action.

Compliance with Circular:
The petitioner contended that the impugned orders were passed in violation of the circular dated 24.02.2021, which outlined specific procedures for assessments. The petitioner was denied the opportunity to cross-examine individuals whose statements were crucial for the orders. The respondent argued that the circular's provisions were discretionary, not mandatory, and that the petitioner had alternative recourse before the Appellate Authority.

Denial of Opportunity for Personal Hearing:
The court noted that the impugned orders were passed without affording the petitioner a personal hearing, as required by natural justice principles and the circular's guidelines. Despite the petitioner's failure to collect documents, it was incumbent on the respondent to ensure a personal hearing before finalizing the orders.

Violation of Natural Justice and Delay in Assessment:
The court found that passing orders without a personal hearing and non-compliance with the circular amounted to a violation of natural justice. The delay caused by the petitioner's failure to collect documents did not justify bypassing procedural requirements, especially when the petitioner had already challenged pre-assessment notices in separate writ petitions.

Remedy and Directions:
Consequently, the court quashed the impugned orders and directed the respondent to reevaluate the cases, ensuring compliance with the circular and providing the petitioner with a personal hearing. The quashed orders were to be treated as corrigendum to the pre-assessment notices, and the petitioner was given a timeframe to respond before a fresh order was to be issued.

Conclusion:
The writ petitions were allowed, emphasizing the importance of procedural fairness and adherence to circular guidelines in assessments. The court's decision aimed to uphold principles of natural justice and ensure a fair opportunity for the petitioner to present their case.