2023 (11) TMI 1159 - HC - VAT and Sales Tax

Violation of principles of natural justice - no notice was issued to the petitioner and no opportunity of personal hearing was afforded before passing impugned orders - Attachment of petitioner s bank account - HELD THAT - Had it been the real intention of the respondent-Department to provide an fair opportunity of personal hearing to the petitioner, then, the respondent- Department would obviously, granted sufficient time to the petitioner to hear them in person and waited for the petitioner's reply/objections. Whereas, the respondent-Department proceeded to confirm the proposals contained in the show cause notice, without waiting for reply to be filed by the petitioner. Even the show cause notice, dated 04.03.2023 was not served upon the petitioner directly by means of post or any other communication, whereas, the same was uploaded in the online Portal. All these would go to show that the opportunities, alleged to have been granted to the petitioner are not the real ones, but were the opportunities provided at nominal level and the same cannot be construed as fair opportunities - as rightly pointed out by the learned counsel for the petitioner, the impugned order is in gross violation of principles of natural justice and liable to be set aside. The matter is remanded to the first respondent/State Tax Officer for re-consideration - petition allowed by way of remand.

Summary

Issues involved:
The main issue in this case is the violation of principles of natural justice in the order passed by the State Tax Officer, leading to the attachment of the petitioner's bank account.

Violation of Principles of Natural Justice:
The petitioner, engaged in providing health insurance, challenged the order directing payment of tax and penalty, citing lack of notice and personal hearing. The petitioner argued that the show cause notice was not directly served and only uploaded online, depriving them of a fair opportunity for defense. The petitioner contended that the order violated principles of natural justice.

Contentions of the Respondent-Department:
The Government Advocate for the respondent-Department argued that a show cause notice was issued and uploaded online after being returned with an endorsement of 'Left'. As the petitioner did not respond, the State Tax Officer confirmed the proposals in the notice. The Government Advocate maintained that the order was legally sound.

Failure to Provide Personal Hearing:
The petitioner's counsel refuted the respondent's claim of the notice being returned, emphasizing that even if not accepted, the petitioner should have been granted a personal hearing before the final assessment order. It was highlighted that the respondent fixed a date for hearing before the deadline for reply, denying the petitioner a fair chance to present their case.

Admission of Lack of Personal Hearing:
During arguments, the Government Advocate admitted that no personal hearing was provided to the petitioner after 30 days. The Government Advocate requested appropriate orders, suggesting the petitioner be directed to appear before the respondent-Department if the matter is remanded for fresh consideration.

Judgment and Remand:
The High Court found the impugned order to be in violation of natural justice principles and set it aside. The matter was remanded to the State Tax Officer for reconsideration. The State Tax Officer was directed to provide a fair opportunity for a personal hearing, consider the petitioner's documents, and pass a reasoned order. The consequential order attaching the petitioner's bank account was also set aside. The petitioner was instructed to appear for the hearing, and the bank account attachment order was lifted. No costs were awarded, and the connected Writ Miscellaneous Petition was closed.