2022 (7) TMI 710 - HC - VAT and Sales Tax

Validity of assessment order - legality and validity of the ex-parte order of assessment - opportunity of hearing - principles of natural justice - HELD THAT - One opportunity should be given to the writ applicant to question the legality and validity of the ex-parte order of assessment dated 26.03.2018 passed by the Assistant Commissioner of Commercial Tax. This matter was taken up for hearing in the first session and at that point of time, we inquired with Mr. Modh whether his client would be ready and willing to deposit an amount of Rs.5,00,000/- with the Assessing Officer. Mr. Modh, made a request to keep the matter at 2 30 p.m. to enable him to obtain necessary instructions from his client. Mr. Modh has reverted to us with necessary instructions. The client of Mr. Modh i.e. the writ applicant is ready and willing to deposit an amount of Rs.5,00,000/- with the Assessing Officer by day after tomorrow i.e. 11.02.2022. Once the amount of Rs.5,00,000/- is deposited with the Assessing Officer, the writ applicant shall produce the proof of such deposit with the respondent no.3 herein and proceed to hear the appeal against the original order of assessment dated 26.03.2018 passed by the Assessing Officer. For that purpose, the respondent no.3 shall restore the appeal to its original file - application disposed off.

Summary

Issues:
1. Validity of ex-parte assessment order under the VAT Act
2. Appeal dismissal due to non-payment of pre-deposit
3. Request for stay on implementation of the assessment order
4. Delay condonation application dismissal by VAT Tribunal
5. Opportunity to question the legality of the assessment order
6. Agreement to deposit a specified amount for appeal hearing

Issue 1: Validity of ex-parte assessment order under the VAT Act
The writ applicant, a retail and trading dealer, received an ex-parte assessment order for the financial year 2013-14 under the Gujarat Value Added Tax Act, 2003. The applicant claimed no prior knowledge of the assessment proceedings and did not participate, leading to a directive to pay a substantial amount. Dissatisfied, the applicant filed an appeal which was summarily dismissed for non-payment of a pre-deposit amount.

Issue 2: Appeal dismissal due to non-payment of pre-deposit
Despite filing an appeal against the ex-parte assessment order, the applicant's appeal was dismissed by the respondent on grounds of non-payment of a pre-deposit amount. This dismissal prompted the applicant to approach the VAT Tribunal, which further led to the dismissal of the second appeal due to delay condonation refusal.

Issue 3: Request for stay on implementation of the assessment order
Following the dismissal of appeals, the Commercial Tax Department issued a notice to a bank to transfer a specified amount from the applicant's account to the Government Treasury. The applicant sought a stay on this transfer and requested a copy of the assessment order, leading to the filing of the present writ application.

Issue 4: Delay condonation application dismissal by VAT Tribunal
Despite filing a delay condonation application along with an appeal and stay application before the VAT Tribunal, the delay was not condoned, resulting in the dismissal of the second appeal.

Issue 5: Opportunity to question the legality of the assessment order
The High Court, upon hearing arguments from both parties, decided to grant the applicant an opportunity to challenge the legality and validity of the ex-parte assessment order. The court directed the applicant to deposit a specified amount with the Assessing Officer to proceed with the appeal.

Issue 6: Agreement to deposit a specified amount for appeal hearing
Upon the applicant's agreement to deposit a specified amount, the court directed the restoration of the appeal for hearing on its merits. The court clarified that it had not expressed any opinion on the case's merits, emphasizing the need for a fair hearing and decision in accordance with the law.

In conclusion, the High Court disposed of the writ application, allowing the applicant to challenge the assessment order's legality and validity by depositing a specified amount for the appeal hearing, ensuring a fair process moving forward.