2024 (11) TMI 283 - HC - VAT / Sales Tax

Challenge to reassessment order - disallowance of ITC - bone of contention in the case at hand is non production of books of accounts for the assessment period of 2010-11 - appeal is dismissed solely on the score that the appeal is preferred beyond period of limitation - HELD THAT - The original order is passed without hearing the petitioner, and is in violation of principles of natural justice. In that light, the petitioner preferring an appeal after six years cannot be pointed against him, for the reason that original order was an ex parte order. On the sole ground that the original order passed by Assistant Commissioner was without hearing the petitioner, as it was an ex parte order, it is deemed appropriate to set aside the order and remit the matter back to the hands of the Assistant Commissioner - writ petition is allowed by way of remand.

Issues:
1. Quashing of reassessment order by the first respondent for the assessment period 2010-11.
2. Quashing of appellate order by the second respondent for the same assessment period.
3. Barred by limitation appeal concerning the assessment period.
4. Violation of principles of natural justice due to an ex parte order.

Analysis:

1. The petitioner sought a writ of Certiorari to quash the reassessment order by the first respondent for the assessment period 2010-11. The bone of contention was the non-production of books of accounts. The Assistant Commissioner disallowed input credit due to the absence of the books, resulting in a tax demand. The petitioner claimed unawareness of the order until recovery proceedings were initiated. The High Court found the original order to be ex parte and lacking natural justice principles. Consequently, the Court set aside the order and remitted the matter back to the Assistant Commissioner for proper disposal within a specified timeframe.

2. The petitioner also sought to quash the appellate order by the second respondent for the same assessment period. The appeal was dismissed as barred by limitation, being filed after 6 years. The Court noted that the appeal was beyond the stipulated period for filing, both the initial 30 days and the condonable 180 days. Despite this, the High Court found that the dismissal solely on the grounds of limitation was unjust, considering the original order was ex parte. The Court allowed the writ petition, quashed both the reassessment and appellate orders, and directed the matter to be reconsidered by the Assistant Commissioner.

3. The appeal was dismissed by the second respondent due to being filed beyond the limitation period. The Court analyzed the provisions of the KVAT Act regarding the appeal timeline and found the delay in filing to be substantial. However, the Court emphasized that the dismissal based solely on limitation was unfair, given the ex parte nature of the original order. The Court allowed the writ petition, setting aside both orders and instructing the matter to be reviewed by the Assistant Commissioner.

4. The Court addressed the violation of principles of natural justice due to the ex parte order passed by the Assistant Commissioner. The petitioner's appeal after six years was considered in light of this violation, leading the Court to quash both the reassessment and appellate orders. The matter was remitted to the Assistant Commissioner for proper disposal, emphasizing adherence to natural justice principles and a fair hearing for the petitioner.

In conclusion, the High Court allowed the writ petition, quashed the reassessment and appellate orders, and directed the Assistant Commissioner to reexamine the matter, ensuring compliance with natural justice principles and a fair hearing for the petitioner.

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