2013 (4) TMI 431 - HC - VAT and Sales Tax

Assessment of Entry tax on the Kerosene Oil - U.P. Trade Tax Act 1948 - petitioner submitted that the respondent no.1 accepted the contention of the petitioner on first count - Held that - While passing the order dated 6th August 2009 the respondent no.1 was satisfied with the reply submitted by the petitioner and refused to grant permission to reopen the matter under Section 21(2) of the Act even though vide order dated 16th April 2010 ex parte he has granted permission to reopen the matter under Section 21(2) of the Act without affording any reasonable opportunity to the petitioner to file its reply. Since the impugned order dated 16th April 2010 has been passed without affording opportunity to the petitioner to submit its reply it is against the principles of natural justice thus the impugned order cannot be sustained. The respondent no.1 is directed to afford opportunity to the petitioner to submit its reply and then pass an appropriate order in accordance with law

Summary

Issues involved:
Challenge to order granting permission for assessment of entry tax on Kerosene Oil under Section 21(2) of the U.P. Trade Tax Act, 1948 based on refusal to grant permission, lack of opportunity to file a reply, violation of principles of natural justice.

Detailed Analysis:
The petitioner, a registered partnership firm engaged in distributing Kerosene Oil, challenged an order granting permission for entry tax assessment on the oil. The Assessing Officer initially held the petitioner not liable for entry tax for the Assessment Year 2004-05. However, a notice under Section 21(2) of the Act was later issued, leading to a series of events where the petitioner submitted documents supporting its position. Despite this, the respondent initially refused permission under Section 21(2) but later amended the order without affording the petitioner an opportunity to respond, which was deemed a violation of natural justice.

The High Court considered the arguments presented by both parties. The petitioner's counsel highlighted the respondent's acceptance of the petitioner's contentions initially and subsequent unilateral decision to grant permission to reopen the matter under Section 21(2) without considering the documents previously filed. On the other hand, the respondent's counsel argued that the matter could be reviewed by another authority under the Act, suggesting no interference was necessary with the impugned order dated 16th April, 2010.

After careful consideration, the Court found that the impugned order was passed without giving the petitioner a fair opportunity to respond, contravening the principles of natural justice. The Court noted that the respondent had previously refused to grant permission to reopen the matter under Section 21(2) and then abruptly amended the order without hearing the petitioner. Consequently, the Court directed the respondent to provide the petitioner with a chance to submit its reply and then make a decision in line with the law.

In conclusion, the writ petition was successful, and the Court allowed it, emphasizing the importance of adhering to procedural fairness and providing parties with a reasonable opportunity to present their case before making decisions impacting their rights.