2023 (1) TMI 1100 - HC - VAT and Sales Tax

Maintainability of petition - appeal provided against the reassessment order or not - Validity of re-assessment order - challenge on the ground of the same being invalid due to non-availment of an opportunity and the final hearing not being given despite the acknowledgment of the lock down due to the COVID-19 virus - whether the circumstances existed at the relevant point of time had actually made any breach of principle of natural justice? HELD THAT - Noticing the fact that the officer concerned had the statutory time limit to meet with as the same was expiring on 31.03.2020, although later on the period of limitation had also been extended by the Apex Court in its various orders, but, the officer can be given the benefit that at the time when he actually passed this order on 25.03.2020, he may not be aware of such developments. In fact, no one was aware of the seriousness of the entire issue. And, yet, the fact remains that the officer concerned, having taken a note of the fact that the request has been made by the petitioner to the Rajasthan Authority for issuance of Form- F , he has chosen not to accommodate the petitioner nor was he given an opportunity to tender the Form-F nor any opportunity of hearing was accorded. Therefore, this petition under Article 226 of the Constitution of India can be entertained bearing in mind the fact that this is a clear violation of principle of natural justice. Availability of alternative remedy in the form of appeal this stage would not have served the purpose for this being a violation of the principle of natural justice. It was an unprecedented situation where people had suffered, no one was sure as what is going to be the future. In such circumstances, when peoples were struggling to save the human lives, the request for the petitioner to get the Form-F from the concerned authority was a mere impossibility, the opportunity shall need to be availed. The reassessment order dated 25.03.2020 and the final notice of assessment are quashed and set aside with all consequential reliefs. The matter shall be taken up from the stage where it was left. The officer concerned shall avail an opportunity of hearing of the petitioner. The petitioner is permitted to file Form- F or any other documents within a period of one week before the officer concerned, who will continue to hear the reassessment proceedings - this petition is allowed.

Summary

Issues:
Challenge to re-assessment order and final notice of assessment due to lack of opportunity and hearing during COVID-19 lockdown.

Analysis:
1. The petitioner challenged the re-assessment order and final notice of assessment, claiming they were invalid due to lack of opportunity and hearing during the COVID-19 lockdown. The petitioner, engaged in retail sales of Cotton Seed Oil Cakes, had applied for registration under the VAT Act and CST Act in 2013. The respondent authority passed an audit assessment order under the VAT Act, followed by reassessment notices under the CST Act, which were not served due to business closure and lockdown restrictions.

2. The respondent authority contended that the petitioner failed to reflect transactions in VAT/CST returns, leading to reassessment notices. The final reassessment order was passed in March 2020, citing non-submission of Form-'F'. The court heard arguments on the maintainability of the petition under Article 226 and the breach of natural justice principles.

3. The court noted the significant turnover and Form-'F' requirement, acknowledging the petitioner's lockdown-related challenges in obtaining Form-'F'. Despite the extension of limitation periods by the Apex Court, the reassessment order was passed without granting an opportunity for hearing or considering the exceptional circumstances.

4. The court found the lack of intent for willful disobedience but emphasized the violation of natural justice principles. It deemed the petition maintainable due to the breach and allowed it, quashing the reassessment order and final notice of assessment. The officer was directed to provide a hearing opportunity, and the petitioner was given a week to submit Form-'F' or relevant documents.

5. The court instructed the completion of reassessment proceedings within four weeks and permitted e-mode service. It clarified that future litigation on limitation issues would not hold the authority accountable if the reassessment order was passed in compliance with the court's directions.

This detailed analysis covers the issues raised in the legal judgment, highlighting the key arguments, findings, and directives of the court.