2022 (10) TMI 378 - HC - VAT and Sales Tax

Validity of assessment order - time limitation - violation of principles of natural justice - tax periods 2009-10 to 2011-12 under A.P. VAT Act, 2005 - non-supply of vigilance report - time limitation - HELD THAT - In NALLANA SAMBASIVA RAO VERSUS STATE OF ANDHRA PRADESH AND ORS. 2015 (2) TMI 1377 - TELANGANA HIGH COURT , a Division Bench of the composite High Court for the State of Telangana and the State of Andhra Pradesh, has categorically held that, when the order of assessment is passed on material report submitted by Regional Vigilance and Enforcement, it is obligatory on the part of authorities to supply material along with the notice of assessment and invite objection from the petitioner, before passing the revised assessment order. Thus, it is clear that, when the Order of assessment came to be passed on the report submitted by Regional Vigilance and Enforcement Department, the Authorities ought to have supplied a copy of the same, inviting objections to the report. Therefore, the argument of the learned Counsel for the Petitioner that the authorities have relied on a material, which was not supplied to him is a violative of principles of natural justice, cannot be brushed aside. The matter is remanded back to the Assessing Authority to deal with the same in accordance with law, after furnishing the report submitted by Regional Vigilance and Enforcement Department, which was made the basis while assessing the case of the Petitioner - Insofar as the issue of limitation is concerned, since the matter is remanded back on above issue, the Petitioner is at liberty to raise the ground of limitation as well before the concerned authority. Petition disposed off.

Summary

Issues:
1. Non-supply of vigilance report
2. Proceedings barred by limitation

Non-supply of vigilance report:
The Writ Petition sought a Writ of Mandamus to declare an Assessment Order as barred by limitation and violative of natural justice. The Assessment Order was based on a report from the Regional Vigilance and Enforcement Department, which the Petitioner claimed was not supplied to him. The Petitioner challenged the validity of the assessment on this ground. The Court examined previous judgments like Sri Nallana Sambasiva Rao and Sri Uma Maheshwara Rice and Flour Mill, emphasizing the obligation of authorities to provide such material before passing revised assessment orders. The Court held that failure to supply the report violated principles of natural justice. Consequently, the Writ was allowed, setting aside the impugned Order and remanding the matter to the Assessing Authority for fresh consideration after providing the report to the Petitioner.

Proceedings barred by limitation:
The Petitioner argued that the assessment was barred by the three-year limitation period under Section 37 of the AP VAT Act, which expired on a specific date. Citing a judgment from the Supreme Court, the Petitioner contended that the assessment was time-barred. The Government Pleader opposed this, stating the circumstances of the cited judgment were different. The Pleader also argued that the Petitioner could have appealed the order instead of directly approaching the Court under Article 226. The Petitioner maintained that the issue involved a violation of natural justice, justifying the Court's jurisdiction. As the Court primarily focused on the non-supply of the vigilance report, the issue of limitation was left open for the Petitioner to raise before the concerned authority upon remand.

In conclusion, the High Court of Andhra Pradesh allowed the Writ Petition on the grounds of non-supply of the vigilance report, setting aside the Assessment Order and remanding the matter for fresh consideration. The issue of limitation was not conclusively addressed, leaving the Petitioner the liberty to raise it after the remand. The judgment emphasized the importance of providing relevant material to the assessed party before passing assessment orders, highlighting the violation of natural justice in this case.