2014 (9) TMI 719 - HC - VAT and Sales Tax

Restoration of the appeal - benefit under Section 4(2)(a)(v) of the Delhi Sales Tax Act, 1975 - Held that - Tribunal had initially thought it appropriate to direct the authorities to furnish a copy of the Verification Report as may be seen by its order dated 17.08.2010. However, this aspect appears to have completely escaped its attention when it proceeded to make ex-parte final order adverse to the appellant which proceeded on the assumption that the latter could not afford any explanation to the adverse report. In the first instance, such report was never made available to the appellant. In these circumstances, this Court is of the opinion that the impugned orders cannot be sustained - Matter remanded back - Decided partly in favour of assessee.

Summary

Issues:
1. Rejection of request for rehearing after restoration of appeal by the Appellate Tribunal.
2. Denial of benefit under Section 4(2)(a)(v) of the Delhi Sales Tax Act, 1975 due to unverified ST-35 Forms.
3. Failure to furnish verification report to the appellant, violating principles of natural justice.
4. Refusal to recall order and rehear appeal on merits despite compelling circumstances.
5. Ex-parte final order by the Tribunal without allowing appellant to explain adverse report.
6. Setting aside impugned orders and remitting the matter to the assessing authority for reexamination.

Analysis:
1. The appellant challenged the Appellate Tribunal's order rejecting their request for rehearing after restoration of the appeal. The Tribunal had also dismissed the original appeal due to the denial of benefit under Section 4(2)(a)(v) of the Delhi Sales Tax Act, 1975, based on unverified ST-35 Forms.

2. The appellant, a registered dealer, sold compressors and claimed benefits under the Act. The Assessing Officer denied the deduction, citing unverified ST-35 Forms. The appellant's appeals were unsuccessful until reaching the VAT Appellate Tribunal, which acknowledged the lack of furnishing the verification report to the appellant, violating principles of natural justice.

3. The Tribunal's order was influenced by a report not provided to the appellant, leading to an adverse final order without allowing the appellant to explain or defend against it. Despite the appellant's absence at the hearing due to compelling circumstances, the Tribunal refused to recall the order for a rehearing on merits.

4. The Court found the Tribunal's actions unjust, setting aside the impugned orders and remitting the matter to the assessing authority for reexamination. The remand is limited to verifying the ST-35 Forms claimed by the appellant, emphasizing the importance of providing the appellant with a copy of the report considered during the assessment.

This detailed analysis covers the issues raised in the judgment, highlighting the procedural irregularities and violations of natural justice that led to the Court's decision to remit the matter for reexamination.