2015 (9) TMI 468 - HC - VAT and Sales Tax

Violation of principles of natural justice Claim of Input Credit Tax Respondent issued notice alleging that petitioner effected purchases from dealers, whose registration was cancelled and claimed input tax credit and hence, he was liable to pay amount availed by him Thereafter respondent passed impugned order, without affording opportunity of personal hearing to petitioner Held that, respondent did not indicate as to proposed addition to be made in assessment, which, as per provisions of Act, was bad In such circumstances, impugned order passed by respondent was liable to be interfered with, on that sole ground alone Petitioner could not avail benefit of filing statutory appeal in time, on medical grounds and as of now, limitation period was also lapsed Respondent failed to afford opportunity of personal hearing to petitioner before passing impugned order, which, was in violation of principles of natural justice Therefore, petitioner could be given one more opportunity to meet ends of justice Impugned order passed by respondent quashed Petitioner directed to submit all necessary documentary evidence in support of his claim before respondent and respondent to consider claim of petitioner in accordance with law Decided in favour of Assesse.

Issues involved:
1. Allegation of claiming input tax credit from dealers with canceled registration.
2. Failure to provide an opportunity of personal hearing before passing the assessment order.
3. Inability to file statutory appeal within the limitation period due to illness.
4. Lack of indication regarding proposed additions in the assessment order.
5. Violation of principles of natural justice.

Analysis:

Issue 1: Allegation of claiming input tax credit from dealers with canceled registration
The petitioner, a dealer in general goods, was alleged to have claimed input tax credit amounting to Rs. 30,114 from dealers whose registration was canceled. The respondent issued a notice and subsequently passed an order determining the petitioner's taxable turnover and levying a tax. The petitioner denied the allegations and contended that no opportunity for a personal hearing was provided before the order was passed.

Issue 2: Failure to provide an opportunity of personal hearing
The petitioner argued that the respondent did not consider the explanation offered before passing the order and failed to provide an opportunity for a personal hearing. Due to illness, the petitioner could not file a statutory appeal within the limitation period, leading to the current writ petition seeking relief.

Issue 3: Inability to file statutory appeal within the limitation period
The petitioner's inability to file a statutory appeal within the limitation period due to medical reasons was highlighted. This resulted in the petitioner approaching the court for redressal, emphasizing the importance of natural justice principles being upheld during the assessment process.

Issue 4: Lack of indication regarding proposed additions in the assessment order
The court noted that the show cause notice did not specify the proposed additions to be made in the assessment order, which was deemed as a violation of the provisions of the Act. This lack of clarity regarding the additions led to the court interfering with the impugned order.

Issue 5: Violation of principles of natural justice
The court found that the respondent's failure to afford the petitioner an opportunity of personal hearing and the subsequent inability to file a statutory appeal within the limitation period constituted a violation of principles of natural justice. As a result, the court allowed the writ petition, quashed the impugned order, and remitted the matter back to the respondent for fresh consideration with specific directions to ensure due process and opportunity for the petitioner to present their case.

In conclusion, the court granted relief to the petitioner, emphasizing the importance of adhering to procedural fairness and providing opportunities for parties to be heard before passing assessment orders.

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