2016 (4) TMI 224 - HC - VAT and Sales Tax

Validity of impugned order - Violation of principles of natural justice - No pre-assessment notice was issued - Held that - there was no reference about the issuance of notice and service of the same on the petitioner in the impugned order dated 19.08.2015, which would clearly demonstrate that no pre-assessment notice was served on the petitioner before passing the assessment order for the year in question. Therefore, in my considered view, the impugned order is in violation of the principles of natural justice. Therefore, the impugned order is liable to be set aside. - Petition disposed of

Summary

Issues:
Challenging assessment order dated 19.08.2015 for the year 2014-15 and demanding no VAT amount from the petitioner.

Analysis:

1. Lack of Pre-Assessment Notice:
The petitioner challenged the assessment order for the year 2014-15, contending that no pre-assessment notice was served before passing the order. The respondents claimed a notice was issued, but the impugned order did not reference the notice or its service to the petitioner. The court found that the absence of evidence regarding the notice in the order indicated a lack of service, violating principles of natural justice. Consequently, the court set aside the impugned order.

2. Violation of Natural Justice:
The petitioner argued that the assessment order was arbitrary, illegal, and against natural justice due to the absence of a pre-assessment notice. The court agreed, emphasizing that the failure to serve a notice before passing the order was a clear violation of natural justice principles. As a result, the court deemed the imposition of penalty at 150% unwarranted and ordered the matter to be remitted back for a fresh assessment order.

3. Remittal for Fresh Assessment:
In light of the lack of a pre-assessment notice and the violation of natural justice, the court set aside the impugned order dated 19.08.2015. The matter was remitted back to the authority concerned for a fresh assessment order. The Assessing Officer was directed to issue a pre-assessment notice within two weeks and the petitioner was instructed to file objections within two weeks thereafter. The assessing officer was further directed to consider the objections, conduct a fresh assessment, and provide a personal hearing to the petitioner, ensuring compliance with the law within six weeks.

4. Disposition of the Writ Petition:
The court disposed of the writ petition, ruling in favor of the petitioner due to the lack of a pre-assessment notice and the consequent violation of natural justice. No costs were awarded, and connected Miscellaneous Petitions were closed as a result of the judgment.