2023 (6) TMI 187 - HC - VAT and Sales Tax

Validity of assessment order - impugned order passed by the first respondent, as barred by limitation and the same came to be passed without giving any opportunity to the petitioner - principles of natural justice - HELD THAT - A Full Bench of the Composite High Court for the State of Telangana and the State of Andhra Pradesh in ECIL, after referring to the judgments of (i) The Kerala Education Bill, 1957 1958 (5) TMI 47 - SUPREME COURT ; (ii) Minerva Mills vs. Union of India 1980 (7) TMI 262 - SUPREME COURT ; and (iii) L. Chandra Kumar vs. Union of India 1997 (3) TMI 90 - SUPREME COURT , held that writ jurisdiction conferred upon the High Court under Article 226 of the Constitution of India is part of the inviolable basic structure of the Constitution and any law which seeks to take away or restrict the jurisdiction of the High Court under Article 226 of the Constitution of India must be held to be void . From the judgment of Apex Court in Glaxo Smith Kline 2020 (5) TMI 149 - SUPREME COURT , it is very clear that the request of the Petitioner therein came to be rejected mainly on the ground of inability to file an appeal within the prescribed time was not properly substantiated or explained. Further, the Court also observed that the Order of the High Court does not indicate violation of principles of natural justice or non-compliance of statutory requirements in any manner. The Court also held that the Order of assessment does not get merged with the order rejecting the request to condone the delay. In the instant case, the Appellate Authority as well as VAT Tribunal, categorically held that there was sufficient cause for preferring the appeal with delay, but, as they have no power to extend the period of limitation, rejected the appeals. Apart from that, it is also urged that, the assessment order came to be passed without giving an opportunity of hearing and there is no material to show that the show-cause notice was served on the Petitioner. Since, the delay in filing the appeals was explained and the reason given by the Petitioner was accepted, but the delay was not condoned due to limitation prescribed under the Act and as the Assessment Order is said to have passed without giving an opportunity of hearing, more particularly, the non-service of show-cause notice, it is felt a fit case where the matter requires reconsideration. The Writ Petitions are disposed of setting aside the Orders under challenge, in both the writ petitions and the matters are remanded back to the Assessing Authority to deal with the same afresh in accordance with law.

Summary

Issues Involved:
1. Limitation and delay in filing appeals.
2. Violation of principles of natural justice.
3. Jurisdiction of the High Court under Article 226 of the Constitution.

Detailed Analysis:

1. Limitation and Delay in Filing Appeals:
The petitioner challenged the Assessment Order No.63500 dated 31.03.2017 for the year 2012-13 and Assessment Order No.116695 dated 15.03.2018 for the year 2013-14 under the CST Act, claiming they were barred by limitation and passed without an opportunity for the petitioner to present their case. The petitioner filed appeals with a delay of 540 days due to medical reasons, which were accepted as genuine by the Appellate Authority and the APVAT Appellate Tribunal. However, both authorities rejected the appeals as they had no jurisdiction to condone the delay beyond the statutory period.

2. Violation of Principles of Natural Justice:
The petitioner argued that the Assessment Orders were passed without giving an opportunity of hearing, violating the principles of natural justice. The Government Pleader contended that the petitioner did not respond to the show cause notice, and hence, the claim of not being given a hearing was invalid. The Court noted that there was no counter filed by the respondents to refute the petitioner's claims, and the records did not show that the show cause notice was served on the petitioner.

3. Jurisdiction of the High Court under Article 226 of the Constitution:
The petitioner relied on the Full Bench Judgment in Electronics Corporation of India Limited vs. Union of India, which held that writ jurisdiction under Article 226 is part of the inviolable basic structure of the Constitution and cannot be restricted by statutory limitations. The Government Pleader cited the Supreme Court judgment in Assistant Commissioner (CT) LTU, Kakinada and Others vs. Glaxo Smith Kline Consumer Health Care Limited, which held that the High Court cannot entertain a writ petition challenging an assessment order beyond the statutory appeal period.

Conclusion:
The Court observed that the appeals were rejected due to the statutory limitation despite valid reasons for the delay. The Court also noted that the assessment orders were passed without giving an opportunity of hearing, violating natural justice principles. The Supreme Court judgment in Glaxo Smith Kline emphasized that the rejection of delay condonation does not merge the assessment order with the appellate order. Given these circumstances, the Court found it appropriate to remand the matter back to the Assessing Authority for reconsideration, ensuring compliance with natural justice principles and proper service of show cause notices.

Order:
The writ petitions were disposed of, setting aside the impugned assessment orders, and the matters were remanded back to the Assessing Authority for fresh consideration in accordance with law. No costs were ordered, and any pending miscellaneous petitions were closed.